Explainer| IRDAI proposes overhaul of Bancassurance model with fee-based system

Under the current system, for an insurance policy with an annual premium of ₹1,000, a bank earns an 18% commission, or ₹180, while the insurer retains ₹1,000, costing the policyholder ₹1,180. The IRDAI’s new framework would eliminate commissions, with banks instead collecting a transaction fee directly from the policyholder and remitting the premium to the insurer.

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