Positive impactSector
LIAFI writes to IRDAI, seeks 35% first-year commission and 7.5% renewals for long-term life policies
Economic Times 1 hr ago·15 Oct 2026, 2:25 pm
The Life Insurance Agents' Forum of India (LIAFI) has written to the Insurance Regulatory and Development Authority of India (IRDAI) requesting a significant increase in commission rates for long-term life insurance policies. The body is specifically asking for a 35% commission on the first year and 7.5% on renewals for policies where the premium-paying term is 15 years or more. Additionally, they have requested a ban on clawback clauses, which are penalties deducted from agents' payouts, and have asked for equal scrutiny of all distribution channels, including banks.
This move is significant for the insurance sector as it directly impacts the profitability of insurers and the earnings of agents. Higher commission rates could increase the cost of acquiring new business for insurance companies. If IRDAI accepts these demands, it could lead to a shift in how insurance products are sold and priced, potentially affecting the overall competitiveness of the sector. Investors should watch for the regulator's response to this proposal and any subsequent changes in industry practices.
Key takeaways
- Category: Sector.
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