IRDAI aims to lower policy costs and curb mis-selling through tighter expense controls.
India’s insurance regulator will ensure a smooth transition to proposed rules capping commissions and tightening expense limits, with implementation potentially starting in January or April 2027, chairman Ajay Seth said.
The Insurance Regulatory and Development Authority of India (IRDAI) proposed the reforms last month to reduce policy costs and curb mis-selling across the insurance industry, as reported by Reuters.
The proposals have raised concerns amongst distributors and analysts that changes to commissions and expense limits could disrupt established business models, slow growth and lead to job losses in an industry that relies heavily on agents and banks to sell policies.
Seth said he had met insurers and distributors during the week. Their requests included greater flexibility for smaller players and low-value policies, as well as a transition period to implement the changes.
However, stakeholders had not challenged the problems identified by the regulator or the overall direction of the proposed reforms, he said.
The rules could take effect in January or on 1 April 2027, depending on industry feedback. IRDAI will issue draft regulations following the consultation, giving stakeholders another opportunity to comment.