The Insurance Regulatory and Development Authority of India’s (Irdai’s) proposed distribution reforms, which seek to overhaul insurance distribution economics through lower expense of management (EoM) limits and product- and channel-specific commission caps, are directionally positive for consumers and will nudge the industry in the right direction, said Animesh Das, managing director and chief executive officer of ACKO General Insurance.

However, uniform EoM limits across companies could restrict growth opportunities for smaller and newer insurers, he said.

“The consultation paper is in the right direction. It is taking note of all the right things that should be done for the consumer and nudging the industry in the right direction,” Das said, cautioning that it will impact growth in the short term and the distribution models of certain companies that are operating in a certain way.

“They will have to revisit it or fix it in the right manner. From then, it (the industry) should grow from here because something which solves for the consumer benefits the stakeholder,” Das added.

Das said the insurance industry had remained largely stagnant in terms of growth for nearly a decade, adding that the proposed reforms could help correct existing practices and put the ecosystem on a stronger footing.

“The ecosystem was not making sense and now it can make sense. So, there will be a correction on the wrong practices and then it should grow. From a long-term point of view, it is great for the insurance ecosystem. But the current way of working has to be revisited and fixed,” he added.

Irdai has proposed lowering EoM limits for life and general insurers. For general insurers, it has recommended shifting the basis of calculation from gross written premium (GWP) to domestic gross direct premium income (GDPI) and reducing the limit from 30 per cent to 20 per cent over five years.

Das said uniform EoM limits, irrespective of company size, could leave smaller and newer insurers with limited room to grow.

ACKO General Insurance’s EoM stood at 38.69 per cent as of March 31, 2026, down from 47.71 per cent a year earlier, but still above Irdai’s current 30 per cent limit. In August 2026, Irdai barred ACKO from opening new places of business for six months for breaching EoM limits in FY25. According to the regulator, the insurer’s allowable EoM for FY25 was ₹650.37 crore against actual expenses of ₹985.15 crore, an excess of ₹334.78 crore.

“If the EoMs are the same for all the companies, there is very little scope for the smaller or the newer company to grow from there. There is likely to be representation from the smaller companies about it because it is going to impact them,” Das said.