The committee has suggested that the existing rate of 5 per cent for fire marine (cargo), engineering, and other miscellaneous businesses should be increased to 10 per cent. The committee favours a status quo rate of 5 per cent for businesses like motor and marine (hull).The committee feels the present commission structure is not attractive enough for the agents. The committee also proposes to introduce incentive schemes to encourage the agency force to augment a personal line of business, which needs larger manpower. At present, there is no incentive bonus scheme for agents which can motivate the force to establish its identity and loyalty with the general insurance companies. The committee also wants the paid-up capital limit of the client company to be raised to Rs 1 crore from 10 lakh.

Atpresent, the agency commission is payable to clients whose paid-up capital is Rs 10 lakh or less. In the case of a cooperative society, however, the agency commission will be be payable where the paid-up capital does not exceed Rs 50 lakh.

At present, the agency commission is payable for a bank's finance business up to Rs 25,000. This limit should be raised to Rs 2.5 lakh, the committee suggests. The committee has suggested a qualification examination for all agents for their confirmation. Each company has to conduct this examination twice in a calendar year at their respective regional/divisional centres.

Those who do not pass this examination within the stipulated time will be terminated as per the new scheme. All general agents, existing and new, need to introduce a minimum premium in a calendar year to continue their agency, which is Rs 50,000 for urban areas, and Rs 25,000 for rural areas.

All general agents, existing and new, must introduce minimum 50 proposals where commission is payable to themin a calendar year.

Of the number of proposals introduced during a calendar year, motor proposals should not exceed 50 per cent. This condition will not apply to authorised automobile dealers.

For agents staying in cities with population over 5 lakh, the first year premium should be Rs 1.5 lakh, the second year premium should be Rs 2 lakh, and the third year premium must be Rs 2.5 lakh.

Institutional agents like cooperative societies, societies registered under the Society Act other than banks and financial institution should, however, secure a premium amount of Rs 1 lakh, and shall introduce at least 25 proposals during the year.