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Open for comments till 25 October 2026

Tell IRDAI what you think about insurance commissions, before 25 October

The insurance regulator has put out what it found about the commissions built into your premiums, and it proposes to cap them. The people paid by the current system are asking for more time. Policyholders need to be heard too. This page sets out what the paper found, where it should go further, and gives you comments you can paste in about ten minutes.

By 37xBetter · a banker's view · Last reviewed 11 October 2026

Why one comment from you matters

A consultation paper is the stage where the rules can still change. On 6 October 2026, Business Standard reported that the brokers' industry association asked IRDAI to extend the deadline to the end of December, warned of a 60 to 70 percent fall in broking revenue, and put the possible job losses at about 10 lakh. Distributors will send detailed comments, and they should, because brokers and agents do real work for customers, including help with claims, and the regulator should weigh that.

Policyholders rarely send comments, and that is the gap. Every rupee of commission described below came out of a premium that someone like you paid. If the only voices IRDAI hears are from the people who receive that money, the final rules will reflect that.

What IRDAI found, in its own numbers

All figures in this section are from Part 1 of the consultation paper. The paragraph or box number is given so you can check each one, and quote it in your own comment.

In the paper's own words, remuneration is growing four to five times faster than the business it is paid on (para 44).

On the rise in expenses since 2023, the paper says plainly that "it is policyholders who have funded the reversal" (Box 1).

What IRDAI proposes, and why you can support it

The paper is long, and much of it deals with how distributors are registered. These are the parts that touch policyholders most directly.

• Hard caps on commission for each type of product and channel, where every payment counts towards the cap, including incentives, rewards, reimbursed expenses, gifts and trips (Section 8, Boxes 4A and 4B).
• Lower total expenses for insurers. Life insurers to come down to 15% of premium in two years and 12.5% in five, and general insurers to 25% and then 20%, with FY2027-28 as the first year (Box 2).
• Nil commission on third-party motor cover for a new vehicle sold through distribution entities, and 2.5% for agents (Box 4A).
• Lower commission on health renewals and porting than on a first sale, so moving you between insurers stops being a source of income (Box 4A).
• A ban on compulsory bundling of insurance with loans. Packages stay allowed only when you gain from them, and you must be shown the loan rate with and without the insurance (Section 10).
• A ban on volume-linked or reward-linked incentives for bank and NBFC staff who sell insurance (para 138).
• Twelve examples of mis-selling that would attract action, including selling a regular-premium plan as a one-time payment, promising assured returns on a par plan or ULIP, and selling a plan in place of a bank deposit when its return is lower or at best similar (Box 5).
• Suitability as an obligation. For life sales above a set size, a written needs analysis with an audit trail, and your signature alone does not clear the seller (para 137).
• Each policy tagged to the person who sold it, mis-selling records made public, and commission clawed back when a policy is mis-sold (paras 139 and 140).
• A direct, verified contact between you and the insurer before the policy is issued, through any channel (para 124).
• Premium paid straight to the insurer from your own account, and claims paid to a verified account in your or your nominee's name (paras 126 to 129).
• Prices and product sheets visible without giving your phone number or email, with dark patterns banned, and standard definitions for claim and service figures so insurers can be compared (paras 118 to 122).
• Better-trained sellers: at least 100 hours of training and class 12 as the minimum qualification for new entrants (Section 6).

Where the paper should go further

Support is useful, and specific suggestions are more useful. These are the gaps I would point out, each with a ready comment below.

1. Show the commission on every retail policy

The paper asks insurers to publish their commission policies on their websites, but the actual commission appears on the policy itself only for commercial cover above ₹50 crore (para 109). A large company can ask its broker what the broker earns. A family buying a savings plan at a branch cannot. The paper itself asks, in Question 18, whether the sector is ready to move to fees paid directly by policyholders. A simple first step is to show the commission, in rupees, on the proposal form and the benefit illustration of every individual policy. Ready comment 3.

