IRDAI open to extending feedback window on insurance distribution reforms

New Delhi: The Insurance Regulatory and Development Authority of India (IRDAI) is considering requests from industry participants to extend the deadline for comments on its proposed insurance distribution reforms, according to a report.

IANS report-- citing news sources -- reported that the regulator has not yet taken a final decision but is open to reviewing stakeholder representations and could grant extensions in select cases.

IRDAI is currently evaluating feedback received on its consultation paper and is keen to ensure broad participation before finalising the framework, it added.

Stakeholders are currently required to submit comments by October 25, while the proposed reforms are slated to come into force from January 1, 2027.

The consultation paper released in September proposes sweeping changes to the way insurance products are sold and distributed in India.

Key measures include product- and channel-specific limits on distributor commissions, a phased tightening of expense management norms for insurers, a simplified three-layer distribution architecture and provisions to recover commissions in instances of mis-selling.

However, the proposals sparked sharp reactions across the insurance distribution industry, particularly among brokers and digital intermediaries.

Shares of listed insurance distributors came under heavy selling pressure after the paper was released with PB Fintech -- the parent company of Policybazaar -- witnessing a steep decline.

In addition, industry groups have stepped up engagement with the regulator in recent weeks.

The Insurance Brokers Association of India (IBAI) met senior IRDAI officials last week and sought additional time to review and respond to the proposals, according to the report.

IRDAI is seeking to gather views from all segments of the insurance ecosystem before taking a final call, the news report said adding that the regulator remains focused on implementing reforms within the proposed timeline and is also mindful of concerns raised by distributors, insurers and other market participants.

The regulator's willingness to consider changes was signalled by IRDAI Chairman Ajay Seth earlier this month.

Seth said the authority was open to modifying aspects of the framework based on stakeholder feedback and was examining suggestions, including the possibility of phasing in commission-related reforms.