The consultation paper issued by the Insurance Regulatory and Development Authority of India (IRDAI) on recalibrating the economics of insurance distribution is among the most ambitious regulatory exercises the Indian insurance industry has seen. Its diagnosis of weak penetration, mis-selling and misaligned incentives is difficult to disagree with. The push for product trans parency, standardised quality metrics and digital infrastructure is welcome.
While reforms to distributor economics for savings-oriented life insurance products were clearly overdue, a few gaps on the protection side, including term insurance and non-life insurance, must be highlighted.
