Insurance Policy New Rules 1st April i.e. from tomorrow many rules related to insurance policies are going to be changed. Due to this, the general public can see the effect regarding investment. So let’s know the changes related to it.
Insurance Policy New Rules: April 1 means that with the start of the new financial year, many rules related to the insurance sector are also going to change. In this, many other changes are going to happen, from removing the benefit of tax deductions from certain types of insurance. So, today we are going to tell you what is going to change in the insurance sector in the coming financial year and how it will affect the general public.
Premium up to 5 lakhs will be taxed
From April 1, 2023, life insurance income with an annual premium of more than Rs 5 lakh will now have to be taxed, which was earlier in the tax-free segment. This is not good news for investors who depended on premium income beyond this limit. However, Unit Linked Insurance Plans have been kept away from the new income tax rules and will continue to enjoy tax benefits.
Changes to expenses and commission limits
The insurance regulator has revised the Expenses on Management (EOM) and commission limits for the industry, which will be implemented from April 1. The Insurance Regulatory and Development Authority of India (IRDAI) has removed the cap on commission payment to agents, aggregators and brokers.
As per the new rules, the management expenses of the insurers have now been replaced with an overall cap on the commission paid. Earlier in 2022, IRDAI had proposed a 20 per cent cap on agents’ commission in the ‘Exposure Draft’
It is said that this will help in long-term growth and help in achieving the industry high combined ratio of 118.5 per cent. Also, the amended rules are expected to benefit insurtech expenses, insurance awareness, and rural and social schemes of the government.
