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IRDAI's Commission Cap Proposal Rocks Insurance Sector, Sparks Selloff
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Moneycontrol•25-09-2026, 12:06
IRDAI's Commission Cap Proposal Rocks Insurance Sector, Sparks Selloff
- •IRDAI proposes capping insurance commissions, which can reach 80-90% of premium value, and tackling compulsory insurance sales with loans.
- •The regulator also aims to curb "dark patterns" used by online sellers to gather personal data before disclosing policy details.
- •The proposal led to a sharp selloff in financial stocks, impacting insurers, banks, and NBFCs reliant on insurance commissions.
- •Industry stakeholders have until October 25 to submit their views on the proposed overhaul.
- •The discussion explores balancing mis-selling prevention with industry stability and rebuilding consumer trust.
Key Questions Answered
The regulator is targeting commission rates that currently run as high as 80-90% of premium value in certain policies, alongside addressing issues like the compulsory sale of insurance with loans and online dark patterns.
The proposal triggered a sharp selloff in financial stocks on Thursday, impacting insurers, banks, and non-banking financial companies that earn substantial income from insurance commissions and fees.
Industry stakeholders have been given until October 25 to submit their views on the proposed framework.
