Consumer VOICE Submits Recommendations on Proposed Insurance Commission Caps
Consumer VOICE has submitted detailed recommendations to the Insurance Regulatory and Development Authority of India (IRDAI) regarding the proposed framework on insurance commission caps and distribution reforms.
While appreciating IRDAI’s commitment towards the vision of “Insurance for All by 2047”, Consumer VOICE has expressed concern that broad-based commission caps may unintentionally impact policyholders, particularly first-time buyers, low-income households, and consumers in Tier 2, Tier 3, and rural areas.
The submission highlights that insurance in India continues to be largely advice-driven, where agents and intermediaries play a crucial role in helping consumers understand products, complete documentation, and receive claim support. A sharp reduction in commissions may discourage distribution in underserved markets and reduce access to financial guidance for vulnerable consumers.
How capping insurance commissions could hurt the very consumers it aims to protect
The recommendations submitted by Consumer VOICE include:
- Allowing the existing Expenses of Management (EoM) framework to mature before introducing additional caps
- Addressing mis-selling through stronger conduct regulations and suitability requirements rather than blanket commission restrictions
- Conducting a structured market study to identify the actual drivers of rising distribution costs
The representation also draws attention to international experiences where excessive restrictions on commissions resulted in an “advice gap”, limiting consumer access to financial advisory support.
Consumer VOICE believes that strengthening consumer protection should go hand-in-hand with maintaining accessibility, affordability, and distribution reach, especially in smaller towns and rural India.
The organisation remains committed to supporting balanced policy reforms that promote transparency, responsible distribution practices, and wider insurance inclusion across the country.