From Financialexpress · FE Bureau · · 1m 20s
Irdai Reforms Threaten 1 Million Livelihoods
Irdai’s distribution reforms risk 1 million livelihoods as IBAI warns of unethical practices and reduced staff.
In brief
Irdai’s distribution reforms risk 1 million livelihoods as IBAI warns of unethical practices and reduced staff. Irdai’s proposed insurance distribution reforms could cut 1 million livelihoods by reducing sales and servicing staff, risking unethical business practices. Originally reported by Financialexpress.
Irdai Proposes Distribution Reforms
Irdai’s proposed distribution reforms could put at least one million livelihoods at risk and bring back unethical business practices addressed by the 2023 expenses regulations.
IBAI Warns of Staff Cuts
The Insurance Brokers Association of India raised concerns in a letter to Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman about reductions in sales, servicing and claims staff.
Distribution Reach Shrinks
Distribution reach shrinks precisely when Insurance for All by 2047 requires more of it, with penetration at 3.7% of GDP against a global average above 7%.
“Distribution reach shrinks precisely when Insurance for All by 2047 requires more of it, with penetration at 3.7% of GDP against a global average above 7%”
Sector Employment Data
Insurance distribution employs more than 8.3 million professionals including individual agents, micro-insurance agents, point-of-sale persons and motor insurance service providers.
Commission Caps Risk GST Issues
Imposing sub-caps could recreate the conditions that resulted in ₹824 crore of bogus GST input credit at 15 insurers before the 2023 EoM guidelines.
“Imposing sub-caps could recreate the conditions that resulted in ₹824 crore of bogus GST input credit at 15 insurers before the 2023 EoM guidelines”
Public Sector Insurers at Risk
Public sector insurers, bound by government audits, cannot match off-book payments and could lose market share as they did under the earlier product-wise cap regime.
The short version
Irdai’s proposed insurance distribution reforms could cut 1 million livelihoods by reducing sales and servicing staff, risking unethical business practices.
