06 Nov 2026
Insurance distribution reforms: will lower commissions benefit policyholders?
19 Oct 2026
19 Oct 2026
This is a link-enhanced version of the article published on Mint.
Article Overview:
The article examines IRDAI’s proposed insurance distribution reforms, including commission caps and changes to Expenses of Management (EoM). It discusses concerns raised by insurance brokers regarding potential revenue losses, employment impact and customer servicing challenges, while also exploring whether reduced distribution costs will ultimately benefit policyholders. The article highlights the need for a calibrated transition, alternative revenue streams and mechanisms to ensure any savings are passed on to customers through improved affordability, coverage and service.
Our Partner Ashish Teni, shared his perspective. Here’s what he had to say:
“Corporate agents may benefit from other business lines, whereas insurance brokers rely more directly on remuneration from insurance distribution and permitted ancillary services to support their operations. They must also meet regulatory capital requirements and sustain significant expenditure on skilled personnel, technology, infrastructure and customer servicing.”
“Brokers play an important role in extending insurance access to customers, including through last-mile distribution. A calibrated transition, realistic implementation timelines and a clearly defined framework for alternative revenue streams would help intermediaries adapt while preserving customer access and appropriate conduct standards.”
“Assessing the impact of distribution reforms requires more than looking at aggregate commission or expense figures. In retail insurance, a granular assessment of distribution costs, underwriting performance, claims experience and overall product economics is important. Equally, the assessment should examine whether any savings translate into tangible customer benefits, including improved affordability, coverage and service.”
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