2. Pay savings-plan commission over the years the customer stays

Under the proposed caps, a savings plan with a premium term of 10 years or more can still pay 20% of the first-year premium to a distribution entity and 25% to an agent, and up to a fifth more on sales in small towns and rural areas (Box 4B). The paper's own principle is that life commission should reward persistence over the years (Section 8, principle 9). With only 48% of policies alive in the 61st month, more of the commission should be paid over the years the policy stays in force. Ready comment 4.

3. Spell out the claw-back

Paragraph 140 is one sentence: mis-selling should lead to commission claw-back by insurers. It does not say when it applies, how much is recovered, or who gets the money. Without that detail, it will be hard to enforce. Ready comment 5.

4. Check suitability on every regular-premium savings plan

The written suitability check applies only to life sales "above a defined ticket size" (para 137). The households hurt most by a wrong plan are often the ones buying small policies they cannot keep paying. Every regular-premium savings plan should get the check. This is covered in ready comment 2.

5. Hold the institution responsible, not only the person at the counter

Tagging each policy to the seller is a good step. But in nineteen years of banking I have seen that staff at the counter usually repeat what they were taught in product training by the insurer's representatives. If only the individual carries a public record, the training room that produced the pitch goes untouched. Mis-selling, lapse and surrender rates should also be published for each distribution entity and each insurer. Ready comment 6.

6. Put the real return in front of the buyer

The paper says that returns on life-cum-savings products "remain incomparable" (para 70). The fix is a single number: the effective yearly return (IRR) of the guaranteed benefits, shown on page one of the benefit illustration and read out in the verification call proposed in paragraph 124. You can see what that number looks like for a typical guaranteed plan in our endowment returns calculator. Ready comment 7.

7. No extension

The expense limits start with FY2027-28 and take five years to reach their final level (Box 2). Requests to push the deadline or the timeline further mean policyholders keep paying today's costs for longer. Ready comment 9.

How to send your comment

1. Open the consultation portal at iib.gov.in/dr. The paper and the Excel template are there too.
2. Choose one way to send it. The web form is the easiest. You can also fill in the Excel template and upload it on the same portal, or email the filled Excel template to drfeedback@iib.gov.in with the subject line Reforms for Recalibrating Economics of Insurance Distribution. The paper asks you to use only one mode for each submission, to avoid duplicates (para 162).
3. Paste one or more of the comments below. Each one names the consultation question it answers, so you can put it against that question. You do not have to answer all 32 questions. The paper invites views on the whole paper, and on the questions in particular.
4. Say who you are in one line, for example "I am a salaried policyholder and hold two life policies." That tells the regulator your comment comes from a policyholder.
5. Send it before 25 October 2026.

A few cautions. Keep your policy number, PAN, Aadhaar and phone number out of the comment. Stick to what happened, with dates and amounts where you have them. Do not name the employee who sold you the policy; the person at the counter was usually trained to say what they said.

Ready comments you can paste

Copy a comment, change the words in [square brackets] to your own facts, and paste it into the form. Edit freely. A comment in your own words carries more weight than a copy.

I am a policyholder, and I support these reforms. The paper shows that distributor remuneration grew four to five times faster than premium between FY23 and FY25 (para 44), and that only 48% of life policies are still in force in the 61st month (para 48). Every rupee of that commission came out of premiums paid by people like me. Please go ahead with hard commission caps that count every form of payment, including rewards, gifts and trips, and please do not dilute them in the final regulations.

I want to share how a policy was sold to me. In [year], at [a bank branch / my home / my office], I was offered a [endowment / money-back / ULIP / single-premium] plan. I was told it was [like a fixed deposit / guaranteed to double my money / a one-time payment]. I was not told [that premiums run for [N] years / how little I would get back if I stopped / the actual return]. I paid Rs [amount] a year for [N] years. [When I needed the money, I could get back only Rs [amount].] [The real return works out to about [X]% a year.] This matches the mis-selling illustrations in Box 5 of the paper. Please keep all twelve illustrations in the final regulations, apply the written suitability check to every regular-premium savings plan and not only above a ticket size (para 137), and make the commission claw-back automatic when a complaint like mine is upheld.

