IRDAI extends comment deadline on distribution reform paper to 31 October
Why in the news
The Insurance Regulatory and Development Authority of India (IRDAI) extended the last date for feedback on its insurance distribution reform paper from 25 October to 31 October 2026. It announced the change in a press release on 24 October, saying it wanted wider participation.
Key facts
- Paper: ‘Recalibrating Economics of Insurance Distribution’, a public consultation paper dated 23 September 2026.
- Response so far: over 650 comments received.
- Insurance Brokers Association of India (IBAI) had asked for the deadline to be moved to the end of December 2026.
- Commission: caps would differ by product and channel, with separate limits for individual and corporate distributors.
- New structure: three distributor categories – Insurance Distribution Entities, Insurance Distribution Persons and Market Infrastructure Institutions (such as Bima Sugam).
- Anti-mis-selling: suitability checks, linking each sale to the seller, public reporting of mis-selling and commission claw-backs.
Proposed Expense of Management (EoM) limits
| Insurer type | Base | Proposed limit |
|---|---|---|
| Life | Gross Direct Premium Income (GDPI) | 15% within two years; 12.5% within five years |
| General | From Gross Written Premium (GWP) to domestic GDPI | From 30% of GWP to 20% of GDPI within five years |
About the reform
The paper seeks to widen insurance coverage, make policies cheaper, cut distribution costs and improve transparency. It is linked to the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025. IRDAI Chairman Ajay Seth asked stakeholders to explain how their suggestions would benefit policyholders.
Exam angle
- EoM limits cap an insurer’s management expenses as a share of premium.
- Remember the new deadline: 31 October 2026.
- Bima Sugam is named as a digital market infrastructure institution.