INCOME TAX27 Sept 2026
Irdai’s distribution overhaul: Will it make insurance cheaper, curb mis-selling? | Mint
Irdai has proposed big reforms to how insurance is sold in India. It wants commission caps, three clear distributor categories, and lower expense limits over five years. It also plans stronger guards against mis-selling. For you, buying and claiming insurance could become simpler. But experts say lower commissions alone may not cut premiums. Real change depends on how well the rules are implemented.
Key Statutory Highlights
- Irdai has proposed first-year commission caps of 20% for institutional distributors and 25% for agents on individual life savings products with premium-paying terms of 10 years or more.
- For health insurance, first-year commission is proposed at 15% for institutional distributors and 20% for agents, with portability commission proposed for the first time.
- Life insurers would need to bring expenses of management down to 15% of gross direct premium income in two years and 12.5% in five years.
Actionable Advice for Taxpayers / Founders:Before your next policy purchase or renewal, ask your agent or bank to explain the commission and charges in writing, and compare plans yourself. These are still proposals, so confirm the final rules with your advisor.
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
Share: