Insurance stocks came under heavy selling pressure on September 24, 2026, after the Insurance Regulatory and Development Authority of India (IRDAI) proposed changes covering insurance distribution, commissions, expenses, customer-facing practices and mis-selling safeguards. PB Fintech fell 26.01% to ₹1,395.70, while Max Financial Services declined 11.25%, HDFC Life fell 5.17%, ICICI Prudential Life dropped 3.34% and Niva Bupa Health Insurance declined 2.88% during the session. The market reaction followed IRDAI’s consultation paper, Recalibrating Economics of Insurance Distribution.
One of the key proposals concerns “dark patterns” on insurance websites. IRDAI has proposed that customers should be able to access product features, pricing and quality-related information without first providing personal details. The proposed framework also seeks to reorganise insurance distribution into Insurance Distribution Entities, Insurance Distribution Persons and Market Infrastructure Institutions, while introducing more segment-specific commission structures based on business segment, line of business, distribution channel, product complexity and servicing effort.
The consultation also proposes changes to Expenses of Management (EoM). For general insurers, the EoM limit would gradually move from 30% of Gross Written Premium to 20% of Domestic Gross Direct Premium Income over five years. For life insurers, the proposed company-level limit would be 15% within two years and 12.5% within five years. IRDAI has also proposed stronger suitability requirements, audit trails for specified life insurance sales and restrictions on certain compulsory bundling practices. These remain proposals, with comments invited until October 25, 2026, so the final impact on insurers and distributors will depend on the framework ultimately adopted.
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