# IRDAI Proposes Commission Clawback for Mis-selling

> IRDAI plans to claw back insurance commissions when policies are mis-sold, tagging sales staff to policies for accountability.
- Title: IRDAI Proposes Commission Clawback for Mis-selling | Shortify
- Summary: IRDAI plans to claw back insurance commissions when policies are mis-sold, tagging sales staff to policies for accountability. IRDAI proposes clawing back…
- Keywords: irdai, insurance, mis-selling, commissions, clawback, policy persistency, distribution costs, Proposes, Commission, The Economic Times
- Source: The Economic Times — https://economictimes.indiatimes.com/industry/banking/finance/insure/irdai-proposes-clawback-of-commissions-in-case-of-mis-selling/articleshow/134465592.cms
- Author: Shilpy Sinha
- Published: 2026-09-24T15:13:00+00:00
- Read time: 1 min
- Topics: irdai, insurance, mis-selling, commissions, clawback, policy persistency, distribution costs
## IRDAI Proposes Commission Clawback
IRDAI has proposed clawing back commissions from insurers in cases of mis-selling while making sales staff more accountable by tagging their identity to policies sold.

> Proper claw back arrangements can be put in place for recovering excess payments for cases where policies are cancelled
## Tagging Sales Staff to Policies
The regulator requires the salesperson’s identity to be tagged to each policy sold and places mis-selling incidents in the public domain for transparency.
## Ban on Sales Incentives
IRDAI has proposed banning incentives for bank and NBFC employees linked to insurance sales volumes or rewards to prevent mis-selling.
## Distribution Costs Rise
IRDAI flagged a sharp rise in distribution costs for private life insurers from 21.3% to 20.2% of gross premium in FY15 to FY26, affecting policy persistency.
## Policy Persistency Concerns
IRDAI states that mis-selling incidents should lead to commission claw-back by insurers to improve policy persistency and reduce distribution costs.
## Key takeaway

IRDAI proposes clawing back insurance commissions from sales staff in cases of mis-selling to improve accountability and policy persistency.