Insurance Regulator Plans Major Reform to Reduce Insurance Mis-selling

India's insurance sector could soon witness one of its biggest consumer-focused reforms in recent years. Reports indicate that the insurance regulator is preparing a new commission framework aimed at reducing insurance mis-selling and improving transparency for policyholders.

Under the proposed framework, commissions paid to insurance distributors may no longer be heavily front-loaded. Instead, payments could be spread over the life of the policy, encouraging distributors to focus on long-term customer service rather than immediate sales. The proposal may also introduce stronger disclosure requirements and commission caps based on product type.

For consumers, the proposed changes could lead to better product recommendations, greater transparency, and reduced pressure from aggressive sales practices. Industry experts believe the reforms may improve consumer confidence while encouraging more ethical distribution practices across the insurance sector.