India, Sept. 28 -- Riya, 27, wants to buy her first family-floater health cover on Policybazaar. But before she sees a single price, the app asks for her name, phone number and city.

Within minutes, her phone starts ringing. She settles on a plan with an annual premium of Rs.20,000.

Riya never sees the other half of the transaction. In this case, the insurer, the one that Riya selected, pays Policybazaar a small commission from the Rs.20,000 premium.

And of course, there could be other commissions involved such as renewal or lack of claims, but this is primarily the economic model behind digital insurance distribution.

All that could change if the insurance regulator has its way. The Insurance Regulatory and Development Authority (IRD...