New Delhi, Oct. 3 -- A new car purchase often comes with the mandatory motor insurance policy arranged through the dealer or an automotive dealer-linked intermediary. While buyers are not required to purchase insurance through them, many still do so for convenience and to avoid the hassle of arranging a policy separately.

These parties receive hefty commissions on the policies they sell, putting the practice under scrutiny of the Insurance Regulatory and Development Authority of India's (IRDAI), which has proposed changes to limit such payouts.

According to the insurance regulator's consultation paper published last week, these distributors earned almost Rs.7,050 crore as commission on Rs.29,000 crore of motor insurance premium in FY 20...