India, Oct. 12 -- What should take precedence - the livelihoods of one million employees in insurance distribution or the financial well-being of hundreds of millions of Indian policyholders? The fight between disaggregated, voiceless consumers without a platform and well-funded, organised insurance companies and distributors is unfair. That is where the role of a regulator comes in, especially in retail finance, where the product being sold is invisible, is created in the buyers' mind when being sold and whose moment of truth is sometimes 30-40 yearsin the future. The battle in India's insurance industry today is about whether the industry protects a high-cost, distribution-led model with little accountability - or moves towardsa consumer-first market, built onefficiency, innovation and value. The pushback against the Insurance Regulatory and Development Authority of India (IRDAI)'s September 23, 2026, consultation paper that seeks to bring about a much-awaited change in India's insurance sector is coming from the incumbent insurance firms and distributors. The Insurance Brokers Association of India (IBAI) has pleaded in a letter to the prime minister (PM) that a million livelihoods would be affected. They also want time beyond October 30 to even respond to the paper. The general insurance companies are playing a more nuanced game, where they seem to be missing from the channels with their anti-consumer views, but through theGeneral Insurance Council (GIC), want the consumer to pick up 10% of the hospital bill by January 1, 2027. The broking community - asking for a business model that preys on retail investors and is geared toward maximising commission rather than policyholder well-being - should remember that the government did not hesitate to shut down online gaming despite the same livelihood argument. The GIC is expecting a policyholder, admitted to the hospital, to argue with doctors over treatments recommended to prevent hospitals from overcharging. This is serious hubris. The GSTbenefit on lower premiums has already been creamed away by the industry. The rise in health insurance premiums for existing policyholders is extractive. Instead of better underwriting and improving claims ratios for individuals, the GIC wants to squeeze the helpless individual. My prediction is that if the 10% co-pay comes into effect, the Indian health insurance industry will see degrowth. India's insurance industry needs to understand that any market, other than luxury products, that carries fat distribution commissions and opacity in the product and sales will stay in a low-value equilibrium. Over the past 30 years, the Indian stock and mutual fund markets have gone through rounds of regulator-induced transparency and lowering of distribution costs due to both regulation and technology. The impact has been transformational in terms of size, reach and value. Unless transparency is increased and distribution costs are lowered, the insurance industry will decline, taking away a reasonably priced and serviced safety belt that Indians need. In 1990, the Indian stock market was in a low-volume, high-cost deal. Though the brokerage limits of the Securities and Exchange Board of India (Sebi) were 2.5%, its 1998-99 annual report put the actual commission charged at 0.5-5%. Retail investors never got to know the actual price of the trade since the open outcry system was conducted behind closed doors. They usually sold at the lowest recorded price and bought at the highest. The BSE was, then, a brokers' club that resisted any kind of change. Setting up the NSE with screen-based trading brought transparency and lower costs. Now in 2026, for certain trades, brokerage is effectively zero or a flat Rs.20 (as charged by the fintech discount brokers). Of course, the lowering of costs came along with a full regulatory suite of depositories, dematerialisation, setting up of custodians, insider trading regulations, electronic clearing and settlement, and much tighter regulatory norms by Sebi, which progressively got more teeth as markets expanded. The market cap (number of shares of a company multiplied by stock price) has grown from around Rs.1 lakh crore to over Rs.411 lakh crore over a 36-year-period starting in 1990, an average annual growth rate of 18%. From around 100,000 demat accounts in 1998 to over 230 million accounts in 2026. From less than 30 million unique investors in 2019 to over 130 million in 2026. Markets are larger, safer, and more transparent. The mutual fund story is similar: Commission reform began by 2006, with the removal of the "new fund offer" charge, wherein 6% of the amount collected in a new offer was taken as "marketing costs" by the fund house. So, Rs.10,000 crore collected resulted in Rs.600 crore of costs borne by investors. In 2009, Sebi took away the 2.25% front load that reduced Rs.100 of investment, through an embedded sales charge, to Rs.97.75 getting invested. Some said the industry would die. But Sebi's focus on building transparency, reducing costs and working in consumer interest grew the industry from less than Rs.2.5 lakh crore in assets under management in 2006 to over Rs.87 lakh crore today. These changes arrived with the fund houses kicking and screaming. In fact, in 2009 a group of mutual fund agents approached the Delhi High Court to declare the abolishment of the front commissions of 2.25% embedded in the price of the product and a requirement to disclose commission as "ultra vires and illegal". The court dismissed the writ petition in the interest of consumer protection. I see a similar story playing out in the insurance space. An industrythat has resisted change, technology and consumer interest for decades is now screaming loudly with letters to the PM and other ways to exert power. The changes on costs and transparency that look imminent in the Indianinsurance industry should have begun 20 years ago, and incrementally,the market would have been in a very different place. But every attemptto bring transparency, consumerprotection, and lower costs wassuccessfully resisted, and the industry now finds itself facing either staying caught in a low-value, declining market or strong regulatory action. The government needs to look at evidence from the Indian financial sector to see the benefits of lower costs and transparency. Insisting that insurance is "different", and therefore, beyond the reach of regulatory action has harmed the growth of the industry. Both life and medical insurance are essential products in a household's financial life. By making them expensive, opaque and full of tricks and traps, the industry does itself, and the consumer, a disservice. Working with the regulator on the proposed changes might be a current bitter pill, but it is medicine that will finally give both energy and a growth spurt....