IRDAI to Draft New Rules on Insurance Commissions, Flags High Payouts: DFS Secretary

• DFS Secretary M Nagaraju announced IRDAI will issue draft regulations to control insurance commissions.
• The government seeks to empower IRDAI for tighter oversight on distribution costs and commission payouts.
• High commissions reportedly lead to increased premiums or low Incremental Capital Ratio (ICR), negatively impacting policyholders.
• Reforms under the Insurance Act aim to grant IRDAI clear regulatory powers to ensure reasonable commission payments.
• IRDAI is already authorized to set commission limits, and insurers must disclose management expenses for transparency.

Why It Matters: IRDAI will regulate insurance commissions to protect policyholders from high payouts and ensure transparency.