General insurers and standalone health · consultation paper, 23 September 2026
Most of the commentary on IRDAI’s distribution reform paper has been about life commission rates. For a general or standalone health insurer, two other things bite harder — and one of them is being missed almost everywhere.
Comments close 25 October 2026.
The limit is currently computed on Gross Written Premium. It moves to domestic Gross Direct Premium Income. GWP includes reinsurance accepted; domestic GDPI does not, and it excludes business written outside India. So the denominator shrinks while the percentage falls.
The effective cut is not ten points. It is ten points plus whatever share of your gross written premium falls outside domestic GDPI — and that share differs company by company.
Two insurers with identical expense ratios today land in different places. For a company with meaningful inward reinsurance the gap is material, and it is answerable only from its own numbers. That calculation is the first thing worth doing, and it can be done this week.
| Line of business | Distribution entity | Agent |
|---|---|---|
| Individual health — first year | 15% | 20% |
| Individual health — renewal or porting | 5% | 10% |
| Motor third party, new vehicle | Nil | Nil |
| Motor own damage | 5% | 5% |
| Personal accident | 5% | 10% |
| Loan-linked or credit insurance | 2% first year | 2.5% first year, 1% renewal |
These rates come from published reporting of Boxes 4A and 4B of Part 1 of the consultation paper, not from the paper itself. Verify before quoting any of them externally.
New-vehicle third-party cover would pay nothing, to either payee class — on the largest line in the market by policy count. Motor own damage keeps 5%, so the same customer in the same transaction generates commission on one half of the cover and none on the other.
Renewal and porting carry a third to a half of the first-year rate. The trail follows the customer rather than only the sale — the same persistency logic being applied to life, in a different form.
The agent premium over the entity rate is 1.33× on health, 1.0× on motor own damage, 2× on personal accident, and nil against nil on motor third party. Individual life runs at exactly 1.25×. Do not generalise the life rule across a general book.
Motor dealer and OEM support, co-marketing, infrastructure and training subsidies all move inside the capped number. Set against a nil cap on motor third party, that combination is the sharpest edge in the paper for a motor-heavy book.
The binding constraint is no longer a single expense ratio checked at year end. It is a narrowing envelope, measured on a base that has changed definition, with every form of distributor reward inside it, audited externally and published.
That makes three things operational rather than policy questions. Every payment to a distributor — including the non-cash ones — has to be captured in one place and attributed to the premium that earned it. The envelope has to be visible in-year, not reconstructed after it. And the calculation has to be reproducible to an auditor line by line, which means lineage rather than a spreadsheet trail.
Most general insurers run commission in the policy system, schemes and contests in distribution, co-marketing in finance, and the EoM return in actuarial. Under a published cost audit, those four have to reconcile to one number.
The four-week readiness review establishes whether a scheme change can be modelled and deployed at your scale today. One channel, your own payout data, at our cost — and the output is close to what a credible consultation response needs anyway.