IRDAI’s mis-selling draft: what changes at the counter, and what doesn’t
4 min read
IRDAI published a set of draft rules on 19 June 2026 to curb mis-selling. The rules make a mis-sold policy easy to trace back to the person who sold it. They don’t yet stop the sale itself.
The proposals sit in the IRDAI (Insurance Intermediaries) (Amendment) Regulations, 2026 consultation paper, one of several exposure drafts in the wider 2026 insurance reform wave. Comments are open until 10 July 2026. Three changes matter to you as a buyer.
First, every policy sold through an intermediary will have to be tagged to the named individual who solicited it: the Specified Person at a corporate agent, the qualified person at a broker, the point-of-sale person, and so on. Today a complaint often dead-ends at a branch. Under the draft, it traces to a person.
Second, each branch of a corporate agent, banks included, must designate at least one qualified Specified Person for solicitation at that location. This pins accountability to a named salesperson at each point of presence.
Third, intermediaries earning commission above a threshold IRDAI will set must report their commission income, related-party transactions, profit earned, and dividend repatriation to the regulator every year, and publish those disclosures on their own website.
Now notice what the paper does not do. Nothing in it touches how much an intermediary earns, or the gap between what a pure term plan pays a seller and what a savings-linked plan pays. That gap is the engine of mis-selling: the reason someone who walked in for term cover walks out with a plan that “also gives returns.” The draft adds sunlight. It does not add a cap.
There is a second quiet move in the same paper. IRDAI proposes to scrap the registration that a corporate agent’s salespeople currently need, a one-time ₹500 sign-up. Front-end vetting goes down; back-end traceability goes up. The bet is that bad conduct is better caught after the sale than screened before it.
Why all this, now? The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025 came into force on 5 February 2026, and IRDAI is redrawing its rulebook to match. The complaint data gives the push. Grievances classified as unfair business practices against life insurers rose to 26,667 in 2024-25 from 23,335 the year before, about 14% higher, and now make up 22.14% of all complaints against life insurers, up from 19.33% (IRDAI Annual Report 2024-25).
The risk is concentrated where most policies are sold. Corporate agents, mostly banks, accounted for 52.97% of private life insurers’ individual new business premium in FY25, with banks alone at 49.66% (IRDAI Annual Report 2024-25). The branch counter, in other words, is where the rules are aimed.
So what does this mean for you? If you are mis-sold a policy after these rules take effect, there will be a named person on record and a branch-level salesperson accountable for the solicitation. That is a real paper trail for a complaint, and better odds the regulator can act on it. But the trail helps after the damage is done. When someone at a bank counter steers you from the term cover you came for to a bundled plan, nothing in these rules changes their reason for doing it.
The draft will make a mis-sold policy easier to trace. Walking out without one is still up to you.
Frequently asked questions
What is the IRDAI mis-selling draft rule?
It is the IRDAI (Insurance Intermediaries) (Amendment) Regulations, 2026, a consultation paper published on 19 June 2026. It would tag every policy sold through an intermediary to the named salesperson, require at least one qualified Specified Person per corporate-agent branch, and make intermediaries earning commission above a prescribed threshold disclose their commission income and publish it online.
Does the IRDAI draft reduce insurance agent commissions?
No. The paper is silent on commission levels. It requires disclosure of commission income above a prescribed threshold, but it does not cap or cut how much an intermediary earns.
When is the deadline to comment on the IRDAI draft?
IRDAI has invited comments on the draft until 10 July 2026.
Sources: IRDAI (Insurance Intermediaries) (Amendment) Regulations, 2026 consultation paper, published 19 June 2026; IRDAI Annual Report 2024-25.
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Disclaimer: This article is for informational purposes only and does not constitute insurance advice. Consult an IRDAI-registered insurance advisor for recommendations tailored to your specific financial situation and needs.
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Ashok HegdeAshok Hegde is the Chief Executive Officer at Quantent, where he leads a team of media professionals helping clients leverage digital media for better business outcomes. With over 30 years of experience across print and digital media, he advises clients on content and media strategy — from startups to established brands. His focus is on helping organisations use online media — social, search, and mobile — to build brand awareness, drive sales, and protect reputation.
