Type answer only The Swarup Committee recommends that insurance agents oradvisors be disallowed from loading commission on to thepolicyholder's premium. The agent's advice is biased in favourof the insurance company rather than the buyer to earn thecommissions. India's life insurance industry collected annualpremiums of over Rs. 2 trillion through sale of new policies andrenewal. The first year commissions are up to 40 per cent of thepremium amount. The second year and third year premium are7.5 and 5 per cent respectively. The Swarup Panel'srecommendation are designed to combat rampant mis-selling offinancial products in India. Mis-selling by India's 3 millionfinancial advisors can harm the interests of about 188 millioninvestors. A large number of policies lapse which is a majorbane. One main reason for 'lapsation' is the selling of anunsuitable policy.IssuesHow insurance selling is different? What is mis-selling? Howthe agents should be compensated?

Insurance - Insurance is a legal agreement, evidenced by a policy, under which a policyholder…

Answered: The Swarup Committee recommends that…

Business/Professional Ethics Directors/Executives/Acct

8th Edition

ISBN:9781337485913

Author:BROOKS

Publisher:BROOKS

Chapter8: Subprime Lending Fiasco-ethics Issues

Section: Chapter Questions

Problem 8.1EC

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