From The Economic Times · ET Online · · 1m 10s
IRDAI to cap insurance commissions from January
India's insurance regulator plans commission caps for brokers starting January 2024.
In brief
India's insurance regulator plans commission caps for brokers starting January 2024. IRDAI will implement insurance commission caps from January 2024 to reduce costs and encourage wider coverage. Originally reported by The Economic Times.
IRDAI reform timeline
India's insurance regulator plans to implement distribution reforms starting in January 2024.
Commission cap proposal
IRDAI proposes capping commissions paid by insurers to brokers and distributors across life, health, property and casualty insurance.
Market reaction
PB Fintech fell 36% and Turtlemint Fintech Solutions lost half its value after the proposals.
Job impact concerns
Insurance Brokers Association of India warned proposed changes might affect up to 1 million jobs in the sector.
Regulator response
IRDAI executive Girijia Subramanian rejected job loss fears, saying reforms would create more employment by expanding the distribution network.
Geographic incentives
Distributors in areas with populations under a million get 10% extra commission, rising to 20% for towns with less than 50,000 people.
Implementation timeline
IRDAI will phase in management expense reductions over five years with first milestone in financial year ending march 2029.
At a glance
IRDAI will implement insurance commission caps from January 2024 to reduce costs and encourage wider coverage.
