New Delhi, Oct. 2 -- Several insurance companies, insurance distributors and select banking stocks have witnessed large-scale selling pressure after the Insurance Regulatory and Development Authority (Irdai) proposed lower commission caps and tighter expense norms for insurance distribution.

Investors feared these measures could reduce insurers' profitability and cut fee income for banks and non-banking financial companies (NBFCs) that earn commissions through bancassurance, particularly on loan-linked insurance products.

The proposals also restrict certain sales practices, potentially affecting distribution economics.

The market, therefore, quickly priced in the possibility of lower future earnings across insurers, distributors and fi...