A new survey has revealed that seven in 10 insurance buyers in India back the IRDAI Consultation paper on commission caps and eight in 10 seek upfront disclosure of the commissions paid.
The new survey by LocalCircles supported limiting commissions paid to insurance agents and distributors, while 82% want insurers to disclose the commission payable to the distributor before a policy is purchased.
The survey released on 25 September 2026 was published just days after the India insurance regulator Insurance Regulatory and Development Authority of India (IRDAI) released a consultation paper proposing changes to insurance distribution, including product- and channel-specific commission limits, lower Expenses of Management (EoM) limits for insurers and measures to address mis-selling.
The regulator has invited comments from stakeholders and the public until 25 October 2026.
IRDAI's consultation paper proposes that commission limits should vary depending on the insurance segment, line of business, distribution channel, product complexity and the effort involved in selling and servicing a product. For individual life products, the proposed commission limits vary according to the premium payment term and distribution channel.
The consultation paper also proposes changes to insurers' EoM limits. Life insurers would be required to bring company-level EoM down to 15% of gross direct premium income within two years and 12.5% within five years, while general insurers' EoM limit would be reduced from 30% to 20% over five years.
On transparency and mis-selling, IRDAI has proposed disclosure of commission policies and structures by insurers and large distributors, along with measures covering remuneration, seller-level traceability and clawback of commissions in cases of mis-selling.
However, the proposed framework does not provide for commission disclosure to individual buyers at the policy level for all retail products. The consultation paper proposes such disclosure for specified commercial policies, according to the LocalCircles release.
The LocalCircles survey received more than 94,000 responses from insurance buyers across 322 districts. The survey found that 86% of respondents said they had not been informed about the commission their agent or distributor would receive from the insurer before buying a policy.
Only 3% said they had been fully informed about the commission, while 8% said they were partially informed and 3% could not recall. This question received 23,690 responses.
On commission disclosure, 82% of respondents said insurers should be required to disclose the commission being paid to agents or distributors before the purchase of any insurance policy.
Another 6% supported disclosure for life and health policies, while 10% did not support such disclosure and 2% could not say. The question received 23,003 responses.
The survey also examined consumers' experience with policy recommendations. Half of the respondents said insurance agents or distributors had frequently recommended a policy without clearly explaining why it was suitable for them. Another 24% said this had happened sometimes.