INCOME TAX19 Oct 2026
Irdai paper targets insurance selling costs and mis-selling
Irdai's 23 September consultation paper proposes lower expense limits, commission caps across products and channels, tighter incentive rules and stronger protection against mis-selling. It follows a 125% rise in distributor pay between FY23 and FY25 and a 28% rise in corporate-agent premiums, with insurance penetration still under 4% of GDP. For buyers, the test is suitability, not a signed form.
Key Statutory Highlights
- Irdai's consultation paper proposes cutting expense-of-management limits and capping commissions on products and channels.
- New-business premiums from corporate agents grew 28% from FY23 to FY25, while distributor remuneration rose 125%.
- The RBI's June 2026 framework for banks treats unsuitable sales as mis-selling even when the customer consents.
Actionable Advice for Taxpayers / Founders:Watch Irdai's 23 September consultation paper on insurance distribution economics, and whether the final rules require a suitability check on age, income, liquidity, risk capacity and goals before a high-value policy is sold.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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