Currently, there are sectional and sub-sectional management limits for insurers.
Draft IRDAI (Transaction Management Expenses of Insurers) General or Health Insurance Business) Regulations, 2022, it is proposed to include a single cap on ‘expenses of management’ and additional allowances for rural areas and government welfare schemes; Also for the expenses of ‘InsureTech’ and ‘Insurance Awareness’.
It also proposed that there should be no variable pay for managing directors, chief executive officers, whole-time directors and key management persons for a financial year in which the actual expenditure is more than 10% of the estimated expenditure. In another exposure draft on management expenses in case of life insurers, IRDAI has suggested introduction of an objective clause FLEXIBILITY Insurers to manage their expenses within overall limits based on their gross written premiums.