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The Insurance Regulatory and Development Authority (Irda) on Wednesday said all life insurers were required to have their own company-specific persistency criterion for renewal of individual and corporate agencies from July 1. At present, agents were required to have an 50 per cent average persistency rate in number of policies.
Persistency refers to the ability to keep renewing a customer's insurance policy, till it reaches maturity.
The higher the persistency rate, the higher are renewal premiums for the company.
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The regulator said renewal of individual agency license and corporate agency license will not be subject to meeting the persistency rates earlier stated by Irda.
It had said that from the financial year 2014-15, the persistency rate for each agent shall be at least 75 per cent in terms of both policies and premium procured by such agent.
Further, this stipulated persistency rate requirements was to be effective for all corporate agency renewals due from July 1, 2014.
With today's circular, each insurer can bring out their specific criterion for licenses of individual agents and corporate agents to be renewed. These guidelines are with immediate effect.
