New Delhi, Sept. 26 -- Proposed changes to insurance distribution rules could give mis-selling a direct financial consequence through commission claw-backs, while requiring insurers and distributors to track the person responsible for each policy, Kotak Institutional Equities said in a report.

The brokerage said the proposed framework would make documented needs and suitability analysis mandatory for life insurance sales above a defined ticket size. Customer consent would also not absolve the seller of responsibility if a policy is found unsuitable.

"Documented needs and suitability analysis becomes mandatory for sales by life insurers above a defined ticket size, and customer consent will not absolve responsibility for an unsuitable sa...