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.
A balanced and well-structured commission framework is essential to protect the interests of all three stakeholders—consumers, intermediaries, and insurers.
Consumers benefit from transparent pricing and controlled premium costs; insurers require sustainable cost ratios and underwriting discipline; and agents, as the primary market builders and service providers, need fair and predictable remuneration to deliver quality post-sales support.
Over the years, detariffing, excessive discounting, and proliferation of add-ons have distorted pricing and increased costs.
A uniform, net-based remuneration structure, coupled with rationalisation of discounts and add-ons, will help restore stability, improve affordability, and strengthen trust across the insurance ecosystem. IRDAI’s consultative approach is therefore welcome and timely.
The present norms on commission are being misused by some insurance companies to the benefit of a section of brokers. They are using it for conversation of black money….. basically money laundering business is being encouraged.
Transparency in commission structure and a level playing field for all intermediaries should be there.
Conflict of business interest is seen in Vehicle Dealers procuring Business. Cashless is not being extended to Customers who take their own Insurance- which means Dealers are not in a mood to extend this service to Customers whose policies are directly serviced by the Insurance Companies for which they do not get any Commission.
So first time car buyers and many others who are not aware of the options available are trapped or forced to buy the Insurance with the Dealer. What is the need for the Dealer to be a channel partner in Insurance instead he could be a facilitator between the Insurance Company and the Customer.
They fear monger the Customers about claims settlement and snatch the business from the Individual Agents, whose positions are pathetic when a Customer asks for Cashless settlement.
Present system is cutting to companies,giving five star facility to few members,on shoulder of humble members by rejecting claims of 90 percent to ffeed green grass management and agents
If they really wants to health assistance to Indian citizen as per vision of PM Bima sbke liye then first’ of all they should remove clause permanent exclusion disease para from terms and conditions