IRDAI moots changes to distribution, payout norms

Insurance regulator IRDAI has proposed an overhaul of norms governing insurance distribution, commissions and expenses, a development that turned the spotlight on shares of insurers and intermediaries on Thursday, particularly PB Fintech and Turtlemint Fintech.

Opening consultation paper ‘Recalibrating economics of insurance distribution’ for public comments, the Insurance Regulatory and Development Authority of India (IRDAI) on Wednesday said it is outlining a comprehensive framework of reforms around insurance distribution, structure, market conduct, transparency and leveraging digital infrastructure, besides the expenses and commissions.

On the commission framework, IRDAI said instead of a uniform approach, commission limits would take into account the segment, line of business, distribution channel, product complexity and the effort involved in selling and servicing the product. A system of rewards, over and above normal commission limits, for sale of products in under-served areas is proposed.