PB Fintech Shares Fall After Insurance Rule Changes Proposed

PB Fintech shares dropped sharply on Thursday, 24 September, falling to the lower circuit at 1,247.40 rupees. The drop followed new draft rules from the Insurance Regulatory and Development Authority of India, known as IRDAI, that aim to change how insurance products are sold and distributed.

Proposed Changes

The draft paper suggests replacing the current setup with three categories: Insurance Distribution Entities, Insurance Distribution Persons, and Market Infrastructure Institutions. The regulator wants to ban deceptive online practices, known as dark patterns, where websites ask users for personal details before showing product features and pricing. Insurers would also need to show commission rates in policy documents.

Cost and Commission Rules

The reforms plan to tighten Expense of Management limits, lowering the limit for general insurers from 30 percent of gross written premium to 20 percent of domestic gross direct premium income over five years. The plans also introduce a varied commission structure instead of a single uniform approach, while stopping the forced bundling of products like credit life insurance and limiting agent incentives.