New Delhi, Oct. 8 -- IRDAI has proposed changes to insurance commission structures in its latest consultation paper, including revised limits on distributor remuneration and an additional allowance for business from underserved areas. The proposed changes have raised concerns over whether lower payouts could make it harder for insurers and intermediaries to economically serve customers in Tier 2, Tier 3 and rural markets.

For first-time insurance buyers in smaller towns, the issue goes beyond the price of a policy. Local advisors often help customers compare products, understand exclusions and waiting periods, complete documentation and navigate claims. If lower payouts make smaller-ticket policies less viable for distributors, it could ...