IRDAI distribution reform draws sharp industry pushback

Insurance brokers and LIC agents have sharply criticised the Insurance Regulatory and Development Authority of India (IRDAI)'s proposed overhaul of insurance distribution, warning of job losses and reduced rural reach. The Insurance Brokers Association of India (IBAI) said the paper’s central instrument, more than 30 separate commission caps by product and channel, together with a one-third cut in insurers’ overall expense limit, will harm policyholders, as per Asia Insurance Review on 1 October. IBAI noted that the paper does not distinguish between insurance sold to a customer and insurance chosen by a customer through their own advisor, and that the evidence does not support the remedy. The Life Insurance Agents’ Federation of India (LIAFI) urged the regulator to ensure agency remains a viable profession and requested grandfathering provisions for existing business, The Hindu reported on 30 September.

The Hindustan Times, in an opinion piece on 29 September, framed the proposals as vindication for consumer advocates, arguing that high distribution costs have gouged policyholder benefits and that the glide path to cut expenses is too long. The Economic Times on 30 September reported legal experts calling the framework a return to prescriptive regulation. IBAI said it will file its detailed response by 25 October 2026, as per The Hindu.

Update, 1 October 2026: Asia Insurance Review on 1 October adds that IBAI has detailed its concerns in a statement, arguing that the paper’s own data does not support the proposed remedies and that the caps will reduce rural reach. IBAI confirmed it will file its detailed response by 25 October 2026.