The Insurance Regulatory and Development Authority of India (IRDAI) has proposed a five-year reduction in Expenses of Management (EoM) limits, with life insurers required to bring EoM down to 15% by FY29 and 12.5% by FY32. An IIFL Capital analysis cited by Moneycontrol shows that LIC, SBI Life Insurance and New India Assurance are already within the proposed FY29 ceilings. LIC reported an FY26 EoM ratio of 11.9%, SBI Life 10.6%, and New India Assurance 21.7%, compared with proposed limits of 15% for life insurers and 25% for general insurers by FY29.
The gap is wider for several private insurers. Among life insurers, Tata AIA recorded 26.7%, BLIC 25.9% and Max Life 25.1% in FY26, against the proposed 15% FY29 ceiling. In general insurance, Go Digit stood at 40.5%, Acko at 38.7% and Aditya Birla Health at 37.9%, compared with the proposed 25% FY29 limit. IRDAI is also proposing product- and channel-specific commission caps, restrictions on compulsory insurance bundling with loans and greater disclosure of distributor remuneration.
The proposals could therefore require several insurers to reduce operating and distribution costs over the transition period. IIFL Capital noted that lower commissions and expenses could potentially improve profitability or allow insurers to offer more attractive pricing, while also creating pressure on distributor incentives. The consultation remains open for stakeholder comments until October 25, 2026, so the final framework may differ from the current proposals.
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