Go Digit Says IRDAI Expense Rules Pushed Insurance Commissions Up: What It Means for You

Go Digit, a general insurer, says IRDAI's expense of management (EoM) rules led to an unintended rise in commission. That's according to reporting by The Economic Times. Commission is the fee an insurer pays an agent or distributor for selling a policy.

For you, the point is simple. Commission is paid out of your premium, not on top of it. If commissions rise across the market, policies may get cheaper more slowly. Nothing changes on your current policy today.

Key takeaways

• Go Digit says the EoM rules caused a commission rise that the regulator didn't intend, as reported.
• Commission comes out of the premium you pay.
• We don't have the full details, so no exact figures are known yet.
• Your existing policy and your claim rights are not affected.
• You can still check how much of your premium goes to costs before you buy.

How the EoM rules work in simple terms

IRDAI is India's insurance regulator. EoM stands for expenses of management. It means the total cost an insurer spends to run its business. That covers commission, salaries, rent, advertising and more.

The regulator limits these costs against the premium an insurer collects. The goal is to stop too much of your money going to overheads. Broadly, the newer approach gives insurers more freedom to decide how to split spending within the overall limit.

According to the report, Go Digit says that freedom had a side effect. Commissions went up when nobody meant them to. We haven't seen the numbers behind that claim, so we won't guess how big the rise is.

What higher commission means for your premium

Here's a simple example. These are made-up numbers to show the idea, not real rates. Say you pay a ₹20,000 yearly premium for a health policy.

Commission rate (example)	Commission in rupees	Left for claims and running costs
10%	₹2,000	₹18,000
15%	₹3,000	₹17,000
20%	₹4,000	₹16,000

Every extra ₹1,000 in commission means ₹1,000 less for claims and running costs. Or it means the insurer keeps your premium higher to make up for it. Higher commission can also push agents to favour one policy over another.

Who is affected

This matters most to people who buy through agents or banks. It matters less if you buy straight from the insurer's website.

• Health, motor and travel buyers: premiums may fall more slowly if costs stay high.
• Agents and distributors: they may earn more now, but rules could change again.
• Insurers: they may have to rethink how they spend under the expense limits.

If you buy cover along with a loan, check what the bundled policy costs. You can also plan your yearly budget with our EMI calculators.

What to do now

You don't need to act in a hurry. A few simple habits will protect you:

1. Compare the same cover from at least three insurers before you buy.
2. Ask your agent why they recommend one policy over another.
3. Check the premium on the insurer's own website too.
4. Read the claim settlement record, not just the price.
5. Keep an eye on our news hub for what IRDAI says next.

The regulator may respond to the insurer's concern. Any rule change would apply to new business, and it would be announced publicly. You can read the rules on the IRDAI website.

Frequently asked questions

Will my insurance premium go up because of this?

Not automatically. The report says commissions rose, but it doesn't say premiums will rise. Your current policy stays the same until renewal.

Does commission change my claim amount?

No. Your claim is paid as per your policy terms. Commission only affects how the premium is split behind the scenes.

Is it cheaper to buy insurance online?

Often it can be, since some channels pay less commission. But prices differ by insurer and plan, so always compare the same cover side by side.