The Insurance Regulatory and Development Authority of India (IRDAI) have proposed to set a 20% commission cap for general insurance companies. It has also allowed life insurers whose expenses were under 70% of the allowable limit to set their own commission rates across product segments. IRDAI has also deliberated that commission and remuneration payout should be based on a board approved policy which will be reviewed on a yearly basis. In the direct business, no commission shall be payable to insurance agents or the insurance intermediaries and the insurers must grant discounts on the premium. The move is likely to reduce costs for insurers and allow them to make products more affordable. The new norms on commissions would incentivise higher ‘persistency ratios’. It would provide insurers more flexibility while streamlining payments to agents. In FY 2020-21 commission expenses for life insures was Rs 32,994.08 crore and Rs 15,409.50 crore for general insurers.