60 terms you meet in Indian general insurance and in IRDAI’s 2026 distribution paper, in plain English, with what each one means if you sell or service insurance.
Updated 22 Oct 2026. Items marked proposed come from the 2026 consultation paper and are not final rules.
Selling insurance through banks and NBFCs, usually as corporate agents, to their own customers.
Why it matters for distributors. The paper would ban compulsory bundling with loans and bar volume-linked incentives for bank and NBFC staff proposed. IRDAI identifies bancassurance as one of the costliest channels.
Read more: Bancassurance and loan bundling
An insurance marketplace being built by the industry. The paper treats it as the first market infrastructure institution (MII) for insurance.
Why it matters for distributors. Motor policies would move toward MIIs such as Bima Sugam, which could change how dealers and PoSPs sell motor cover proposed.
Read more: PoSP, Bima Sugam and motor
Since 2023-24, each insurer sets commission through a policy approved by its own board, within the overall EoM limit, instead of fixed IRDAI limits per product.
Why it matters for distributors. This is the regime the 2026 paper proposes to replace with statutory caps.
Read more: What changes
A motor claim where the garage is paid directly by the insurer, so the customer does not pay upfront (beyond any deductible).
Why it matters for distributors. Dealers could not refuse cashless repair because a policy was bought elsewhere, as reported proposed.
Read more: PoSP, Bima Sugam and motor
Recovering commission already paid to a distributor.
Why it matters for distributors. The paper proposes clawback of commission on proven mis-selling proposed.
Read more: Conduct and accountability
Two meanings. In commercial lines, several insurers share one risk in agreed proportions, with a lead insurer. In health, it is the share of each claim the policyholder pays (also called co-payment).
Why it matters for distributors. Large property and engineering placements are often co-insured, which adds work for the placing broker.
Read more: Broker guide
The incurred claims ratio plus the expense ratio (including commission). Below 100% means the insurer makes an underwriting profit.
Why it matters for distributors. Distribution cost is part of the expense ratio, which is why the paper links commission to insurer economics.
Read more: The paper explained
The payment an insurer makes to a distributor for bringing in business, usually a percentage of premium.
Why it matters for distributors. It is the main income for agents and most intermediaries. Under the paper, every reward, incentive and reimbursement would count toward the commission cap proposed.
Read more: Broker commission
Maximum commission rates IRDAI proposes by segment, line, channel and premium type, set out in Box 4A of the paper. Distribution entities get lower caps than individual agents on the same product proposed.
Why it matters for distributors. For example, new-vehicle motor third-party cover would carry nil commission for a distribution entity and 2.5% for an agent proposed.
Read more: The caps, line by line · Cap table
A broker licensed to do both direct broking and reinsurance broking.
Why it matters for distributors. Large commercial risks often need both, which is why composite licences exist.
Read more: Broker guide
A draft proposal a regulator publishes to collect public comments before it writes final regulations. IRDAI's paper 'Recalibrating Economics of Insurance Distribution' is dated 23 September 2026 and asks 32 questions.
Why it matters for distributors. Nothing in a consultation paper is law yet. Comments can change the final rules, so distributors who respond have a say.
Read more: The paper explained · Have your say
A company, bank, NBFC or other firm registered with IRDAI to sell insurance as an agent, through its specified persons.
Why it matters for distributors. Corporate agents, including banks, would become distribution entities under the paper proposed.
Read more: Bancassurance guide
An independent audit of what a business spends and why.
Why it matters for distributors. Proposed for insurers, and for distribution entities above reported revenue thresholds proposed.
Read more: Conduct and accountability
Government-backed village-level centres that can offer insurance among other services.
Why it matters for distributors. CSCs are one of the licence types the paper proposes to consolidate proposed.
Read more: Before vs after
A broker licensed to arrange insurance between clients and insurers, in life, general or both.
Why it matters for distributors. The commission caps for distribution entities would apply to its business proposed.
Read more: Broker commission
Cover for construction and erection projects and for machinery and equipment breakdown.
Why it matters for distributors. Grouped with property for the slab-wise caps: 7.5%, 6.25% and 5% for entities as sum insured rises proposed.
Read more: Cap table
The ceiling on what an insurer may spend to run and grow its business, including commission, as a share of premium. For general insurers it is 30% of GWP today.
Why it matters for distributors. The paper proposes cutting it to 20% of domestic GDPI within five years, with 25% reported as the two-year step proposed. A tighter EoM limit squeezes what insurers can pay distributors.
Read more: Commission caps and EoM · Before vs after
A draft regulation or circular IRDAI releases for comment before finalising it.
Why it matters for distributors. Exposure drafts are the last stage at which distributors can ask for changes to a rule.
Read more: IRDAI circulars and drafts
Making a customer buy insurance as a condition of getting a loan or another product.
Why it matters for distributors. The paper prohibits compulsory bundling with credit except where the customer gets a demonstrable benefit proposed.
Read more: Bancassurance guide
Premium an insurer writes directly from policyholders, excluding reinsurance accepted from other insurers. 'Domestic' GDPI covers business written in India.
