Management expense caps announced for general insurers
Expenses of management
would include all those in the nature of operating expenses — commission,
brokerage, remuneration to agents and to intermediaries, charged to the revenue
account.
No general insurance
or health insurance business can exceed the amount stipulated. In motor
insurance, the allowable expense is 37.5 per cent of gross premium for the
first Rs 500 crore. It is 32.5 per cent for the next Rs 250 crore and 30 per
cent for the balance. There would be penalties if the expense limits are
exceeded.
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