The High Council of Insurance, the regulatory body of Iran’s insurance industry, decided on Sunday to suspend the controversial agent commission framework.
According to a press release seen on the Central Insurance company of Iran website, members of the council agreed to the CII's request to postpone the mechanism until further studies.
The previous framework will be used for calculating agents and brokers' commissions.
Last month the CII published the new framework setting commission caps for agents and brokers selling insurance policies in the life and non-life categories. The new rule was to come into effect on Sept 22.
CII officials claimed that the new rules would help increase insurers' revenues. However, insurance companies rejected the claims saying that the framework was developed in a hurry and failed to appropriately consider the work of the agents.
"The agents do not accept the new rates. Policymakers made the decision without soliciting the views of agents. The new framework is likely to weaken the sales," the Insurance Agents Union said in a letter to the CII.
Studies by the website Risknews confirmed the agents' claims as it showed a steep decline in their earnings (almost 25%) when commissions were calculated according to the new rates.
Later, the CII boss assured agents and brokers that it will revise the newl framework in a way that would improve sales.
"As per law I cannot stop the implementation of the framework. However, I can assure you that it will either be modified or will be reversed," Gholamreza Soleimani said.
The number of insurance agents reached 77,200 by March 2020, according to the CII, registering a growth of 10.2% compared to the year before.
General insurance agents accounted for 37,950 of the total. The number of life insurance agents grew by 13.6% to 39,300. Total branches of insurance firms across the country reached 1,317 in the last calendar year, up 4.2% year-on-year. The number of brokers grew 16% to 652.
Iran Insurance Company, the only state-owned company, accounted for the highest number of agents with 12,236. Asia Insurance and Dana Insurance companies were next with 4,581 and 2,747 agents, respectively.
