Politics · India · 8 hrs ago
LIC agents seek higher commissions as IRDAI reviews distribution reforms
India’s insurance regulator is reviewing seven demands from LIC agents as it considers new rules for insurance distribution.
The Life Insurance Agents’ Federation of India opposes proposed commission caps, public disclosure of individual payouts and commission recovery in some suspected mis-selling cases.
The federation wants higher first-year and renewal commissions, saying agents continue to support customers after policies are sold.
Its concerns come as LIC agents earn an average monthly commission of ₹16,774, and LIC’s commission expenditure fell 4.55% in FY26.
Individual agents account for about 93% of LIC’s life insurance business, making the rules important to a large part of its sales network.
The regulator’s broader reform direction is unlikely to change, though it may adjust specific provisions after reviewing feedback.
Stakeholder feedback is due by October 25, after which IRDAI will finalise its guidelines.
India’s insurance regulator IRDAI will examine seven demands from the Life Insurance Agents’ Federation of India as it prepares guidelines on insurance distribution.
LIAFI is seeking higher first-year and renewal commissions and opposes proposed commission caps, individual payout disclosures and commission clawbacks.
The feedback deadline for IRDAI’s consultation paper is October 25.
The regulator has received LIAFI’s representation and will consider it, but is unlikely to reverse the overall direction of the reforms.
LIAFI says agents’ earnings are under pressure and that their work continues beyond the initial sale.
- Who
- The Life Insurance Agents’ Federation of India (LIAFI) and the Insurance Regulatory and Development Authority of India (IRDAI).
- What
- IRDAI will examine seven demands from LIAFI as it reviews proposed insurance distribution reforms. LIAFI seeks higher commissions and opposes several proposed rules.
- When
- Ahead of the October 25 deadline for stakeholder feedback.
- Where
- India.
- Why
- LIAFI says the proposed changes could squeeze agents’ earnings, while IRDAI’s consultation aims to recalibrate insurance distribution economics.
LIAFI
IRDAI
Commission levels
LIAFI
LIAFI seeks higher first-year and renewal commissions, saying agents’ earnings and costs are a concern.
IRDAI
IRDAI is reviewing proposed distribution reforms and is unlikely to reverse their broader direction.
Distribution rules
LIAFI
LIAFI opposes commission caps, public disclosure of individual agents’ payouts and automatic commission clawbacks in specified cases.
IRDAI
IRDAI is consulting on changes intended to lower costs, reduce mis-selling and improve value for policyholders.
Mint reported that IRDAI would examine LIAFI’s demands ahead of the feedback deadline.
The deadline for stakeholder feedback on IRDAI’s consultation paper is due to close.
- LIAFI demands
- Seven demands submitted for IRDAI’s consideration
- First-year commission
- 27% for policies of 5–9 years; 30% for 10–14 years; 35% for 15 years and above
- Renewal commission
- 7.5% from the second to sixth policy year; 6% from the seventh year until maturity
- Average LIC agent commission
- ₹16,774 per month
- LIC commission expenditure
- Declined 4.55% in FY26
- LIC business share
- Individual agents account for around 93% of LIC’s life insurance business
What people are saying
any substantial reduction in the earnings potential of agents could discourage new entrants and adversely affect the existing agency force.