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Informist, Tuesday, Oct. 27, 2026

 

MUMBAI – Life insurers need more time to comply with the Insurance Regulatory and Development Authority of India's proposed distribution norms, heads of life insurance companies said Tuesday at the Business Standard BFSI Summit. The proposed reforms could reduce costs and improve customer outcomes, but implementing them must account for differences in insurance companies' size, business models, and distribution networks, they said.

 

Most executives supported the broad objectives of the IRDAI draft norms, which they said came as little surprise, but called for changes to the proposed implementation timelines and commission structures.

 

On Sept. 23, IRDAI proposed sweeping changes to life insurance expenses, commissions, and market conduct. It proposed commission limits for insurance distributors based on the complexity of sales and service, rather than a uniform fee. IRDAI has extended the deadline for stakeholder feedback to Oct. 31, after receiving more than 650 submissions.  

 

"All of us are not at the same place. The starting point for everybody is not the same," Aditya Birla Sun Life Insurance Co. Managing Director and Chief Executive Officer Kamlesh Rao said. "And therefore, maybe we got to look at different people with different lengths. Timeframes will be different. And all of us, with time, should hopefully reach the same destination, but the timeframe is important."

 

The consultation paper seeks to cap management expenses for life insurers at 15% of gross direct premium income within two years and 12.5% within five years. Management expenses for general insurers will be capped at 25% of gross direct premium income in two years and 20% in five years. Currently, the management expense cap for general insurers is 30% of gross written premium. IRDA said in its consultation paper that the first year in the glide path would be 2027-28 (Apr-Mar). The new norms are proposed to be implemented from Apr. 1.

 

IndiaFirst Life Insurance MD and CEO Rushabh Gandhi called for a longer glide path for the proposed cost limits. "One thing that can change is the glide path to 15%. A slightly longer glide path will support industry," he said. He also advocated reviewing commissions across product categories. 

 

Meanwhile, Kotak Mahindra Life Insurance Co. MD and CEO Mahesh Balasubramanian said there should be an orderly transition rather than negotiations on individual numbers. "... the end customer outcome is clear. And all of us are pretty happy with the end customer outcome in terms of providing better value proposition for customers," he said. "But there is going to be a transition period. And we all have to make sure that as stakeholders in this industry, the transition period is smooth. So that we are able to manage the entire transition."

 

Most insurers said the conversation around grievances and mis-selling was somewhat overhyped, adding that insurers have strengthened their checks and balances over the years. "I think we should understand this in a more nuanced way. Not every unhappy customer is a mis-sold customer," Balasubramanian said.

 

"There are customers who probably are wanting to change the contract or wanting to say, okay, I don't think I want to continue to pay whatever. So, there is a rethink and a re-talk. I think one should understand the nuances and segregate these two," he added. End

 

Reported by Pratiksha

Edited by Saji George Titus

 

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