Archive · 1 Oct 2026
Insurance brokers warn commission caps could hurt jobs, access
India’s insurance regulator is considering new rules for how insurance is sold.
The rules would put limits on commissions paid to distributors and reduce how much insurers can spend.
Insurance brokers say these changes could make it harder to serve customers.
They are especially concerned about people in smaller towns.
Brokers compare policies and help customers during claims.
The brokers’ association says they should not be paid less than tied agents when they work independently for customers.
It supports rules against mis-selling and forced insurance bundling.
The association wants the existing 2023 framework kept until it is properly reviewed.
It says the proposed changes could also affect jobs and India’s goal of expanding insurance coverage.
The Insurance Brokers Association of India opposes the proposed commission caps and a more than 30% reduction in insurers’ expense limits.
The proposed framework includes more than 30 commission caps across insurance products and distribution channels.
Brokers say lower remuneration could weaken customer service, reduce employment and limit insurance access in smaller towns.
The association supports safeguards including suitability rules, commission clawbacks for proven mis-selling and disclosure of related-party payments.
Insurance Brokers Association of India wants the 2023 expense framework retained and a regulatory impact assessment completed before new rules are drafted.
- Who
- The Insurance Regulatory and Development Authority of India proposed the reforms, while the Insurance Brokers Association of India opposed key provisions.
- What
- A consultation proposes more than 30 commission caps and a more than 30% reduction in insurers’ expense limits; brokers are seeking changes.
- When
- The cited distribution data is as of March 31, 2025; the association said it would submit its detailed response by October 25, with the year not specified.
- Where
- India’s insurance market, including smaller Tier-2 and Tier-3 towns.
- Why
- The regulator is consulting on changes to insurance-distribution economics, while brokers argue the measures could harm customer service, jobs and insurance access.
Insurance Regulatory and Development Authority of India proposal
Insurance Brokers Association of India concerns
Commission limits
Insurance Regulatory and Development Authority of India proposal
The consultation proposes more than 30 commission caps across insurance products and distribution channels.
Insurance Brokers Association of India concerns
The association argues that broad caps could weaken brokers, reduce customer service and make some markets uneconomical to serve.
Insurer expense limits
Insurance Regulatory and Development Authority of India proposal
The proposed framework would reduce insurers’ overall expense limit by more than 30% over five years.
Insurance Brokers Association of India concerns
The association warns that the reduction could lead to fewer sales, servicing and claims staff.
Policyholder protection
Insurance Regulatory and Development Authority of India proposal
The consultation includes reforms on insurance-distribution economics, while the association says it supports measures to protect policyholders and improve transparency.
Insurance Brokers Association of India concerns
The association supports bans on compulsory loan-linked bundling, enforceable suitability rules, clawbacks for proven mis-selling, related-party payment disclosures and salesperson identity tagging, but prefers conduct and fair-value rules over blanket caps in some segments.
Regulatory timetable
Insurance Regulatory and Development Authority of India proposal
The proposal would replace the 2023 framework before its scheduled 2028 review.
Insurance Brokers Association of India concerns
The association says replacement should not occur without a regulatory impact assessment and has urged retention of the 2023 framework.
- Proposed commission caps
- More than 30 caps across products and distribution channels.
- Proposed expense reduction
- A more than 30% cut in insurers’ overall expense limit over five years.
- General insurers’ expenses
- Total expenses fell from 28.2% of premium in 2022-23 to 26.5% in 2024-25, according to the brokers’ association.
- Point-of-sale persons
- Brokers sponsored 14.81 lakh of India’s 27.18 lakh point-of-sale persons as of March 31, 2025.
- Motor insurance service providers
- Brokers sponsored 16,230 of 26,316 providers as of March 31, 2025.
- Claims complaints
- The association cited regulator data showing 69% of complaints against general insurers relate to claims and 63% are decided in customers’ favour.
- Brokers’ request
- Retain the 2023 expense-management framework, narrow caps to credit-linked and other coerced-choice sales, exempt commercial and large risks, and publish an impact assessment.