"Collection of advance premium shall be allowed within the same financial year for the premium due in that financial year," Irda said in a circular addressed to the CEOs of life insurance companies.
However, if the advance premium is collected for the next financial year, then insurers can collect the same "for a maximum period of three months in advance of the due date of the premium", the regulator noted in the circular.
The premiums collected in advance can only be adjusted on the due date of the premium. Further, the commission shall only be paid after adjustment of premium on due date.
Earlier, Irda had said that the premium due might be accepted 30 days before the due date. The regulator had also said that in the monthly premium payment mode, insurers could accept three months' premiums in advance only on the date of commencement of the policy.
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