Archive · 25 Jul 2026
Irdai Chairman flags high broker expenses
The chairman of Irdai, Ajay Seth, recently spoke at an event in New Delhi.
He talked about how some insurance brokers and intermediaries have very high expenses, sometimes as high as the insurance companies themselves.
He said this is not good for the industry because it makes the costs too high.
He also mentioned that some brokers have expenses that are 30% or more of the premiums they earn, which is a lot.
The regulator is thinking about making changes to how brokers and intermediaries work to make things better for everyone.
They want brokers to be more transparent and fair, especially in how they price insurance products.
Seth also said that the Point of Sales Person (PoSP) model should not make distribution costs go up.
He believes that brokers should share more information with policyholders so they can make better decisions.
Overall, the goal is to make the insurance sector healthier and more trustworthy.
Irdai Chairman Ajay Seth flagged high distribution costs of brokers and insurance intermediaries.
Some brokers have expense structures matching or exceeding those of insurance companies.
Seth outlined a nine-point expectation for the regulatory system, emphasizing financial prudence.
Irdai is considering massive distribution reforms and has sought granular data from insurers and intermediaries.
A consultation paper on enhanced disclosure norms for intermediaries earning over ₹10 crore in commission is expected by the end of July.
- Who
- Ajay Seth, Irdai Chairman
- What
- Flagged high distribution costs of brokers and insurance intermediaries
- When
- Saturday (specific date not mentioned)
- Where
- New Delhi
- Why
- To ensure the health of the insurance sector and encourage transparency
Brokers' Perspective
Regulator's Perspective
Expense Structures
Brokers' Perspective
Brokers argue that their expense structures are necessary for their operations and value-added services.
Regulator's Perspective
Irdai believes high expense structures are unsustainable and need to be reviewed for the health of the sector.
Transparency
Brokers' Perspective
Brokers may see transparency as potentially revealing sensitive business information.
Regulator's Perspective
Irdai emphasizes the need for transparency to build trust with policyholders and ensure fair practices.
Pricing Pressure
Brokers' Perspective
Brokers might argue that maintaining consistent pricing across channels ensures fairness and trust.
Regulator's Perspective
Irdai views this as potentially misleading and detrimental to policyholder trust.
- Event
- Silver Jubilee programme of the Insurance Brokers Association of India (IBAI)
- Speaker
- Ajay Seth, Irdai Chairman
- Location
- New Delhi
- Date
- Saturday (specific date not mentioned)
- Key Issue
- High distribution costs of brokers and insurance intermediaries
- Regulatory Action
- Consultation paper on enhanced disclosure norms for intermediaries
- Expected Outcome
- Massive distribution reforms in the insurance sector
- PoSP Model
- Point of Sales Person model should not push up distribution costs