IRDAI Proposes Strict Commission Caps and Expense Limits for Insurers
· Business · India Today, Moneycontrol
The Insurance Regulatory and Development Authority of India has proposed tighter limits on commissions paid to insurance agents and brokers. Under the consultation paper titled 'Recalibrating Economics of Insurance Distribution', IRDAI aims to cap Expenses of Management for life insurers at 15 percent within two years and 12.5 percent within five years. General insurers face a proposed expense limit moving towards 20 percent over five years alongside product-wise commission caps. The regulatory push follows the removal of product-level commission caps in 2023, which sparked industry concerns over distributor compensation and consumer mis-selling. Consumer advocates support the measures to increase accountability, while brokers argue the rules will harm advisory businesses.
Why it matters
The proposed regulatory reset directly affects insurance distributors, company profit margins, and policyholder costs across the Indian financial sector.
Read the original report — India Today
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