Andhra bank, which collaborated with Bank of Baroda and Legal & General for an insurance venture, India First Life insurance, has approached the regulator, Insurance Regulatory and Development Authority (IRDA) to protect the trail commission that it earns from its tie-up with Life Corporation of India (LIC).

According to the norms, trail commission is only paid after completion of five years of the distribution alliance. Though the insurance act necessitates the completion of at least three years of the alliance the authority has increased it to five years. The bank has had a tie-up with LIC for the last four years and may lose the commission on these grounds.

As an agent, Andhra bank is eligible for commissions throughout the term of the policies. Certain policies pay as high as 40 percent of the premium amount in the first year.

Bank of Baroda holds a 44 percent stake in the insurance venture, Andhra bank holds 30 percent while the remaining 26 percent stake is with Legal and General.

IndiaFirst life Insurance has a paid-up capital of Rs.330 crore and it is planning to initially sell products through 4500 branches of Bank of Baroda and Andhra bank. The promoters plan to increase the capital base to Rs. 2,500 crore by 2015.