IRDA has already sought a consensus from all private and public insurance companies.

When a private entity directly gets itself insured, the company becomes eligible for a special discount of up to 5 per cent or in some cases even 10 per cent in lieu of agency or brokerage.

When an entity engages an agent, the agency commission sometimes is greater than the special discount which a company may get if it is directly insured by the insurer. Agents and brokers do rebating by way of parting a portion of their commissions to their clients in order to get quick business.

An IRDA official was quoted as saying in an East India morning daily: “We have decided to start an ad campaign but its medium and structure will be finalised during our next board meeting to be held in the first week of June. The regulator wants to make it explicitly clear to everyone that any sort of rebating is illegal.”

The report also states that most life and non-life insurance companies support banning of rebating but admit that monitoring this is almost impossible.