The panel constituted last year, chaired by D Swarup, the Chairman of the Pension Fund Regulatory and Development Authority (PFRDA) presented its report to the Government. The panel was asked among other things:
- How to stop mis-selling of financial products
- How to raise financial literacy among citizens
With respect to the insurance industry, the panel has recommended in its report, that the up-front commissions embedded in the premium should be done away in a phased manner as under:
| Year | Commissions |
| 2009 | 15% |
| 2010 | 7% |
| 2011 | 0% |
The main intention of the panel is to stop mis-selling of products as agents and financial advisors often push financial products where they can earn more, without the investors in mind.
The move has been opposed by the Insurance Regulatory & Development Authority (IRDA) and Life Insurance Council, the industry lobby for the insurance sector.
We believe that if the recommendations to do away with insurance commissions go through government approvals, it will be in the interest of the investors.
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