To spur ‘persistency’ in life insurance, the term for renewals of policies, the Insurance Regulatory & Development Authority (Irda) today put in place minimum standards of performance for agents, effective from July 1.
The regulator said for the next three financial years, persistency for agents should be at least 50 per cent in terms of both policies and premium procured. Meaning, at least half of the policies in an agent’s name which are due for renewal must be renewed. Thereafter, it should increase to 75 per cent from 2014-15.
Renewal of an agent’s licence, Irda said, would be subject to meeting the persistency rate targets. More, agents are to maintain a complete record of the various policies sold and their persistency on a yearly basis.
Irda asked insurance companies to lay down minimum business requirements for agents and monitor performance. It asked companies to not engage relatives of employees as agents. All life insurance companies are to frame guidelines on deferment of commission payments to agents.