India's leading insurers have broadly welcomed the Insurance Regulatory and Development Authority of India's (IRDAI) proposed overhaul of insurance distribution rules but have urged the regulator to adopt a phased implementation approach instead of a uniform approach. According to CNBC TV18, industry executives said the direction of the reforms is positive, but the pace and structure will be critical for insurers, distributors and customers. Amit Jhingran, MD & CEO of SBI Life Insurance, Parag Raja, MD & CEO of Bharti Life Insurance, and Parthanil Ghosh, MD & CEO of HDFC Ergo all expressed support for the consultation paper's potential to improve transparency and affordability while creating a more customer-centric distribution model.
Author and financial educator Monika Halan has raised concerns about the implementation timeline of the Insurance Regulatory and Development Authority of India's (IRDAI) latest regulatory overhaul. Speaking exclusively to ANI, Halan emphasized that the insurance industry will not implement necessary changes unless there is a hard deadline that is closed. She highlighted that the proposed transition period provides insurers with too much leeway to delay critical consumer protection measures, stating "It's a long road ahead. There is nothing going to happen. In any case, the glide path is 2 years and 5 years. I think it is too long." Halan argued that if the regulator understands mis-selling and bad sales are happening, the industry should be given 6 months, not 5 years, because the industry will not do anything unless there's a hard deadline which is closed.
Halan described the insurance industry as very well-funded and entrenched, making reform implementation particularly challenging. She noted that the resistance from entrenched market players is already underway to dilute the proposed changes, stating "It's a very long road ahead because it's a very well-funded entrenched industry which is already lobbying with the Ministry of Finance with other power centres in Delhi to roll this back. It's a hard fight." Halan expressed hope that the powers understand how important it is for the financialization of India and how important it is that a regulated product in India is not open to such rampant cheating.
The concerns come as the Insurance Regulatory and Development Authority of India (IRDAI) has outlined a prolonged implementation timeline for its latest regulatory overhaul. The IRDAI consultation paper proposes hard commission caps, tighter expense of management (EOM) limits, greater transparency and accountability in insurance distribution, replacing the flexibility introduced in 2023 after the regulator concluded that the earlier framework had not delivered adequate cost discipline. SBI Life Insurance's Amit Jhingran said the regulator's decision to reintroduce commission caps was driven by the industry's experience under the 2023 framework, noting that "The industry did not respond very positively to that," making the return of commission caps necessary. Bharti Life Insurance's Parag Raja stressed that the proposals are still under consultation, stating "This is a consultation paper," adding that the regulator is genuinely interested in listening to all stakeholders before taking a final decision.
Industry executives acknowledge significant operational changes will be required if the proposed reforms are implemented. HDFC Ergo's Parthanil Ghosh estimated that companies may have to rework 30-40% of their processes, including distribution systems, technology platforms and consent management, to comply with the new rules. Ghosh also argued that the regulator should review the proposed EOM limits after five years to assess whether they have improved insurance penetration, customer outcomes and grievance redressal. The executives agreed that the regulator's broader objective of making insurance more affordable and accessible is aligned with the industry's long-term goals, noting that expanding insurance coverage, particularly in rural India, will require continued investment in technology and physical distribution networks.
