IRDAI Proposal Hits Insurance Stocks; FSSAI vs Ecomm Giants
The regulator said private life insurers’ expenses rose to 20.2% of gross premium in FY26 as it seeks to curb distribution costs.
- On Wednesday, The Insurance Regulatory and Development Authority of India proposed stricter limits on insurance commissions and a phased reduction in Expenses of Management to improve policyholder value.
- The regulator argued the existing framework introduced in 2023 failed to reduce distribution costs, noting private life insurers' total expenses rose to 20.2% of gross premium in FY26.
- Distributor remuneration in the life insurance corporate agency channel grew 125% between FY23 and FY25, while new business premium rose only 28%, prompting the proposed return to hard commission caps.
- IRDAI also proposed stronger safeguards against Mis-selling, including a ban on compulsory bundling of insurance with loans and a Public Insurance Registry to track sales personnel conduct.
- The authority plans to reorganize distribution architecture into three broad categories while easing entry requirements for intermediaries to conduct non-insurance financial and non-financial activities.
18 Articles
18 Articles
IRDAI Proposes Overhaul of Insurance Distribution, Tighter Cost Limits and Safeguards Against Mis-selling
Get latest articles and stories on Business at LatestLY. The Insurance Regulatory and Development Authority of India (IRDAI) has proposed a major overhaul of the insurance distribution framework, including a simpler three-tier architecture, lower expense limits, revamped commission structures and stronger safeguards against mis-selling, as it seeks to reduce distribution costs and improve transparency for policyholders. Business News | IRDAI Pro…
Bank, financial stocks tumble as IRDAI flags high insurance payouts; Axis Bank, IDFC First Bank, Bajaj Finance tank
Bank stocks fell on 24 September due to regulatory scrutiny of bank-led insurance distribution. The IRDAI questioned the remuneration structures and their alignment with the work involved, pushing for a shift towards customer value and long-term outcomes.
IRDAI proposes reforms in insurance distribution to cut costs, protect policyholders
IRDAI has proposed a sweeping revamp of insurance distribution rules through a new consultation paper. The changes could improve transparency, curb mis-selling and widen digital access for policyholders.
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