Kathmandu. The Nepal Insurance Authority (NIA) has remained silent even though it has been found that the life insurer has provided incentives against the provisions of the Insurance Regulations for life insurance agents.
Rule 44 of the Insurance Regulations provides for the remuneration to be received by the insurance agent. This section provides for the commission, incentives to be received by the agent and additional incentives for the agent who has contributed to the insurer for a long time. Sub-rule (2) states that an insurer may provide an incentive in the first insurance premium not more than that determined by the insurance authority.
Although Sub-rule (2) of Rule 44 states that each insurance company can provide incentives not more than that determined by the Insurance Authority, life insurers are providing the incentive amount on the basis of the total first insurance premium income instead of the per agent.
The Insurance Authority of Nepal (NIA) is the authority to implement the Insurance Act, Regulations, Directives and Rules. More than a year has passed since the Insurance Regulations 2081 came into force, but the Authority has remained silent even after the insurer defied the provisions of the regulations.
On April 26, 2020, Nepal Insurance Authority (NIA) had issued a directive to pay management expenses (including agent training, training, incentives) within the 18% ceiling of the first premium. Prior to this, the life insurer had to take prior approval from the authority every time to implement the monthly incentive plan.
Citizen Life Insurance Company CEO and former president of Life Insurance Association, Poshan Raj Poudel, said that all companies should distribute agent incentives as per the criteria set by the Insurance Authority. “All the acts, rules, regulations and directives should be followed, there is no doubt about it,” he said, adding, “If there is any irregularity, the regulator should control it.” ’
Spokesperson and Director of the Insurance Authority, Pujan Dhungel Adhikari, said that the authority has received some information regarding the issue of agent incentive distribution against the regularity. “The concerned division of the authority is carrying out study and investigation on this matter”, she said, adding, “The authority will take action against the insurers if the incentive is distributed against the insurance regulations.” ’
