India’s IRDAI has mandated digital tagging of insurance policies to individual salespersons, aiming to curb mis-selling and improve transparency amid broader reforms including commission restructuring and consumer protection measures.
India’s insurance regulator has moved to make every policy traceable to the individual who sold it, in a bid to tackle mis-selling and sharpen accountability across a distribution network long criticised for putting sales ahead of advice. According to Value Research, the proposal reflects a broader push by Insurance Regulatory and Development Authority of India chief Ajay Seth to change not only who can be identified after a bad sale, but also how intermediaries are paid for selling insurance in the first place.
Livemint reported that the authority approved digital tagging of each policy to the salesperson responsible at a meeting on 28 July in Hyderabad, turning what had been discussed as a reform idea into a formal requirement. The same reporting said the move is intended to make it easier to track responsibility through banks, brokers and other intermediaries, rather than leaving accountability attached only to the institution that booked the business.
That traceability plan sits alongside a separate effort to recast commissions so that distributors are rewarded over the life of a policy rather than mainly at the point of sale. Business Standard said the regulator is weighing staggered payouts and tighter disclosure rules, with a draft framework expected within weeks. LiveMint has also reported that IRDAI wants to scrutinise bancassurance more closely, while the Economic Survey for 2025-26 noted that insurance penetration slipped to 3.7% from 4% a year earlier, underlining the regulator’s concern that India still lacks adequate cover even as selling costs remain high.
Other changes are also in train. The Times of India reported that the wider reform package includes tougher consumer protection rules, a requirement for corporate agents to deploy qualified staff in every branch that sells insurance and a tenfold increase in the maximum penalty for certain breaches, from Rs 1 crore to Rs 10 crore. LiveMint has separately said draft rules also cover looser investment norms, lower capital requirements for foreign reinsurers and, for the first time, the possibility of insurers merging with non-insurance companies, showing that IRDAI’s overhaul is stretching well beyond the mis-selling debate.
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