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IRDAI Chairman Ajay Seth: Insurance Costs Must Fall, Policyholders Deserve Efficiency
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CNBC TV18•30-09-2026, 20:19
IRDAI Chairman Ajay Seth: Insurance Costs Must Fall, Policyholders Deserve Efficiency
- •IRDAI Chairman Ajay Seth explains the proposed overhaul of insurance distribution economics, emphasizing the need for a more efficient sector and lower costs.
- •Seth highlights a sharp increase in commissions to 38% from 8% and high sector profits (over 44% after taxes) as reasons for cost reduction.
- •The consultation paper aims to improve productivity across the entire insurance ecosystem, including insurers, distributors, and regulators, not just target distributors.
- •Seth stresses the importance of greater competition, transparency, and lower costs of doing business, especially in health insurance.
- •The IRDAI paper proposes changes to commissions, remuneration, distribution arrangements, and addresses dark patterns, with feedback invited until October 25.
Key Questions Answered
IRDAI Chairman Ajay Seth explained that the proposed consultation paper, titled 'Recalibrating Economics of Insurance Distribution', aims to make the insurance sector far more efficient, address sharp cost increases over the past seven years, and ensure business economics work better for policyholders.
Seth pointed out that commissions have surged sharply to 38% from 8% a few years ago, and stated that post-tax profits exceeding 44% are too high for a financial services sector, making the case for lowering costs for customers.
Stakeholders have been invited to submit their feedback on the insurance distribution consultation paper until October 25, with IRDAI Chairman Ajay Seth scheduled to meet insurance CEOs in Delhi on October 5.
