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Insurance Bill to deter mis-selling
Financial Express Delhi
|December 20, 2025
CAP ON INSURANCE COMMISSION WILL ENABLE COMPETITIVE PRICING OF POLICIES
AS THE INSURANCE Amendment Bill passed by Parliament caps agents' commissions policyholders will benefit because incentives shift from volume-driven sales to needs-based advice. It will help reduce policy lapses and claim disputes over time.
The cap on commission is an important consumer-protection measure which will enable competitive pricing of insurance policies.
Higher penalty
The regulator can now disgorge wrongful gains made by insurers or intermediaries and impose much higher penalties—from ₹1 crore to ₹10 crore for violations. “This improves deterrence against mis-selling, unfair practices, and noncompliance,” says Shilpa Arora, co-founder and chief operating officer, Insurance Samadhan.
The cap on commission is a step towards a healthier and more customer-friendly insurance market an will help create a stronger framework to deter mis-selling.
Premiums are driven by several factors—claims experience, medical inflation, reinsurance costs, solvency requirements, and regulatory norms. Commissions are only one part of the cost structure.
This story is from the December 20, 2025 edition of Financial Express Delhi.
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