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IBAI Warns IRDAI Draft Threatens 10 Lakh Jobs, Distribution Reach
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Moneycontrol•04-10-2026, 10:40
IBAI Warns IRDAI Draft Threatens 10 Lakh Jobs, Distribution Reach
- •The Insurance Brokers Association of India (IBAI) has raised concerns over IRDAI's proposed overhaul of insurance distribution, warning of job losses and reduced distribution reach.
- •IBAI opposes the consultation paper's approach of introducing over 30 commission caps and a one-third reduction in insurers' overall expense limits, fearing it could jeopardize 10 lakh livelihoods.
- •The association highlighted that insurance distribution supports over 83 lakh professionals, with brokers sponsoring 14.81 lakh point-of-sale persons, many in Tier-2 and Tier-3 cities.
- •IBAI argues that a one-third reduction in expense limits could lead to cuts in sales, servicing, and claims staff, rather than being absorbed by efficiency gains.
- •IBAI has urged the government and regulator to conduct an impact assessment before implementing changes and to allow the existing 2023 Expense of Management framework to continue until its 2028 review.
Key Questions Answered
The Insurance Brokers Association of India (IBAI) warned that IRDAI's proposed tighter commission caps and a one-third reduction in expense limits could jeopardize over 10 lakh livelihoods, hurt distribution reach, and reduce competition in the sector.
IBAI supports provisions aimed at curbing mis-selling, such as prohibiting the compulsory bundling of insurance with loans, enforcing strict suitability obligations, and implementing transparency measures.
IBAI has asked authorities not to notify the commission and expense-limit changes without a published impact assessment and urged that the existing 2023 Expense of Management framework remain active until its scheduled 2028 review.
