New Delhi, Sept. 24 -- Banks, NBFCs and insurance stocks could be in for a shake-up as the Insurance Regulatory and Development Authority of India (IRDAI) proposes sweeping changes to insurance distribution.

The proposed rules could put pressure on commission income, distribution margins and new-business growth, with the impact likely to be felt most by financial companies that have built sizeable fee-income streams around insurance.

For banks, the biggest concern is the potential hit to bancassurance income, while NBFCs could face pressure because of their growing reliance on credit-linked insurance. Insurance companies and broker-led platforms could also feel the heat from lower commission caps, tighter expense-management limits and g...