The paper proposes that commission be shown on the policy document only for commercial cover above Rs 50 crore (para 109). Retail buyers need this more than large companies do. Please require the commission, in rupees and as a percentage, for the first year and for later years, to be shown on the proposal form and the benefit illustration of every individual policy, before the customer signs. People cannot judge advice when they cannot see what the seller earns from it. I would also welcome an option to pay a fee directly for advice, as asked in Question 18.

For savings plans with a premium term of 10 years or more, the proposed caps still allow 20% to 25% of the first-year premium, and more on sales in small towns (Box 4B). The paper itself found that only 48% of life policies survive to the 61st month (para 48). Please pay commission on regular-premium savings plans in equal parts across the premium-paying years, or hold back a large part of it until the policy completes five years. A seller should earn for as long as the customer stays with the policy, which is what principle 9 in Section 8 already intends.

Para 140 says mis-selling should lead to commission claw-back, but it does not say how. Please define it in the regulations. The claw-back should apply whenever a mis-selling complaint is upheld by the insurer, Bima Bharosa, the Ombudsman or a court, and whenever a regular-premium savings policy lapses or is surrendered within its first three years. The recovered amount should go towards refunding the policyholder, and the insurer should not keep it.

Tagging each policy to the person who sold it (para 139) is a good step. But staff at the counter often repeat what they were told in product training by the insurer. Please also publish mis-selling, lapse and surrender rates for each distribution entity and each insurer, and hold the insurer responsible for the claims made in its training and sales material. The person at the counter should not be the only one with a public record.

Para 70 says returns on life-cum-savings products remain incomparable. Please require every non-linked savings plan to show the effective yearly return (IRR) of its guaranteed benefits, after all charges, on the first page of the benefit illustration, next to the current bank fixed deposit rate. The same figure, together with what the customer gets back if they stop paying after one year, should be read out in the direct verification contact proposed in para 124, before the policy is issued.

I support the ban on compulsory bundling (Section 10). Please also require every loan sanction letter to say in plain words that buying insurance is optional, that it can be bought from any insurer, and what the loan rate is with and without the insurance. The premium for any policy sold with a loan should never be added to the loan amount without the borrower's separate written consent.

Please do not extend the timeline. The paper shows that expenses have risen back to the levels of a decade ago and that policyholders funded the reversal (Box 1). Every year of delay is paid for by policyholders. I request that the commission caps apply from FY2027-28, the first year of the glide path, and that the expense limits in Box 2 are not relaxed.

Yes, please make the option to buy on an MII platform such as Bima Sugam the default for every new vehicle, with an opt-out. A buyer at the dealer has no real choice today. The paper shows average commissions of 27% and 38% on new vehicles through OEM brokers and dealers (para 141), and third-party commission rising from 4.3% to 22% on a premium the regulator itself sets (para 52). Please also enforce the rule that a dealer cannot refuse cashless repair because the policy was bought elsewhere.

Before you write about your own policy

If you hold a traditional savings plan, put its numbers into the endowment returns calculator first. A comment that says "I was told this was as good as a fixed deposit, and its real return works out to about 5% a year" is far stronger than one that says the plan was bad. If you are thinking of stopping a policy, run the surrender check before you do anything, because stopping is not always the better choice.

Pass it on

Most people who were mis-sold a policy do not know this consultation exists. Send this page to one person who holds an endowment, money-back or ULIP plan. The short link is 37xbetter.com/irdai.

Sources

• IRDAI, "Recalibrating Economics of Insurance Distribution", public consultation paper, Part 1, 23 September 2026. Paragraph and box numbers are cited against each figure on this page. The paper and the comment form are at iib.gov.in/dr.
• Business Standard, "Irdai distribution overhaul could hit brokers' revenue by 70%: IBAI", 6 October 2026.

Every rupee of commission comes out of a premium someone paid.