Kathmandu. India’s insurance regulator has said that the proposed rules to limit commissions and tighten expense limits will ensure smooth implementation. Ajay Seth, chairman of the Insurance Regulatory and Development Authority of India (IRDAI), said, “The proposed rules can be implemented from January or April 2027. ’
According to a Reuters report, IRDAI proposed these reforms last month. The regulator has made it clear that they are aimed at reducing policy costs in the insurance industry and preventing mis-selling.
Those proposals have raised concerns among distributors and analysts. They believe that changes in commission and spending limits could affect existing business models, slow growth and lead to job losses. That’s because the industry relies heavily on agents and banks to sell insurance policies.
According to Chairman Seth, he had a meeting with insurance companies and distributors last week. Their demands included more flexibility for smaller companies and lower-priced policies and a transition period to implement these changes.
However, “None of the stakeholders have raised any questions about the issues identified by the regulator or the direction of the proposed reforms,” Sheth said. ’
Depending on the feedback from the industry, these rules may come into effect from January or April 2027. IRDAI will issue draft rules after a consultation process. This will provide another opportunity for stakeholders to provide their feedback. -Agency
