The Insurance Regulatory and Development Authority of India (IRDAI) is planning a major overhaul of insurance commission rules to curb mis-selling practices and enhance transparency in the sector. The reforms aim to align incentives for agents and intermediaries with policyholder interests rather than purely sales-driven targets.
Under the proposed changes, the regulator seeks to standardize commission structures, limit upfront incentives, and encourage long-term customer engagement, reducing the instances of misleading policy advice. Insurers will also be required to implement stricter monitoring mechanisms to ensure compliance with the new guidelines.
Industry experts note that the move could strengthen consumer trust, improve governance, and reduce the financial burden caused by mis-sold insurance products, while fostering responsible sales practices across the life and non-life insurance sectors.
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