Financial Services – Sector Update – IRDAI Tightens Distribution Norms
Published on 24 Sep 2026
The consultation paper released by IRDAI prescribes steep commission cuts and tighter EoM norms for life insurers. While these regulations are VNB positive over the long run, we expect some weakness in near-term growth as lower commissions in savings and credit life is likely to be a drag. We expect companies to push for growth in retail protection, led by individual agents where commission cuts are not as sharp. We retain a positive stance on life insurers with some clarity on new commission guidelines. SBI Life pays the lowest commission among our coverage and is best placed to ride the uncertainty. We continue to prefer MAXF as our top pick, backed by a strong proprietary channel. Large NBFCs remain most exposed, with 3-26% of FY26 PBT coming from insurance income.
