RBI Warns High Insurance Commissions Threaten Affordability, Penetration

• RBI flags high insurance commissions as a key risk in its Financial Stability Report (FSR).
• Elevated distribution costs are embedded into product pricing, affecting affordability and insurance penetration.
• IRDAI and the finance ministry previously raised similar concerns about excessive commissions.
• Commission expenses have significantly increased, especially in the private life insurance segment since FY23.
• Higher commissions lead to higher premiums for consumers, hindering the "Insurance for All by 2047" objective.

Why It Matters: RBI, IRDAI, and Finance Ministry warn high insurance commissions hurt affordability and penetration.