The recent regulatory focus on dark patterns, seller tagging and commission reforms marks an important moment for India’s insurance sector. IRDAI’s decision to examine manipulative digital practices through independent audits is welcome, especially when online buyers are often nudged into sharing data, adding covers or making decisions without full clarity. Dark patterns weaken trust, and trust is the foundation of insurance.
The proposal to tag every policy to the individual seller is equally significant. Mis-selling often survives because accountability gets diffused between insurer, branch, platform and intermediary. If every policy carries a traceable seller identity, responsibility becomes clearer and complaints can be investigated more effectively.
The third reform—linking commissions to persistency, product complexity, customer profile and policy tenure—could bring a much-needed shift from “sell and forget” to long-term customer responsibility. Persistency-linked payouts may discourage short-term pushing of unsuitable policies and reward genuine advisory behaviour.
However, these reforms must not remain only on paper. The deeper challenge is cultural. Insurance distribution in India has too often been driven by targets, incentives and urgency rather than need analysis, suitability and education. Banks, agents, brokers, web aggregators and digital platforms must be held to the same standard of fairness.
IRDAI must also ensure that audits are independent, findings are acted upon, and penalties are meaningful. Seller tagging should be supported by proper training, call recordings, digital consent trails and simplified customer disclosures.
These reforms are promising, but the final test will be implementation. Insurance cannot grow sustainably through hidden nudges or misaligned incentives. It must grow through transparency, suitability and trust. For policyholders, this could be a major step forward—provided accountability becomes real.
Authored by:
Ram Gopal Agarwala
Editor-in-Chief, The Insurance Times