Why it matters for distributors. The paper proposes that the EoM limit be measured on domestic GDPI rather than GWP, which narrows the base the limit is applied to proposed.
Read more: Key numbers · EoM limits
Insurance other than life insurance: motor, health, fire and property, marine, engineering, liability, crop and other covers. Most policies run for a year and are renewed.
Why it matters for distributors. The 2026 paper's commission caps for general insurance are set line by line, so the line you sell decides your ceiling.
Read more: Commission caps by line
The industry body of general insurers in India. Its segment-wise monthly reports of gross direct premium are the source of the GI Pulse dashboard.
Why it matters for distributors. Monthly premium by insurer and segment shows which lines and companies are growing, which shapes where distribution effort goes.
Read more: Dashboard
A health policy covering a group, usually an employer's staff, under one contract.
Why it matters for distributors. Proposed caps: 2.5% for entities and 5% for agents, up to ₹1 crore proposed.
Read more: Commission caps
The total premium an insurer writes in a period, before deducting reinsurance. It includes premium accepted from other insurers as inward reinsurance.
Why it matters for distributors. Today a general insurer's expense of management limit is 30% of GWP; the paper proposes a different base (see GDPI).
Read more: EoM limits
Claims incurred in a period divided by premium earned in the same period, as a percentage.
Why it matters for distributors. A high ICR on a line leaves insurers less room to pay distribution costs.
Read more: Dashboard
The proposed single category for distribution firms: brokers, corporate agents including banks, web aggregators, IMFs and company-structured PoSP businesses proposed.
Why it matters for distributors. IDEs get lower commission caps than agents. Reported entry terms include capital of ₹10 lakh and permanent registration proposed.
Read more: In 60 seconds · Licensing architecture
The proposed category for individuals who sell insurance: agents, associates, specified persons and PoSPs proposed.
Why it matters for distributors. IDPs would get the agent column of the Box 4A caps proposed.
Read more: In 60 seconds
An IRDAI-promoted body that collects and analyses insurance data for the industry. It hosts IRDAI's consultation portal for the distribution paper at iib.gov.in/dr.
Why it matters for distributors. Formal responses to the 2026 paper go through the IIB portal, using IRDAI's Excel template.
Read more: How to respond · Respond to IRDAI
A firm registered with IRDAI to sell products of several insurers, and certain other financial products, through its insurance sales persons.
Why it matters for distributors. IMFs would fold into the distribution entity category proposed.
Read more: Licensing architecture
A person appointed by an insurer, or by more than one insurer within IRDAI's limits, to sell its policies and service its customers.
Why it matters for distributors. Agents get higher caps than distribution entities under Box 4A, for example 20% against 15% on first-year individual health proposed.
Read more: Commission caps
An IRDAI-licensed firm that acts for the client, not the insurer. It compares cover across insurers, places the risk and helps with claims.
Why it matters for distributors. Brokers would become distribution entities under the paper and face the entity caps proposed.
Read more: Insurance broker commission
A person or firm, other than the insurer, that sells or services insurance: brokers, corporate agents, web aggregators, IMFs, TPAs, surveyors and others, each licensed under its own IRDAI regulations.
Why it matters for distributors. The paper proposes folding today's 17 entity and individual licence types into three categories proposed.
Read more: Licensing architecture
An independent, free forum for policyholders' complaints against insurers and intermediaries, under the Insurance Ombudsman Rules, 2017.
Why it matters for distributors. Complaints and mis-selling findings can affect a distributor's standing with insurers and IRDAI.
Read more: Conduct and accountability
The statutory regulator for insurance in India. It licenses insurers and intermediaries, sets rules on commission and expenses, and issued the 2026 consultation paper on distribution reforms.
Why it matters for distributors. Every licence, commission rule and conduct requirement a distributor follows comes from IRDAI regulations, circulars and master circulars.
Read more: The 2026 distribution paper · IRDAI circulars in plain English
Cover for legal liability to others, such as public, product, professional indemnity and directors' and officers' liability.
Why it matters for distributors. Falls under the paper's miscellaneous lines: 15% retail and 10% corporate or group for entities proposed.
Read more: Cap table
Cover for goods in transit by sea, air, rail or road.
Why it matters for distributors. Proposed caps: 10% for entities and 15% for agents proposed.
Read more: Cap table
Cover for ships and vessels themselves.
Why it matters for distributors. Proposed cap: 10% for both entities and agents proposed.
Read more: Cap table
A proposed shared platform for buying and servicing insurance, such as Bima Sugam, backed by a Public Insurance Registry proposed.
Why it matters for distributors. Motor dealers would have to show customers an MII option; a 5% ceiling on MII platform fees is reported proposed.
Read more: PoSP, Bima Sugam and motor
Selling a policy that is unsuitable for the customer or misrepresenting its terms. The paper gives a formal definition with twelve illustrations, as reported proposed.
Why it matters for distributors. Proven mis-selling would trigger commission clawback proposed.
Read more: Conduct and accountability
A motor dealer or similar business that sells and services motor insurance for an insurer or broker at the point of vehicle sale.
Why it matters for distributors. The paper gives two figures for this channel: 30% of motor premium for OEM brokers and MISPs together (Part 1) and 46% for MISPs (Part 2). MISPs would register as distribution entities proposed.
