IB Chairman Fatta Bahadur KC said they had repeated the instruction to insurers after getting the court’s clearance. The IB had asked insurers to cap their agents’ commission at 5 percent for the first time on January 6, 2014.

Before the IB imposed the ceiling, non-life insurers used to pay a commission of up to 15 percent of the premium collected from clients.

According to KC, the limit on agent commission on farm insurance had been fixed at a higher level at 15 percent to encourage agents to play a more active role in increasing farm insurance coverage.

Stating that excess expenses of insurers could threaten the financial health of the insurance companies besides affecting the interest of the beneficiaries, the IB had capped their expenses besides imposing a restriction on agent commission. KC said that they had limited agent commission on life insurance policies at 8-22 percent of the premium. “The commission in the life insurance segment depends on the life fund that the companies could form by selling insurance policies,” he added.  There are about 90,000 licensed insurance agents working in the Nepali insurance market for 26 insurance companies of which 17 are

the non-life insurers. Similarly, 26 financial institutions and cooperatives have been licensed to work as insurance agents.