Life insurance agents may lose their licences if the annual persistency ratio of their clients’ policies is less than 50 per cent. In an exposure draft on persistency in life insurance policies announced on Saturday, the Insurance Regulatory and Development Authority proposed norms for enhancing the performance of agents.


It has proposed a minimum of 20 policies per agent a year and the first year premium income to be procured by an agent at Rs 1.5 lakh per annum. If these two conditions were not met, the agent would have to achieve proportionately more in either one to make up for the shortfall in the other. Spouses and close relatives of employees of insurers should not be engaged as agents.


Further, there should be a disincentive for lapse in the form of commission clawback by the insurer, on a proportionate basis, the draft said. “These proposals would be a step forward in protecting the interests of policyholders, who stand to gain if persistency is high, both in terms of protection of life and profitability of the life insurance business,” Mr A. Giridhar, Executive Director, IRDA, said. Feedback on the proposals could be sent to the Authority on or before, July 31. Persistency is the percentage of business retained without policy lapse or surrender.

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  1. rahul says:

    hi , can you tell me, how many years one ad visor work to get his or her commission regularly, or how many numbers of policy he or she must give for regular commission pls give answer as my sales manager giving pressure and threating me that your commissiom will stop. as i give 60 policy and already


    It means IRDA now wish to retain only those persons in the insurance business who are full time engaged in the Insurance Sector.

    It would lead to great relief for insured persons because many times agents don’t come back to serve when the commission on renewal premium is too low to cover the expenses incurred thereon specially in small policies.

    For example; in case of HDFC Life Insurance; the agent gets only 1% of renewal premium in ULIP products.

    If services are provided in a best manner then one should not worry about the proposals.

    It is really towards betterment !

  3. deepak says:

    Doing 20 policies in a year is a tough job for an agent who is employed part time. It is only possible where rationalisation is there in employing agents by insurer, becuase business generation is very tough in stiff competion.

  4. ramavatar says:

    the condition of persistency should be removed. In its place, the condition of either 20 policies per agent per annum or 1.5 lac premium per annum is very precise.

  5. Prakash P. Mulchandani says:

    IRDA should also make rules for Insurance companies and shall make norms for companies for appointing agents i.e. in terms of No. of agents in particular area or No. of agents per population.
    To protect the agents from unemployment.Because in this competative market , it is very
    difficult to get business.
    So I feel these numbers are more
    for agents , who are appointed by
    companies by motivating agents ,
    that agent can do 2Hrs. job in aday and earn good amount of commission.
    There should be diffrent for Part
    time agent and full time agent.

  6. anjaneyulu juturi says:

    irda implement the minimum policies&premium is very high for rural areas.kindly review the above implementation seriously,otherwise many agent familes loss the employment. thanQ

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December 2023