India’s insurance regulator plans to expand access by involving telecom outlets, Common Service Centres, banking correspondents, and local entrepreneurs in the distribution network, while reforming commission and product guidelines to boost coverage and transparency.
India’s insurance regulator is preparing to widen the market by bringing in telecom operators, Common Service Centres, banking correspondents and local entrepreneurs as new distribution points, in a bid to improve access in areas that remain poorly served. In an interview with CNBC-TV18, Insurance Regulatory and Development Authority of India chairman Ajay Seth said the aim is to let people sell insurance within the communities where they already live and work, rather than depending on agents travelling in from larger cities.
Seth said telecom outlets and agents could be used to sell policies, while the country’s vast network of Common Service Centres, many of them in rural India, could also become a channel for distribution. Banking correspondents may be included as well. The broader idea, he said, is to tap existing local networks and turn them into points of sale for insurance, which could help extend coverage without requiring a major expansion of traditional agency structures.
The regulator is also considering a wider role for point of sales persons, or POSPs, who currently handle only a limited set of simpler products. Under the proposed framework, POSPs that complete online training and pass a test could be allowed to sell a broader range of cover, including unit-linked insurance plans. Seth said the model is intended to improve skills and expand the number of people qualified to distribute insurance products.
The wider distribution overhaul is part of a larger reset of the sector’s economics. LiveMint has reported that IRDAI has proposed product-specific commission caps, three categories of distributors and tighter limits on insurers’ expenses of management over five years. The Financial Express reported that the regulator also wants to simplify the distribution structure rather than dismantle it, while keeping remuneration aligned with the effort and breadth of service offered by each channel. The consultation process is open until 25 October, and the new rules are expected to take effect from early 2027.
Other proposed changes point in the same direction: lower costs, more transparency and fewer bottlenecks between insurers and customers. Economic Times reported that the commission framework would vary by product, distribution channel and policy size, while Moneycontrol said the regulator is also putting greater scrutiny on bancassurance and larger intermediaries. Separately, Moneycontrol reported that IRDAI is working on an embedded insurance framework that would allow cover to be sold alongside other products and services, reflecting a wider push to make insurance easier to buy and harder to missell.
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