Life insurers firms plan to approach regulator for relief after ITC removal

To seek passing of some burden to distributors in form of reduced commissions

- SUBRATA PANDA & AATHIRA VARIER

Life insurance companies are planning to approach the insurance regulator to seek approval for passing on a portion of the financial impact of the removal of input tax credit (ITC) to distributors in the form of reduced commissions, according to multiple sources familiar with the development.

This follows the introduction of a nil goods and services tax (GST) on individual life and health insurance premiums.

The companies, through the Life Insurance Council —an industry body representing the firms— will send a letter to the Insurance Regulatory and Development Authority of India (Irdai) this week, highlighting their concerns and suggesting that the partial impact of the removal of ITC be passed on to the distributors, sources said.

This comes after the industry passed on the entire benefit of lower GST rates to policyholders to increase affordability.