Archive · 25 Sep 2025
Insurers to Cut Distributor Commissions After Tax Change
Insurance companies are talking about paying less money to the people who sell their insurance, like banks and online platforms.
This is because the government stopped charging a tax on health insurance, which saved customers money.
However, this has made it more expensive for the insurance companies, so they want to pay less to the sellers to make up the cost.
The companies selling insurance are likely to be impacted the most.
The changes will be announced soon.
Insurance companies are discussing commission cuts.
The cuts follow a health insurance GST exemption.
Insurers passed the GST benefit to policyholders.
This results in a 5-8% cost burden for insurers.
Web aggregators are likely to be most impacted.
- Who
- Insurance companies and distributors
- What
- Discussions to reduce distributor commissions
- When
- Following health insurance GST exemption
- Where
- Not specified in article, but presumably India
- Why
- To share costs from the GST exemption benefit passed on to policyholders
Insurance Company
Distributors
Financial Impact of GST Exemption
Insurance Company
Needs to share the cost burden.
Distributors
Commission income to be reduced.
- Affected Parties
- Web aggregators, banks, and individual agents
- Reason for Change
- Health insurance GST exemption
- Impact on Policyholders
- Received full benefit of GST reduction
- Expected Cost Burden
- 5% to 8% for insurers
- Web Aggregator Impact
- Likely to be higher
Sources
IRDAI seeks to curb high insurance commissions, considers MF-style cap: Sources
New IRDAI Chairman Wants Distributor Commissions Lowered
Insurance complaints surge as mis selling, commission driven sales take centerstage: Report
