New Delhi, Sept. 27 -- The much-awaited distribution reforms are finally here.

The Insurance Regulatory and Development Authority of India (Irdai) has proposed a three-pronged overhaul of insurance distribution: product- and channel-specific commission caps, three categories of distributors, and tighter expenses of management (EoM) limits with a five-year glide path. EoM shows how much an insurer can spend as a percentage of its premium income.

The classification of distributors is intended to ensure lower payouts for institutional distributors than individual agents. The three categories are insurance distribution entities (IDEs), such as banks, brokers and web aggregators; insurance distribution persons (IDPs), such as agents, specifi...