MUMBAI: The insurance regulator Irdai is considering an effort-based commission framework linking distributor payouts to selling and servicing effort, but life insurers fear lower commissions for group and embedded products could shrink coverage among low-income borrowers reached through banks, NBFCs and microfinance institutions.Theyet-to-be-released effort hierarchy may rank individual agents highest, followed by brokers, bancassurance distributors, corporate agents, with OEM channels such as auto dealers and web aggregators being at the bottom of the pyramid and hence having the lowest cap on commissions. The regulator has also begun seeking commission disclosures from intermediaries amid concerns that high payouts encourage mis-selling through institutional channels.Life insurers accept some institutional commissions may need review but warn a broad effort-based model could make low-premium and group covers unviable. In the industry, corporate agents and brokers accounted for over Rs 61,000 crore, or about 60%, of private insurers’ new business premium in FY25. These channels also distribute group credit-life cover linked to home, retail and microfinance loans. If commissions drop to the extent that distribution is not viable, industry officials say that sale of credit protection covers may drop.“India’s life insurance penetration stood at 2.7% of GDP in FY25, underlining the role of distribution channels in reaching customers who do not buy insurance directly,” an industry official said. He added that even if premiums are little affected, fewer people could be covered, undermining Insurance for All by 2047.