2. Transfer and assignment of policies

One of the proposals in the Bill is that the policyholder can transfer or assign his life insurance policy, either wholly or partly, to a third party. Then it has to be signed by the person transferring the policy and attested by his agent; the terms and conditions of the transfer have to be clearly stated.

However, in the new Insurance Act the insurance company has the right to accept or decline such a transfer if it is convinced that this is not in the interest of the policyholder or in the public interest. The reason for rejection has to be conveyed to the policyholder within a month. The person to whom the policy is being transferred to will have all rights over the policy once transferred and can obtain a loan under the policy or surrender the policy.

3. Additional remuneration and agents’ commissions to be capped

In order to prevent mis-selling of policies, the Bill proposes that insurance companies not pay any agent commission in excess of what is prescribed in the regulation. Currently there are cases where companies reward agents through gifts such as cars or foreign trips.

In the absence of such incentives, there are less chances that agents would try and push policies that are not suited for customers. Apart from this, the proposed cap on agents' commission structure is also likely to help prevent mis-selling.