IRDAI Proposes Tighter Disclosure Norms to Curb Mis-Selling in Insurance

The Insurance Regulatory and Development Authority of India (IRDAI) has proposed stricter transparency norms for insurance intermediaries, requiring them to disclose commission earnings to the public and the regulator. This move is part of a broader effort to improve disclosure standards and curb rampant mis-selling in the insurance sector.

Insurance intermediaries include agents, brokers, corporate agents, banks, web aggregators, and third-party administrators. The intense commission-driven competition in this segment has often led to high policy costs, particularly in the life insurance sector. By mandating public disclosure of commissions, the regulator aims to give policyholders and other stakeholders a clearer picture of how intermediaries earn, potentially reducing unethical sales practices.

Sources indicate that IRDAI is also considering a cap on commissions to bring more order to the industry. The proposed measures are expected to enhance transparency and protect consumer interests, aligning with the regulatory objective of fair and honest insurance distribution.