Insurance CEOs to meet IRDAI Chairman today to discuss commission regulations
The meeting comes at a time when commission payouts have started to outpace premium growth, drawing the regulator’s attention.
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Insurance CEOs will be meeting Insurance Regulatory Development Authority of India (IRDAI) Chairman on Tuesday (Februray 10) to discuss commission regulations, amid growing concerns over rising distribution costs and increased regulatory scrutiny, according to people familiar with the discussions.
The meeting comes as commission payouts in the industry have started to outpace premium growth, drawing attention from the regulator.
First-year and acquisition commissions have risen sharply, with industry-wide payouts exceeding ₹60,800 crore in life insurance and more than ₹47,000 crore in general insurance in FY25, according to the latest IRDAI report.
These trends have contributed to multiple insurers breaching prescribed expense of management (EoM) limits, which cover commissions and other operating costs.
Industry executives say that higher commissions are not only sales incentives but also reflect rising costs of customer servicing, compliance, training, and advisory roles.
Insurers caution that imposing sharp or uniform caps on commissions could disrupt key distribution channels, particularly agency-led and bancassurance models, and may eventually push up product prices for consumers.
Former IRDAI members Thomas Devasia and Nilesh Sathe have previously called for a revisit of commission rules, pointing to higher payouts and weaker oversight following the repeal of specific commission regulations in 2021.
Devasia added that commissions need to be reasonable, especially for mandatory products such as motor and health insurance, and stressed that IRDAI already receives detailed reports allowing it to track payouts across all lines of business.
The push for fresh regulations comes as the government prepares to reintroduce formal oversight. Department of Financial Services Secretary M Nagaraju confirmed that IRDAI is expected to release draft regulations following changes in the Insurance Amendment Bill, with final rules likely within three to four months.
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