Ajay Seth, chairman, IRDAI
“We are working on the regulations pertaining to the new commission structure in the industry. There will not be any surprise element in it. We will soon put out a consultative paper on it and will like to have industry views before deciding about it,’’ said Ajay Seth, chairman, IRDAI in an interaction with Asia Insurance Post
Mumbai:Ajay Seth, chairman, IRDAI, has said the insurance regulator will be coming out soon with a new set of regulations on payment of commissions to the intermediaries in the industry.
However, there will not be any surprise element in it, clarified Seth as the industry has been speculating various stringent ways IRDAI can act to curb the payment of higher commissions to intermediaries hindering the affordability and larger growth of the industry.
“We are working on the regulations pertaining to the new commission structure in the industry. There will not be any surprise element in it. We will soon put out a draft consultative paper on it and will like to have industry views before deciding about it,’’ said Ajay Seth, chairman, IRDA in an interaction with Asia Insurance Post in Mumbai.
After the IRDAI and the Reserve Bank of India(in its Financial Stability Report), the government in its Economic Survey has also expressed deep concern over the payment of higher commissions to the intermediaries that is making the products costlier for the customers.
Seth further said the IRDAI will soon come out with regulations for implementing the new provisions in the the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025, that was notified by the government in Dec after it was passed by the Indian parliament in the last Winter Session.
“`We will come out with the new regulations soon. We are working on it,’’ he said.
On the pending applications for licenses from new prospective insurance players, Seth said, “ We will take them up soon. Those who want to apply for new licenses, they can do that.’’
Many applications including one from Westbridge, the majority shareholder in Star Health Insurance, that has applied for a new general insurance license and has already received R1(the first stage of regulatory clearance) is pending.
It had received R1 just before Seth was appointed as the chairman of the the IRDAI at the fag end of July, 2025.
Market is watching the development as to how Irdai will sort out Westbridge’s majory stake in both Star Health and Kiwi General,for which license is pending at the IRDAI end.
“We will be keen to give licenses to genuine players with proper scrutiny and not to fly- by- night operators,’’ said another senior officials of the IRDAI adding that the regulator would prefer a few quality players..
Other players, who are waiting for licenses are- a general insurance joint venture among Qatar Insurance Group, Sam Ghosh’s Cosmea Financial Holdings and a few other investors, M Pallonji Group’s general insurance company with Divya Sehgal of True North. Even proposed acquisition of a majority stake in Magma General Insurance Ltd (formerly Magma HDI General Insurance) by Baba Ramdev’s Patanjali Ayurved is pending.