Pursuant to the Insurance Laws (Amendment) Act, 2015, Section 40A of the Insurance Act, 1938 (pertaining to commission payable by insurance companies to intermediaries) was deleted, and the manner of regulating such commissions (and levels thereof) was delegated to the Insurance Regulatory and Development Authority of India (‘IRDAI’). Accordingly, the IRDAI notified the IRDAI (Payment of Commission or Remuneration or Reward to Insurance Agents and Insurance Intermediaries) Regulations, 2016 (‘Reward Regulations’), which will come into force on April 1, 2017. Some of the salient features of the Reward Regulations are as follows:i. Every insurer is required to adopt a board approved policy for payment of commission, remuneration or reward to agents and intermediaries;ii. The maximum commission or remuneration payable for various insurance products has been prescribed;iii. Insurers appear to be restricted from paying commission or remuneration that is higher than the lowest of commission levels prescribed / approved under the following: (a) the Reward Regulations; or (b) the IRDAI (Linked Insurance Products) Regulations, 2013; or (c) the IRDAI (Non Linked Insurance Products) Regulations, 2013; or (d) the Guidelines on Product Filing Procedures for General Insurance Products, as applicable to general insurers. However, the relevant language of the Reward Regulations is not clear in this respect;iv. Reward in life insurance and general insurance has been permitted to be paid over and above commission/ remuneration based on objective criteria approved by the board. Such reward (a) for life insurance, cannot be more than 20% of the first year commission or remuneration paid and is to be calculated on an overall basis without linkage to each policy solicited; and (b) for general insurance, cannot be more than 30% of commission or remuneration paid and is to be calculated separately for health insurance and other than health insurance without linkage to each policy solicited; andv. No reward is due or payable to intermediaries whose revenue from activities other than insurance intermediation is more than 50% of their total revenue.