The Insurance Regulatory and Development Authority of India (IRDAI) has ruled out a gradual glide path for proposed insurance commission caps, signalling a possible immediate reset of distributor remuneration. In an interview, IRDAI Chairman Ajay Seth said the regulator wants insurance to become a product that customers buy rather than one that is primarily push-sold.
Seth said the proposed commission framework is based on Indian market evidence, product complexity, distribution channel and the effort involved. While overall expenses of management would follow a five-year glide path, commission caps would be addressed more directly because of concerns around mis-selling.
IRDAI is also open to a more blended remuneration structure in which base commissions could be supplemented by incentives linked to persistency, servicing, suitability and the absence of mis-selling. The Public Insurance Registry (PIR) is expected to provide the data required to make such outcome-linked remuneration more credible.
Seth also emphasised that lower distribution costs should ultimately benefit policyholders through affordability, better service and improved value. The regulator expects digital infrastructure, Bima Sugam and simpler products to reduce information asymmetry and improve insurance accessibility.
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