New Delhi, June 17 -- Regulatory uncertainty around proposed distribution reforms has weighed on India's life insurance sector in the near term, but the long-term growth outlook remains favourable as lower product costs and improved affordability could support insurance penetration, according to a Kotak Institutional Equities sector update report.

The report noted that life insurance companies have faced pressure from frequent policy changes, which have created uncertainty for investors and disrupted near-term business planning.

"Life insurance stocks have been significant underperformers, likely reflecting investor frustration with frequent regulatory changes, leading to near-term disruption and uncertainty," the report said.

Accordin...