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Govt won't stop insurance agents' commission

Last updated on: November 24, 2009 15:41 IST

InsuranceThe government is not considering doing away with the commission for insurance agents, the Rajya Sabha was informed on Tuesday.

Minister of state for finance Namo Narain Meena said 'No' in a written reply to the Rajya Sabha when asked whether the government is considering any proposal to discontinue insurance agents' commission.

A government-appointed committee headed by D Swarup had proposed phased elimination of upfront commission paid to insurance agents by April 2011 in its discussion paper.

However, the committee has not yet submitted its report to the government. The country's largest insurer, Life Insurance Corporation, had paid Rs 10,029.72 crore (Rs 100.29 billion) commission to agents in the last fiscal compared to Rs 9,552.68 crore (Rs 95.52 billion) in 2007-08.

In the financial year 2006-07, the agents' commission amounted to Rs 9,153.13 crore (Rs 91.53 billion) by LIC.

On the other hand, private insurers paid Rs 2,649.85 crore (Rs 26.49 billion) commission to agents in the last fiscal compared to Rs 2,725.80 crore (Rs 27.25 billion) in 2007-08.

In 2006-07, the commission paid to agents stood at Rs 1,848.26 crore (Rs 18.48 billion).
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