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PB Fintech crashes 34% on proposed IRDAI insurance distribution norms
The selloff followed IRDAI’s proposal to tighten expense of management limits and reshape commission rules, which could raise distribution costs and pressure platform profitability.
PB Fintech’s shares plunged on Thursday, 24 September, falling to the 34% lower circuit at ₹1,247.40 after India’s insurance regulator, IRDAI, proposed sweeping changes to insurance distribution rules. The proposed framework includes a ban on certain “dark patterns” used on insurance and distributor websites, with IRDAI also targeting practices that require users to submit personal details before seeing pricing and product features. IRDAI defined dark patterns as interface or user-experience practices designed to mislead or influence users into taking actions they may not have intended.
IRDAI’s reforms are also expected to affect the economics of distribution by tightening Expense of Management (EoM) limits and restructuring the commission framework. Lower EoM limits could restrict what insurers spend on commissions and other distribution operating expenses, potentially altering distribution economics and increasing customer acquisition costs for distributors and insurance-focused platforms.
IRDAI said it would replace the existing fragmented distribution framework with three broad categories: Insurance Distribution Entities (IDEs), Insurance Distribution Persons (IDPs), and Market Infrastructure Institutions (MIIs). The regulator also proposed segment-wise commission caps, requiring commission rates to be disclosed in policy documents, and standardizing how product features, pricing, and quality information are presented to customers.