India, Sep 25 : Shares of PB Fintech, the parent company of Policybazaar, plunged 36 per cent on September 24 after the Insurance Regulatory and Development Authority of India (IRDAI) proposed changes that could significantly reduce commission payouts across the insurance sector. The decline wiped more than Rs 31,400 crore from the company’s market value in a single session.
IRDAI’s consultation paper proposes bringing back commission limits for life, health and motor insurance. The regulator had removed such caps in 2023. The proposed framework would also prevent banks and non-bank lenders from compulsorily bundling insurance products with loans and would change how life insurance commissions are paid over the duration of policies.
The proposed changes triggered a broad sell-off across insurance distributors, lenders and insurers. Max Financial Services also recorded a sharp decline, while HDFC Life and ICICI Prudential Life Insurance fell 6.7 per cent and 4.4 per cent respectively. Several banks with significant insurance-distribution income also came under pressure.
PB Fintech’s management said the proposed commission structure could have a substantial impact on its non-life insurance operations. Co-founder and Group CEO Yashish Dahiya indicated that the company could reduce spending and slow recruitment as it adjusts to the proposed regulatory framework.
The reforms are intended to reshape insurance distribution and address concerns around policy costs and mis-selling. Industry analysts, however, have said that lower commissions could disrupt existing distribution models that depend heavily on agents and bancassurance channels.
The consultation process remains ongoing, with IRDAI inviting public comments until October 25. The final rules could therefore differ from the proposals currently under consideration.
India’s insurance market has expanded rapidly in recent years. The sector recorded premiums of about Rs 11.93 trillion in fiscal 2025, while the government has also opened the industry to 100 per cent foreign ownership as part of broader insurance-sector reforms.