The uproar about the incentives to Agents continues. IRDA has told insurers to disclose explicitly the commission in the `benefit illustration’, a document that contains the benefits due to a policyholder upon maturity of an insurance policy.
A signed copy of the illustration along with the proposal form is mandatory for issuing a policy. In a circular to all life companies, the Insurance Regulatory and Development Authority (IRDA) said companies will have to disclose the commission paid to agents with effect from July 1, 2010.
In reality, the Agents do part with their commissions and is known as “rebate” to their customers. Though they may not be sharing the exact commission details.
Further, it is not clear whether only the first year commissions have to be disclosed or the renewal commission to be paid in the subsequent years also have to be disclosed.
As I have argued in another post on the incentive structure for Agents, it is more important to enhance the knowledge, skill of our Financial Advisors rather than crib about the commissions. My expectation from a Financial Advisor would be to give me a satisfactory customer experience rather than part with his commissions.
But one of my friends exclaimed, “provide a satisfactory customer experience ? Man! your expectations are too high!”
Do you agree with my friend or with me?
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