Insurers must compete on price, not commissions: Irdai chief

The Insurance Regulatory and Development Authority (Irdai) is moving to reshape how insurers compete in India's market, with Chairman Ajay Seth emphasizing that price should be the primary competitive lever rather than distributor commissions.

Seth indicated that the regulator's proposed distribution reforms are not yet finalized, with the authority committed to gathering feedback from industry stakeholders before issuing draft regulations. The shift reflects Irdai's broader intent to create a more transparent and consumer-focused insurance marketplace.

The reform push comes as the Indian insurance sector faces mounting pressure to improve pricing efficiency and reduce hidden costs associated with commission-heavy distribution models. By encouraging price-based competition, regulators aim to make insurance products more accessible and affordable for Indian consumers.

The proposed changes are expected to have significant implications for the insurance distribution ecosystem, including agents, brokers, and other intermediaries. Irdai's consultative approach signals the regulator's recognition that meaningful reform requires buy-in from industry participants who will be affected by the new framework.

Stakeholders have until the completion of the feedback period to provide input on how the distribution reforms should be structured. The final regulations will address commission structures, distributor incentives, and related compliance requirements that currently govern the Indian insurance market.