Irdai to weigh 650+ responses on insurance commissions

MUMBAI: The Insurance Regulatory and Development Authority of India (IRDAI) will now evaluate stakeholder responses to its proposed overhaul of insurance commissions and distribution expenses, as the window for giving feedback closed on October 31.

The regulator had extended the deadline earlier by a week after receiving more than 650 responses to its September 23 consultation paper, which proposes tighter commission limits, changes to expense-of-management rules and a new distribution architecture. The industry is now awaiting the draft guidelines followed by the final framework.

Both insurers and intermediaries are expecting the new rules to take effect from April 2027, allowing time to prepare for changes to distribution arrangements and business models. IRDAI chairman Ajay Seth had told ET in an interview that he would like the framework to be implemented from either January or April. The final date will be decided after the regulator examines the feedback.


The consultation paper seeks to curb distribution costs and improve transparency by linking remuneration to the nature of products, distribution channels and the effort involved in selling them. It also proposes reducing expense limits over a five-year period. In case of credit life, commission will fall to 2% from the current 40%.

Stakeholders have raised concerns over loss of revenue and jobs following the implementation of the proposed rules, with brokers saying their revenue could fall by 60% if those were implemented in the current form.