The Insurance Regulatory and Development Authority of India (IRDAI) is planning to introduce stricter transparency rules for insurance intermediaries.
The move is aimed at reducing the problem of mis-selling insurance policies and improving accountability in the sector.
For the first time, the regulator has proposed that insurance intermediaries disclose detailed information about their earnings, profits, related-party transactions, and dividend payments.
The proposal is part of the draft IRDAI (Insurance Intermediaries) (Amendment) Regulations, 2026.
Which Insurance Companies and Intermediaries Will Be Affected?
Under the proposed rules, insurance brokers, corporate agents, insurance marketing firms, and web aggregators earning more than ₹10 crore in commission income in a financial year will have to make annual disclosures.
These entities will be required to share details such as:
Total commission income earned
Related-party transactions
Profits generated
Dividends distributed
The information will need to be submitted to IRDAI and also published on the company’s website.
According to the regulator, these disclosures will help customers and authorities better understand how intermediaries earn money and conduct business.
Why Is IRDAI Focusing on Transparency?
The insurance sector has witnessed a sharp rise in commission payouts in recent years.
During FY25, life insurance companies paid around ₹60,800 crore in commissions, while non-life insurers paid approximately ₹47,266 crore.
Notably, commission payments grew faster than premium collections in both segments.
Because of this trend, many industry experts expected IRDAI to introduce a new commission structure linked to actual effort and performance.
However, the current draft does not propose any major changes to how commissions are calculated.
New System to Track Who Sold Each Policy
One of the most important proposals in the draft regulations is the introduction of better tracking for policy sales.
IRDAI has suggested that every branch of a corporate agent must appoint at least one specified person responsible for monitoring sales activities at that location.
In addition, every insurance policy sold through an intermediary will be linked to the individual who handled the sale.
This could include:
Insurance salespersons
Point of Sales Persons (POSPs)
Authorised verifiers
Broker-qualified persons
Other authorised representatives
This system will make it easier to identify who was responsible if any complaint or mis-selling issue arises later.
Penalties Could Increase Significantly
IRDAI has also proposed stricter penalties for violations.
The regulator wants to increase the penalty for acts of omission by the principal officer of a corporate agent from the current ₹1 crore to ₹10 crore.
The higher penalty is expected to encourage better compliance and improve customer protection.
Easier Compliance Alongside Stricter Oversight
While the proposed regulations introduce tighter transparency and accountability measures, they also aim to make business operations easier for insurance intermediaries.
The draft includes steps to simplify regulatory procedures, reduce compliance costs, and provide greater certainty for businesses operating in the insurance sector.
According to IRDAI, the overall goal is to create a more transparent, accountable, and customer-friendly insurance market while supporting smooth business operations for intermediaries.
