Overview
- The Insurance Regulatory and Development Authority of India published a consultation paper in late September proposing that commissions be set by product complexity and the effort needed to sell policies and asked for feedback by October 25.
- On Tuesday, broker groups led by the Insurance Brokers Association of India sent letters to the finance minister and prime minister and publicly warned the plan could cut intermediary revenues by as much as 60–70% and put about 1 million jobs at risk over several years.
- IBAI has asked IRDAI to publish a formal impact assessment, to delay any hard caps and to keep the current commission rules until their scheduled 2028 review, and it has sought meetings with the regulator and top government officials.
- IRDAI chief Ajay Seth has defended the proposals, saying rapidly rising commissions and hidden payments have pushed costs up for policyholders and need to be reined in.
- Brokers warn the rules could push insurers to shift payments into opaque channels such as ‘marketing fees’, and stakeholders say the changes could affect market conduct, rural distribution and investor certainty after recent moves to allow fuller foreign investment.