New Commission and Incentive Structure for Insurance Agents Approved

Kathmandu – The Nepal government has officially published the new insurance regulations in the gazette, finalizing the long-debated provisions on commission and incentives for insurance agents. The policy, approved by the Cabinet after extensive discussions with the Insurance Authority, faced resistance from agents, who had even threatened protests over the proposed changes.

Under the new regulations, insurance agents in life insurance will receive commissions and incentives as per Schedule 9, while non-life insurance agents will receive 5% of the insurance fee. In micro-insurance and health insurance, the incentive structure will be determined by the Insurance Authority.

Additionally, life insurance agents will receive incentives from the first insurance fee, within the limits set by the authority. However, institutional insurance agents and government-mandated insurance policies will not qualify for incentives. Payments will be adjusted based on the renewal ratio, as outlined in Schedule 10 of the regulations.

A significant change includes a mandatory 50% commission discount for policyholders who directly purchase insurance without an agent. The regulation also allows life insurers to offer loyalty incentives for agents providing continuous service.

In a notable provision, insurance agents will receive their earned commissions and incentives even if their licenses become invalid. Furthermore, in the event of an agent’s death, the earned commission must be provided to the surviving spouse, children, or parents.