Neutral impactSector
Did your agent mis-sell insurance? IRDAI proposes clawing back their commission under new reforms
Mint 53 min ago·24 Sept 2026, 6:58 am
The Insurance Regulatory and Development Authority of India (IRDAI) has proposed a significant regulatory change aimed at curbing mis-selling in the insurance sector. The regulator suggests introducing a 'commission claw-back' mechanism. This would allow insurers to reclaim the commission paid to an agent if a policy is later found to have been mis-sold. Additionally, the proposal seeks to create a permanent link between salespersons and the policies they sell, making their performance records publicly available to consumers.
This move is a direct response to the long-standing issue of agents prioritising sales targets over the genuine needs of policyholders. By holding agents financially accountable for their sales, the new rules aim to incentivise better conduct and transparency. For investors, this development is a positive signal that the regulator is actively working to clean up the sector and build greater trust among consumers.
Investors should monitor the finalisation of these rules and how quickly insurers implement the proposed changes. While the immediate impact on company earnings may be limited, the long-term effect could be a more sustainable and stable insurance market. Watch for updates on the final guidelines and any subsequent circulars from IRDAI.
Excerpt from Mint
IRDAI has proposed commission claw-back when an insurance policy is found to have been mis-sold. The proposal also seeks to link salespersons to policies they sell and make mis-selling records publicly available, giving consumers more information before buying insurance. Buying an insurance policy often involves…Read the original at Mint
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