IRDAI commission caps: what the 2026 proposal means for general insurance

IRDAI wants to bring back fixed commission limits. Each product and channel would get a ceiling, and every incentive, reward and reimbursement would count toward it. Insurers’ overall spending limit would also fall. These are proposals; comments close on 31 October 2026.

Updated 24 Oct 2026 · Comments to IRDAI close 31 Oct 2026

Photo: rupixen / Unsplash

30% → 20%Insurers’ expense of management limit, over five yearsIRDAI paper

NilCommission on third-party motor cover for a new vehicle sold by a distribution entityIRDAI Box 4A: general insurance maximum commission limits

15% / 5%Individual health cap for distribution entities: first year / renewalIRDAI Box 4A: general insurance maximum commission limits

+259%Rise in motor commission FY23–FY25, against about 34% rise in motor premiumInsurance Business Asia

What changes

Since 2023–24, each insurer has set commission through its own board-approved policy, within an overall expense limit. The paper replaces this with statutory caps by segment, line, channel and premium type. IRDAI paper Khaitan & Co via Mondaq
Distribution entities (brokers, corporate agents including banks, web aggregators) get lower caps than individual agents on the same product. IRDAI Box 4A: general insurance maximum commission limits
The expense of management limit moves from 30% of gross written premium to 20% of domestic gross direct premium within five years, with 25% reported as the two-year step. IRDAI paper Khaitan & Co via Mondaq

The caps, line by line

Proposed maximum commission, % of premium. Source: IRDAI Box 4A: general insurance maximum commission limits
Product	Distribution entity	Agent
Motor TP, new vehicle	Nil	2.5%
Motor OD, new vehicle	5%	10%
Motor TP, old vehicle	2.5%	5%
Motor OD, old vehicle	10%	15%
Individual health, first year	15%	20%
Individual health, renewal or porting	5%	10%
Group health	2.5% (max ₹1 cr)	5% (max ₹1 cr)
Retail property, first year	15%	20%
Retail property, renewal	10%	15%
Marine cargo	10%	15%
Miscellaneous, retail	15%	17.5%
Miscellaneous, corporate / group	10%	15%

Small towns and rural areas

Individual policies sold in towns below 10 lakh population get an extra 10% of the first-year cap; towns below 50,000 and all rural areas get an extra 20%. IRDAI Box 4A: general insurance maximum commission limits

Where do you stand?

The questions IRDAI is asking on this topic. Tap once to react; comments appear after review.

All 32 questions →

Questions people ask

Are IRDAI’s commission caps final?

No. They are proposals in the consultation paper of 23 September 2026. IRDAI is taking comments until 31 October 2026 (extended from 25 October), and draft regulations are expected to follow.

What is the proposed commission cap on health insurance?

For individual health policies, 15% of first-year premium and 5% on renewal or porting for distribution entities such as brokers; 20% and 10% for agents. Group health is capped at 2.5% for entities and 5% for agents, up to ₹1 crore.

What happens to motor third-party commission?

For a new vehicle, third-party cover carries nil commission when sold by a distribution entity and 2.5% when sold by an agent. For an older vehicle, the caps are 2.5% and 5%.

What is the expense of management limit?

It is the ceiling on what an insurer spends to run and grow its business, including commission. The paper proposes cutting it for general insurers from 30% of gross written premium to 20% of domestic gross direct premium over five years.

When would the caps start?

The paper does not fix a date. Press reports say 1 January or 1 April 2027 are being considered.

These are proposals, not final rules. Summaries are in our own words; check figures against IRDAI’s paper before relying on them. Full explainer of the paper →