Archive · 8 Oct 2026
IRDAI Commission Proposal Raises Small-Town Insurance Access Concerns
India’s insurance regulator has proposed changing how much distributors can earn from selling insurance.
It has also proposed extra support for selling insurance in underserved places.
A broker says lower payments could make it harder for local advisors to serve customers in smaller towns.
Selling a low-cost policy can still take time and effort.
The broker estimates that earnings on some motor and health policies could drop.
Local advisors often help new buyers understand what a policy covers and how to make a claim.
Digital tools can help with comparisons and paperwork, but the broker says people may still need personal help.
The proposal is still being discussed, and the article does not say what final rules will be adopted.
IRDAI’s consultation paper proposes revised limits on insurance distributor remuneration and an additional allowance for business from underserved areas.
A broker warned that lower commissions could make small-premium policies uneconomical to sell and service, especially in smaller towns.
The broker estimated motor earnings could fall from ₹36–38 to ₹5–7 per ₹100 of new-business premium, and health earnings from ₹30–33 to about ₹15.
The broker said some Tier 3 advisors earning ₹8,000–15,000 monthly could see income fall to around ₹3,000–6,000.
The broker argued that digital tools can support, but may not replace, local advisors who help first-time buyers understand policies and claims.
- Who
- IRDAI has proposed changes affecting insurers and insurance distributors; a broker raised concerns about the effects on local advisors and customers.
- What
- A consultation paper proposes revised limits on distributor remuneration and an additional allowance for business from underserved areas.
- When
- In IRDAI’s latest consultation paper; no publication date is given.
- Where
- The concerns focus on Tier 2, Tier 3 and rural markets in India.
- Why
- The proposed changes have raised concerns that lower payouts could make it less economical to provide assisted insurance services in smaller markets.
Proposal and cost controls
Concerns about access
Revised distributor remuneration
Proposal and cost controls
IRDAI’s consultation paper proposes revised limits on distributor remuneration.
Concerns about access
The broker argues that lower payouts could make small-premium policies uneconomical to sell and service, potentially weakening local distribution.
Allowance for underserved areas
Proposal and cost controls
The proposal includes an additional allowance for business from underserved areas.
Concerns about access
The broker says the allowance should reflect actual customer-acquisition and servicing costs in smaller towns.
Digital distribution
Proposal and cost controls
Lower distribution costs could encourage greater use of digital and self-service channels.
Concerns about access
The broker says digital tools are more likely to complement local advisors than replace them, particularly for first-time buyers who need help understanding coverage and claims.
- Proposal
- Revised limits on distributor remuneration and an additional allowance for business from underserved areas.
- Motor earnings estimate
- The broker estimates earnings per ₹100 of new-business premium could change from around ₹36–38 to ₹5–7.
- Health earnings estimate
- The broker estimates earnings per ₹100 of new-business premium could change from around ₹30–33 to about ₹15.
- Tier 3 advisor income estimate
- The broker says an advisor earning ₹8,000–15,000 monthly could see income fall to around ₹3,000–6,000.
- Health premium trend
- The broker’s platform data show health insurance premiums per policy in Tier 2 and Tier 3 cities have risen by more than 70% since 2020.
- Distribution approach
- The broker describes a model in which technology supports comparisons and paperwork while advisors provide explanations and follow-up.