# IRDAI proposes motor insurance overhaul and commission caps

2026-09-24T03:51:46+00:00 | Governance | Indian Opinion Desk

Corroboration: 2 independent outlets

The Insurance Regulatory and Development Authority of India has proposed sweeping changes to motor insurance distribution and commission structures, with a consultation paper released on Wednesday seeking public feedback until October 2026. The proposals introduce a digital purchase option for new vehicle insurance through Bima Sugam and other platforms, require dealers to display QR codes linking to these platforms, and ban denial of cashless repairs based on where the policy was bought. IRDAI data shows motor insurance premiums grew 34% between FY23 and FY25 while commissions surged 259%, with average commission rates at 24% and reaching 50% in some cases. OEM brokers and MISPs generated Rs 29,000 crore in premiums and received Rs 7,050 crore in commissions in FY25. Proposed caps would cut commissions on mandatory third-party motor insurance to nil for distribution entities and 2.5% for agents. Industry analysts estimate the changes could reduce distributor earnings by 10-12% for every 10% cut in commission rates, with banks such as IndusInd and IDFC First carrying the highest bancassurance earnings exposure.

## Indian Opinion Analysis

Livemint presents IRDAI's proposals as a market reform focused on consumer choice, emphasising digital platforms and cashless repair protections. ET BFSI's three pieces frame the same proposals primarily as a commission clampdown, detailing broker impact estimates from Jefferies and bank exposure rankings. The pro-reform framing underplays the severity of commission cuts for distributors, while the critical framing foregrounds earnings risk and sectoral disruption without examining whether high commissions inflated premiums for consumers. The balanced reading: IRDAI is targeting a genuine mis-selling problem and high distribution costs. The impact on insurers and distributors will depend on final caps, the regulator has set a 12-month window for stakeholder submissions ending October 2025.

## Coverage

- livemint.com (neutral report) <https://www.livemint.com/money/personal-finance/irdai-proposes-new-motor-insurance-rules-what-could-change-for-new-car-buyers-11790218819778.html>
  Leads with consumer-choice angle, frames as market reform
- bfsi.economictimes.indiatimes.com (neutral report) <https://bfsi.economictimes.indiatimes.com/articles/how-irdai-wants-to-curb-insurance-commissions-crack-down-on-mis-selling/134457378>
  Leads with bank earnings exposure analysis from Jefferies report
- bfsi.economictimes.indiatimes.com (neutral report) <https://bfsi.economictimes.indiatimes.com/articles/irdais-proposed-commission-overhaul-may-halve-health-term-payouts-pb-fintech-turtlemint-face-earnings-risk/134455407>
  Leads with bank earnings exposure analysis from Jefferies report
- bfsi.economictimes.indiatimes.com (neutral report) <https://bfsi.economictimes.indiatimes.com/articles/irdai-commission-curbs-indusind-idfc-first-most-exposed-icici-psbs-less-at-risk-says-jefferies/134454594>
  Leads with bank earnings exposure analysis from Jefferies report

Tags: Bima Sugam, IRDAI, motor insurance, Vahan
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