IRDAI Plans to Shift Distributor Commissions from Upfront to Over-Policy-Life to Kill Mis-Selling

IRDAI is preparing a draft framework — expected within four to six weeks per sources cited by Business Recorder (3 Jul 2026) — that would replace large upfront distributor commissions, which can reach 40% of premiums on some life and health products, with payouts spread across the policy lifetime, and would also link commissions to effort metrics such as advisory service, paperwork support, and claims handling. Builders running B2B2C distribution stacks, bancassurance APIs, or POSP-enablement platforms need to model how trail-based commissions change their revenue recognition, partner incentives, and product-mix strategy before the consultation paper drops by July end.

Source: Business Recorder ↗