PoSPs, Bima Sugam and motor insurance: what the proposal changes

Motor insurance would move toward market infrastructure platforms such as Bima Sugam, and dealers would have to show customers that option. Third-party cover on a new vehicle would carry no commission for distribution entities. PoSP platforms want the same commission as agents.

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

Photo: Marvin Castelino / Unsplash

Nil / 2.5%New-vehicle third-party cap: distribution entity / agentIRDAI Box 4A: general insurance maximum commission limits

~₹29,000 crMotor premium through OEM brokers and MISPs in FY25, at about 24% commissionIRDAI paper The Insurance Reporter

10 lakh+PoSPs on the three largest platforms combinedET Now

5%Reported ceiling on MII platform feesKhaitan & Co via Mondaq

What changes

A Public Insurance Registry would sit behind market infrastructure institutions (MIIs); Bima Sugam is the first, as reported. Khaitan & Co via Mondaq
Dealers must show the MII option and may not refuse cashless repair because a policy was bought elsewhere, as reported. Question 27 asks whether the MII option should be the default for new vehicles. Khaitan & Co via Mondaq IRDAI paper
Individual PoSPs stay as distribution persons; PoSP businesses with a company structure, including MISPs, would register as distribution entities. IRDAI paper

Motor caps

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/PA/LL, new vehicle	5%	10%
Motor TP, old vehicle	2.5%	5%
Motor OD/PA/LL, old vehicle	10%	15%

What PoSP platforms want

Commission parity with agents, and the right to charge insurers for technology platforms. IRDAI is reported to oppose technology fees over and above commission. ET Now

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

What is Bima Sugam?

Bima Sugam is an insurance marketplace being built by the industry. The paper treats it as the first market infrastructure institution (MII) for insurance.

Will PoSPs get the same commission as agents?

Not under the current draft. PoSP platforms have asked IRDAI for parity with individual agents, as reported by ET Now on 19 October 2026.

What commission will motor dealers get?

Dealers sell through OEM brokers or as MISPs, which become distribution entities: nil on new-vehicle third-party, 5% on new-vehicle own damage, 2.5% on old-vehicle third-party and 10% on old-vehicle own damage.

Note on the data

The paper gives two figures for the dealer channel: Part 1 says OEM brokers and MISPs hold 30% of motor premium; Part 2 says MISPs hold 46%. Cite the paragraph you rely on.

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 →