World · India Bureau
RBI set to weigh in on Irdai's insurance commission restructuring plan
The Reserve Bank of India will submit formal comments on the Insurance Regulatory and Development Authority's proposed overhaul of commission structures for insurance products. The draft framework seeks to impose product-level caps and tighten management expense limits.
LSN India ·
Reserve Bank Governor Sanjay Malhotra has signalled that the central bank will present its views on the Insurance Regulatory and Development Authority of India's (Irdai's) proposed commission framework revision. The move comes as regulators seek to reshape how insurers compensate intermediaries and manage operating expenses.
Irdai's draft framework proposes introducing product-level commission caps while simultaneously lowering the threshold for management expense ratios. The proposals aim to balance industry competitiveness with consumer protection and operational efficiency across the insurance sector.
The RBI's formal submission will add a critical perspective from India's banking regulator, which maintains oversight of insurance distribution through banks and other regulated entities. The central bank's input is expected to focus on implications for financial stability and market conduct standards.
The timeline for finalizing the commission framework remains unclear, though Irdai has invited stakeholder feedback on the draft proposals. Insurance companies, brokers, and other market participants are expected to submit their own comments as the regulator works toward a revised regulatory structure.