Read more: PoSP, Bima Sugam and motor · Motor and dealers
The part of a motor policy that pays for damage to the policyholder's own vehicle, from accident, theft, fire and similar events. It is optional.
Why it matters for distributors. Proposed caps for a distribution entity: 5% on a new vehicle and 10% on an old vehicle proposed.
Read more: Motor caps
The part of a motor policy that pays for injury, death or property damage the vehicle causes to others. It is compulsory under the Motor Vehicles Act, and its base premium is notified by the government.
Why it matters for distributors. Proposed caps: nil for distribution entities and 2.5% for agents on new vehicles; 2.5% and 5% on old vehicles proposed.
Read more: Motor caps
Add-on parts of a motor policy: personal accident cover for the owner-driver and others, and legal liability, for example to a paid driver.
Why it matters for distributors. Box 4A groups them with own damage for the motor caps proposed.
Read more: Cap table
An estimate of the largest loss likely from a single event at a risk location, usually lower than the full sum insured.
Why it matters for distributors. Box 4A applies the property and engineering slabs on a PML basis proposed.
Read more: Cap table
A health policyholder's right to move a policy to another insurer while keeping credit for waiting periods already served.
Why it matters for distributors. Ported health policies would carry the renewal cap, not the first-year cap proposed.
Read more: Commission caps
An individual who sells simple, pre-underwritten insurance products under IRDAI's PoSP guidelines, working through an insurer, broker or corporate agent. A PoSP must meet the minimum qualification and complete the training and exam set by IRDAI.
Why it matters for distributors. PoSPs are a large motor and retail channel. Under the paper individual PoSPs stay as distribution persons, and PoSP platforms are asking for commission parity with agents proposed.
Read more: PoSP, Bima Sugam and motor
The price a policyholder pays an insurer for cover.
Why it matters for distributors. Commission is calculated as a percentage of premium, so caps and premium levels together set a distributor's income.
Read more: Commission caps
Cover for buildings, plant, stock and other assets against fire, natural catastrophes and related perils.
Why it matters for distributors. Proposed caps differ for retail property and for large property and engineering risks, which are slab-wise by sum insured on a PML basis proposed.
Read more: Cap table
Proposed digital public infrastructure that would sit behind MIIs and record policies proposed.
Why it matters for distributors. Every policy would be tagged to its seller, which links to the paper's mis-selling and clawback rules proposed.
Read more: Market infrastructure
Insurance bought by insurers, transferring part of their risk to a reinsurer.
Why it matters for distributors. Large commercial risks depend on reinsurance capacity, and inward reinsurance is excluded from the proposed EoM base.
Read more: GDPI
A broker licensed to arrange reinsurance, placing part of an insurer's risk with reinsurers in India or abroad.
Why it matters for distributors. Reinsurance is outside the domestic GDPI base the paper proposes for EoM.
Read more: Broker guide
Payments or benefits an insurer gives a distributor on top of commission, such as volume bonuses, non-cash benefits or reimbursed costs.
Why it matters for distributors. The paper proposes that all rewards, incentives and reimbursements count toward the commission cap proposed.
Read more: Commission caps · Broker commission
An extra allowance on top of the first-year cap for individual policies sold in smaller places: 10% of the cap for towns below 10 lakh population, and 20% for towns below 50,000 and all rural areas proposed.
Why it matters for distributors. Distributors working outside big cities would earn somewhat more per policy under the draft.
Read more: Small towns and rural areas
An insurer's available capital divided by the capital it is required to hold. IRDAI's control level is 150%.
Why it matters for distributors. Insurers near the control level may cut growth, including what they spend on distribution.
Read more: IRDAI circulars
An employee of a corporate agent or broker who is trained and authorised to sell insurance on the firm's behalf.
Why it matters for distributors. The paper treats specified persons as distribution persons (IDPs) proposed.
Read more: Licensing architecture
A documented check that a product fits the customer's needs before sale.
Why it matters for distributors. The paper would require it above a ticket size proposed.
Read more: Conduct and accountability
The maximum amount an insurer will pay under a policy.
Why it matters for distributors. Property and engineering caps are set in slabs of sum insured: below ₹500 crore, ₹500 to 2,500 crore and above ₹2,500 crore proposed.
Read more: Cap table
An IRDAI-licensed professional who inspects a loss and assesses the amount payable on a general insurance claim.
Why it matters for distributors. Surveys decide claim amounts on motor, property and marine claims that distributors help clients through.
Read more: IRDAI circulars
An IRDAI-licensed firm that processes health claims and cashless hospital approvals for insurers.
Why it matters for distributors. TPAs are part of how health policies are serviced after sale.
Read more: IRDAI circulars
An IRDAI-registered website that lets customers compare insurance products and buy them online.
Why it matters for distributors. Web aggregators are distribution entities under the paper and get the entity caps proposed.
Read more: Commission caps
No term matches. Try Ask GI Pulse.
Definitions are in our own words, from IRDAI’s paper and well-established public definitions. Check IRDAI’s regulations before relying on them. Missing a term? Tell us.