Archive · 25 Sep 2026
Insurers seek phased commission reforms and scale-based expense caps
India’s insurance regulator has proposed new limits on how much insurers can pay as commissions.
The proposed limits would reduce payments for several types of insurance policies.
Insurers say they need more time to adjust to the changes.
They want the rules introduced in stages instead of all at once.
Smaller insurers say they often have higher costs while building their businesses.
They want expense limits to depend partly on company size.
The regulator says the proposals support better governance, transparency and sustainable growth.
The industry expects the final rules may be less strict than the draft.
The Insurance Regulatory and Development Authority of India proposed restoring hard commission caps across insurance segments and channels.
The proposal would reduce commissions for term, health, motor and savings insurance products.
Insurers are seeking phased implementation, saying immediate changes could disrupt varied business and distribution models.
Industry representatives want expense-of-management limits to vary by insurer size and business maturity.
Insurers expect the final commission rules to be less stringent than the current consultation paper.
- Who
- The Insurance Regulatory and Development Authority of India, life and general insurers, and industry executives including Alok Rungta and Krishnamoorthy Rao.
- What
- The regulator proposed new commission caps and tighter expenses-of-management limits, while insurers requested phased implementation and scale-based limits.
- When
- The proposals were reported after the regulator issued its consultation paper on Wednesday; no final implementation date was stated.
- Where
- India.
- Why
- The regulator cited governance, transparency and sustainable growth; insurers want time and flexibility to manage differences in products, distribution models, costs and company size.
Insurers’ requests
Regulatory proposal
Implementation timetable
Insurers’ requests
Insurers say the reforms should be phased in because business models, distribution mixes and cost structures differ.
Regulatory proposal
The consultation paper proposes new commission and expense limits, although it does not state a phased timetable in the reported details.
Commission levels
Insurers’ requests
General insurance executives say the proposed commission reductions are much steeper than expected and anticipate less stringent final rules.
Regulatory proposal
The Insurance Regulatory and Development Authority of India proposed hard caps based on factors including business segment, distribution channel, product complexity and selling effort.
Expense-of-management limits
Insurers’ requests
Insurers want different limits based on company size, arguing smaller and newer players face higher costs to attract agents, acquire customers and build brands.
Regulatory proposal
The draft would apply proposed limits linked to gross direct premium income, with the reported targets declining over time.
- Proposed term insurance commission
- 25-30%, down from 51%
- Proposed health insurance commission
- 15-20%, down from 24%
- Proposed motor insurance commission
- 0-15%, down from 26%
- Proposed savings insurance commission
- 5-25%, compared with 14-37%
- Life insurers’ proposed EoM limit
- 15% within two years and 12.5% within five years, compared with the current overall limit of 30-35%
- General insurers’ proposed EoM limit
- 20% of gross direct premium income within five years, down from 30% of gross written premium
- Standalone health insurers’ proposed EoM limit
- 30%, down from 35%