INCOME TAX27 Sept 2026
Will your insurance premium get cheaper? Here’s what IRDAI’s proposed reforms could change | Mint
IRDAI has proposed reforms to cut insurers' distribution and operating costs, mainly by lowering expenses of management limits and tightening commissions. If insurers pass on these savings, premiums may face some downward pressure. However, cheaper premiums are not guaranteed, because claims experience, reinsurance and competition also drive pricing. Ask your insurer or agent how these changes affect your policy.
Key Statutory Highlights
- IRDAI has proposed lowering Expenses of Management limits, moving life insurers towards a 12.5% of gross direct premium income cap, and general insurers from 30% of gross written premium to 20% over five years.
- The consultation paper proposes banning volume-linked and reward-linked incentives, such as foreign trips and milestone bonuses, for bank and NBFC staff selling insurance.
- Premiums should be paid through the customer's own UPI, credit or debit card or bank account, and third-party payments should not be accepted.
- For large life insurance policies, suitability could become a formal requirement with a documented assessment of the customer's needs.
Actionable Advice for Taxpayers / Founders:Ask your insurer or agent whether any cost savings from these proposed changes will actually be passed on to you, and do not assume your premium will fall.
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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