Kathmandu. It has come to light that the Nepal Insurance Authority (NEA) had directed two years ago to arrange the agent’s commission facility in the life insurance business so that there would be no duplication in a single family.
In a directive letter issued by the Nepal Insurance Corporation (LIC) on August 9, 2080, the Insurance Corporation (LIC) had issued a directive to scrap the provision related to providing double commission facility to the insurer and make arrangements so that the agent does not get double commission facility. According to the Insurance Authority, the clarification was made after Life Insurance Corporation (Nepal) sought regulatory opinion regarding the commission facility of members of a single family.
Professional Agent Network in Life Insurance Company or Family & Company?
Although such a directive has been clearly issued by the authority, most life insurers are still providing three levels of agent network to the members of a single household.
“As per the code of conduct of agents issued by the Authority for agent management and the prevalent national and international practice regarding the use of agents in life insurance business, the commission facility of the agent should not be made in the families of the same household. g. ’
In addition to the commission received through direct business, the authority will provide additional amount and facilities equivalent to 18 percent of the first insurance premium. The purpose of such a system is to promote professional agents, but not to provide an unfair source of income for a particular family.
There have been complaints that some agents have been exerting undue pressure on their subordinate agents, branch managers and even the top management to include the 18 percent incentive facility to the family members.
Rajendra Amatya, president of the National Insurance Agents Association of Nepal, said that it is not logical to say that a family member should be in the profession of doctors, civil servants, engineers, etc. “It is the responsibility of the concerned insurer and the Nepal Insurance Authority to monitor and take action if anyone misuses their services,” he said. ’
