New Delhi, Sept. 24 -- Buying motor insurance could change significantly if IRDAI's proposed distribution reforms take effect. The regulator wants customers buying a new vehicle to be given a clearer option to purchase insurance through digital platforms, while also proposing changes to the way motor dealers distribute policies and earn commissions.

The proposals come as IRDAI's data shows a sharp increase in motor insurance commissions. Motor insurance premiums grew by around 34% between FY23 and FY25, while commissions increased by around 259%, according to the regulator's consultation paper on "Reforms for Recalibrating Economics of Insurance Distribution."

IRDAI said the average commission rate in motor insurance was around 24% in F...