PB Fintech Shares Slump as IRDAI Proposes Fee Caps

PB Fintech shares plunged 23% on September 24, leading a sell-off across insurance-linked stocks after IRDAI proposed caps on insurance commissions and tighter Expense of Management limits. The proposed changes could significantly reduce fee income for digital brokers and banks, particularly in high-margin insurance categories. The proposed framework seeks to link commissions to the type and complexity of insurance products, distribution channels and selling effort. For products sold through open-architecture channels such as brokers and banks, lower commission limits have been proposed. IRDAI has also proposed restrictions on commissions for mandatory covers and a ban on compulsory insurance bundling with loans. The impact was visible across the sector, with Max Financial Services falling as much as 12%, L&T Finance declining 10% and HDFC Life dropping up to 8.5%. Jefferies estimated that a 10% reduction in new-business commission rates could translate into a 10–12% earnings decline for PB Fintech and Turtlemint. IRDAI has invited stakeholder feedback on the proposals until October 25, after which the final framework will be decided.