Stakeholders can send comments on the distribution consultation paper until 25 October, after which draft regulations will go out for public consultation, Ajay Seth said.
Mumbai: The Insurance Regulatory and Development Authority of India (Irdai) wants insurers to win customers on the price and quality of their products and services rather than on how much they can pay intermediaries, chairman Ajay Seth has said, adding that the proposed overhaul of distribution costs remains open to revision. He made the remarks in an interview with Business Standard published on Wednesday.
Seth said the proposals draw on the objectives of the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025. According to him, the latitude given to insurers under the 2023 framework to manage spending within expenses of management (EoM) limits did not produce enough cost discipline, and commission payouts grew faster than premiums in several segments. He cited figures showing expenses at private life insurers climbing from 16 per cent in FY21 to about 22 per cent now, while those of private general insurers moved from 25-26 per cent in FY19 to roughly 32 per cent in FY26.
The regulator’s chief said the aim went beyond trimming commissions or lowering premiums and was centred on better value for policyholders through affordability, access and service quality, along with greater transparency. Asked about the sharp fall in the shares of listed distributors and insurers, he said the paper was not aimed at any company and that Irdai does not comment on individual stocks.
On the room for change, Seth was direct. “The document is a consultation paper, not the final regulatory framework,” he said. Alternative proposals would be considered if they were backed by sound economic or business reasoning and showed how policyholders would gain, he said, adding that the cut in EoM limits has been designed as a phased glide path rather than an abrupt shift.
According to Seth, the regulator is meeting industry participants while the comment window is open. Draft regulations will follow and will themselves go through public consultation before final notification, he said. Irdai will track the effect of the changes on insurance growth, affordability, reach in underserved markets and customer outcomes, he added.
Seth also said the Bima Sugam platform is expected to go live within four to six months. He described it as a not-for-profit, commission-neutral market infrastructure institution that will charge nominal fees, and said the Public Insurance Registry would give buyers comparable data on products, premiums and insurer performance.
Source: Business Standard, 30 September 2026
