Archive · 6 Oct 2026
Insurance Brokers Ask Sitharaman to Halt Proposed Commission Caps
India’s insurance regulator has asked people and organizations to comment on proposed changes to how insurance sales are paid for.
The Insurance Brokers Association of India wants Finance Minister Nirmala Sitharaman to pause the proposed commission caps and study their effects.
The group supports rules to stop unsuitable insurance sales and insurance being forced together with loans.
But it says the proposed spending cuts could put many insurance-related jobs at risk.
It also worries that customers might not receive lower premiums even if insurers spend less on selling policies.
The association prefers keeping the current expense framework, with clearer rules if necessary.
It has asked to meet the minister before comments are due on October 25.
The Insurance Brokers Association of India (IBAI) asked Finance Minister Nirmala Sitharaman to pause proposed insurance commission caps and assess their likely impact.
The appeal follows IRDAI’s September 23 consultation paper on insurance distribution economics; stakeholder comments are due by October 25.
IBAI supports steps against mis-selling, including banning compulsory insurance bundling with loans and strengthening suitability requirements.
IBAI says cutting insurers’ overall expense limits by one-third could put at least 10 lakh livelihoods at risk over five years.
The association questions whether lower distribution costs would reduce premiums and proposes keeping the 2023 expense-of-management framework, with tighter calculation rules if needed.
- Who
- The Insurance Brokers Association of India (IBAI) and Finance Minister Nirmala Sitharaman; the proposal was issued by IRDAI.
- What
- IBAI has urged the finance minister to halt proposed commission caps and seek an impact assessment.
- When
- IRDAI released its consultation paper on September 23; stakeholder comments are invited until October 25.
- Where
- India.
- Why
- IBAI says the proposed caps and expense-limit reduction could threaten livelihoods and may not ensure that savings benefit policyholders.
IBAI’s concerns
Proposed regulatory changes
Commission and expense controls
IBAI’s concerns
IBAI opposes more than 30 product- and channel-specific commission caps and a one-third cut in overall expense limits, warning of possible job losses and compliance risks.
Proposed regulatory changes
IRDAI’s consultation paper proposes recalibrating insurance distribution economics through commission caps and reduced overall expense limits.
Benefits for policyholders
IBAI’s concerns
IBAI says lower distribution costs may not reduce premiums unless a mechanism ensures savings are passed on to customers.
Proposed regulatory changes
The consultation proposes changes to insurance distribution costs; the article does not state IRDAI’s position on how savings would reach policyholders.
- Consultation paper
- “Recalibrating Economics of Insurance Distribution”
- Paper released
- September 23
- Feedback deadline
- October 25
- Proposed expense-limit change
- A one-third reduction in insurers’ overall expense limits
- Distribution workforce cited by IBAI
- More than 83 lakh professionals
- Livelihoods potentially at risk
- At least 10 lakh over five years, according to IBAI
- IBAI’s alternative
- Retain the 2023 expense-of-management framework, with tighter calculation rules if needed