Reducing the cost of intermediation in the financial sector is an important policy goal on India’s journey to Viksit Bharat, IRDAI Chairman Ajay Seth said, signalling that the regulator’s proposed overhaul of insurance distribution is part of a broader government push to make financial services more cost-efficient.
Seth was responding to a question on whether the sweeping proposals in IRDAI’s consultation paper — which have rattled the insurance industry — are aligned with the government’s thinking and whether the reforms can be pushed through and sustained beyond his tenure.
In an exclusive in-depth interview with Moneycontrol, Seth said, the proposals are anchored in the objectives of the Sabka Bima Sabki Raksha Act, 2025, which seeks to accelerate insurance growth, strengthen policyholder protection, improve ease of doing business and reinforce regulatory oversight.
“Policyholder protection has always been central to IRDAI's mandate,” he said, adding that the regulator’s understanding of what effective protection requires has evolved as the market has grown larger and more complex.
The proposed reset of insurance commissions and distribution incentives, therefore, is not merely about lowering payouts to intermediaries. The broader objective is to reduce the cost of getting insurance to consumers while improving the quality of distribution and strengthening accountability.