- IRDAI is considering phased implementation of insurance commission reforms after stakeholder feedback
- The regulator may set the reform rollout date for January 1 or April 1, based on consultations
- IRDAI aims to avoid disrupting insurance agents or current business models with new measures
IRDAI Chairman Ajay Seth, on Thursday, said that the insurance regulator is receiving suggestions from industry stakeholders on its proposed insurance distribution reforms and is open to considering changes, including a phased implementation of commission-related measures.
Speaking to reporters at Samvaad 2026 India Open Finance Summit, Seth said the Insurance Regulatory and Development Authority of India (IRDAI) is weighing January 1 or April 1 as the implementation date for the reforms. The final timeline will depend on industry feedback, with draft regulations expected after the ongoing consultation process.
Seth said the regulator does not intend to disrupt the livelihoods of insurance agents or existing business models. It is also considering concerns raised by smaller insurers, distributors and stakeholders involved in low-ticket insurance policies.
The chairman said IRDAI is open to suggestions on a phased rollout of commission reforms. He added that the regulator has received no concerns that the proposed changes would adversely affect foreign direct investment (FDI) in the insurance sector, with foreign investor interest in both life and general insurance remaining strong.
Seth also said insurance policy details could be integrated into consolidated account statements, while the risk-based capital framework remains on track for implementation from April 1, 2027.
IBAI Seeks Intervention Over Proposed Commission Caps
The consultations come amid concerns raised by insurance intermediaries over IRDAI's September 23 consultation paper, Recalibrating Economics of Insurance Distribution.
The Insurance Brokers Association of India (IBAI) had written to Prime Minister Narendra Modi seeking intervention and requested a meeting with the regulator before the October 25 deadline for stakeholder feedback.
IBAI urged IRDAI to retain the existing 2023 Expense of Management framework until its scheduled review in 2028, opposed hard caps on commissions and called for a published assessment of the proposals' likely impact.
The association warned that the proposed changes could affect intermediary livelihoods, competition and insurance penetration, while questioning whether lower distribution costs would necessarily translate into benefits for policyholders.
IRDAI's consultation paper proposed commission caps across more than 30 product and distribution-channel categories, alongside a reduction of around one-third in insurers' overall expense limits. The regulator is now weighing stakeholder feedback before finalising the framework.
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