IRDAI commission norms: motor-insurance proposal deadline stays 25 Oct

By Akash Gupta · 16 Oct, 2026

IRDAI chair Ajay Seth says proposed insurance-distribution norms are meant to avoid disruption and the 25 Oct feedback deadline is unlikely to move; motor cover rules are unchanged for now.

IRDAI commission norms: motor-insurance proposal deadline stays 25 Oct

IRDAI chairman Ajay Seth said on 15 Oct 2026 that the proposed insurance-distribution and commission norms are intended to improve efficiency without disrupting a market segment, while the 25 Oct feedback deadline is unlikely to be extended. For Indian vehicle owners, this is a proposal-stage update—not a new motor-insurance premium, renewal rule or immediate change to a valid policy.

Key takeaways

Mint reported that Seth wants stakeholders to submit feedback within the 25 Oct 2026 deadline and indicated that a long extension is unlikely.
The 23 Sep 2026 consultation paper proposes product- and channel-based commission limits for motor cover, including 0% for distribution entities on new-vehicle third-party cover and 5% on own-damage cover.
The proposed percentages concern distributor remuneration, not the premium, insured declared value, deductible or claim amount paid by a vehicle owner.
Existing policy terms, renewal requirements and the mandatory third-party cover obligation remain governed by current rules until IRDAI issues final regulations.
The next stages are consideration of feedback, a draft or exposure process and final regulations; no binding implementation date has been notified in the consultation paper.

What changed in the latest IRDAI update?

Mint reported on 15 Oct 2026 that Seth made the remarks on the sidelines of the Samvaad India Open Finance Summit. The event's official programme lists him as the IRDAI chairman and a speaker at the 15 Oct programme, providing the event context for the comments.

According to the Mint report, Seth said the proposed norms are not intended to disrupt a particular market segment or business model. He described the intended path as an orderly transition towards greater efficiency. Mint also reported that he encouraged stakeholders to submit their suggestions within the existing deadline and said the consultation would be followed by another round when draft regulations are issued.

The wording matters for motorists. “Unlikely to be extended” is a reported signal from the regulator's chair, not a final notification closing the window early or changing the legal status of the paper. As of 16 Oct 2026, the deadline remains 25 Oct 2026 and the commission changes remain proposals.

What the consultation paper proposes for motor insurance

IRDAI released the two-part Recalibrating Economics of Insurance Distribution consultation paper on 23 Sep 2026. The paper examines how insurers and distributors are paid, proposes a simpler distribution structure, and seeks feedback on commission, expense and policyholder-protection changes. The motor-insurance figures below are proposed limits, not rates that a customer must pay.

Motor cover in a new vehicle	Proposed distribution-entity limit	Proposed individual-agent limit
Third-party liability	0%	2.5%
Own damage	5%	10%

The figures are from the 23 Sep 2026 consultation paper and were also reported by Business Standard when the proposal was released. They apply to commission or remuneration paid within the distribution arrangement. They do not mean that third-party insurance becomes free, that own-damage premiums fall by 5% or 10%, or that a claim will be settled at a particular amount.

The proposal also covers broader distribution economics, including expenses of management, incentives and safeguards against mis-selling. Mint reported that the paper includes a proposal to stop banks and non-banking finance companies from making insurance a compulsory part of a loan package. That remains a draft idea, not a rule that changes a vehicle-loan or insurance agreement today.

What this means for vehicle owners and buyers

Motorists need to separate three things: the insurance product, the price of the cover and the way it is sold. The commission proposal is about the third item. A lower permitted payout to a distributor could change how policies are presented or compared, but it does not automatically reduce an insurer's risk-based premium. A quote can still vary with the vehicle, age, location, insured declared value, selected cover, deductibles, claims history and add-ons.

Third-party liability insurance remains mandatory for vehicles using Indian public roads under the current motor-insurance framework. The consultation paper does not cancel that obligation. It also does not replace the existing wording of a valid policy, alter a no-claim bonus by itself or create an immediate renewal discount.

For a new-car buyer, the useful document is still the complete quote. It should show the third-party and own-damage portions separately, along with the insured declared value, deductibles, exclusions, add-ons and service arrangements. The proposed cap is not a substitute for comparing what the policy covers. FuelPrice's guide to zero-depreciation and comprehensive car insurance explains why the coverage structure can matter more than a headline price.

For an existing owner, a valid policy does not need to be replaced merely because a consultation paper mentions future commission limits. The immediate checks are the policy expiry date, the vehicle and owner details, the no-claim bonus record and any break-in inspection requirement. The car-insurance renewal and NCB guide covers those current renewal questions.

Owners who are unsure whether a policy is active can use FuelPrice's vehicle-insurance validity and fraud-check guide. That check is relevant now, regardless of whether IRDAI later changes the distribution framework.

What happens after 25 October?

IRDAI will have to examine stakeholder submissions before deciding whether to retain, amend or drop parts of the consultation paper. The regulator's next formal steps are important because the consultation paper itself is not the final legal instrument. A subsequent draft or exposure process can change the proposed caps, definitions, transition period and treatment of different distributors.

Vehicle owners should watch four details in any later document: the final product-level limits, the effective date, the transition rules for policies already issued or renewed, and whether any reduction in distribution cost is required to reach policyholders through clearer pricing or better service. None of those outcomes can be assumed from the current proposal.

The reader takeaway is straightforward: IRDAI's latest message keeps the insurance-distribution consultation moving, but it does not change today's motor-insurance premium or renewal obligation. Until final rules are notified, motorists should read the cover in the quote or policy, verify the validity date and compare IDV, deductibles, exclusions and add-ons on their own terms.