Insurance Brokers Seek Relief From IRDAI Reforms as Proposed Commission Caps Raise Job Concerns

Insurance brokers seeking government intervention against the Insurance Regulatory and Development Authority of India’s (IRDAI) proposed changes to distribution norms have been advised to approach the regulator directly, indicating that the government is leaving the matter to the insurance watchdog.

The brokers met Finance Minister Nirmala Sitharaman, Prime Minister’s Office representatives and Department of Financial Services officials on November 10, raising concerns over proposed commission restrictions and tighter expense management limits. However, they were directed to present their objections to IRDAI chairman Ajay Seth.

Earlier, India’s insurance distribution industry operated under a framework that provided intermediaries greater flexibility in earning commissions and managing distribution costs. However, IRDAI’s September 2026 consultation paper proposed product- and channel-specific commission caps and changes to insurers’ overall Expenses of Management (EoM) limits to improve transparency, control costs and curb mis-selling.

The proposals have since triggered considerable resistance among brokers, who argue that lower commissions could affect revenues, business sustainability and customer servicing. The uncertainty is also affecting employment prospects, with some companies reconsidering recruitment and preparing for potential workforce reductions.

IRDAI has maintained that stakeholder feedback will be considered before finalising the framework, with phased implementation also under consideration. The final regulations and their impact on the industry remain uncertain.