Policybazaar Shares Fall 26% on IRDAI Proposals

Policybazaar parent PB Fintech shares came under heavy selling pressure, falling around 26%, after IRDAI proposed a wide-ranging overhaul of insurance distribution economics. Proposed Changes to Insurance Commissions: IRDAI's consultation paper proposes linking distributor commissions to factors including product complexity, distribution channel, policy size and selling effort. For health insurance, the proposal includes commission limits of 15%–20% for new policies, while renewal and portability commissions could be capped at lower levels. Motor and life insurance commissions would also face proposed product-specific limits. Why Policybazaar Is in Focus Policybazaar operates primarily as an online insurance distribution platform, making the proposed commission framework particularly relevant to its business economics. According to Jefferies, a 10% reduction in commission rates could potentially translate into a 10%–12% decline in earnings for PB Fintech and Turtlemint. This is a brokerage estimate, not a confirmed impact. IRDAI Also Targets Distribution Costs The regulator has proposed a five-year reduction in Expense of Management limits, alongside greater disclosure of commission structures and stronger safeguards against mis-selling. The proposals also include restrictions on volume-linked incentives, commission clawbacks in cases of mis-selling, and greater use of digital infrastructure such as Bima Sugam. The consultation process is currently open, with stakeholders invited to submit comments by October 25, 2026. These are proposals and are not yet final regulations. Disclaimer: This content is for educational and informational purposes only and should not be considered investment advice or a recommendation to buy or sell any security. Investors should conduct their own research and consider their risk profile before making any investment decision.