Hospital tariff controls, minimum commissions: What insurance agents want from Centre

The association, which claims to represent 1.6 million individual general insurance agents, has also raised concerns over proposed Insurance Regulatory and Development Authority of India (IRDAI) reforms to tighten expense-of-management (EOM) limits. It warned that excessive cost-cutting could affect customer service and agents' livelihoods. "The primary driver of rising premiums is the industry’s steep 84% to 87% incurred claims ratio, fuelled by systemic price inflation," The Indian Express quoted the association as saying.

It also called for regulatory attention to the costs insurers incur when settling claims. Agents call for hospital, garage billing reforms According to IE, the CGIAAI alleged that hospitals often charge insured patients substantially more than cash-paying patients for comparable treatment. It also claimed that automobile workshops inflate repair estimates when bills are submitted to insurers. The association argued that such practices increase insurers' claim payouts and eventually put pressure on policyholders through higher premiums.

However, it did not provide a detailed breakdown of the alleged overcharging or quantify how much hospital tariffs and repair costs contribute to premium increases. The CGIAAI has urged the government and IRDAI to address these costs directly rather than focus primarily on insurance distribution expenses. The cost of delaying Rs 1 crore cover EOM limits raise concerns over agent network The association has opposed proposed EOM caps of 25% within two years and 20% within five years, arguing that the changes could put public sector general insurers and mid-sized companies under pressure.

The CGIAAI warned that tighter expense limits could lead insurers to shut physical branches in semi-urban and rural areas, potentially concentrating the market among a smaller number of large private insurers and reducing consumer choice. It said individual agents earn an average commission of 12% to 13% while bearing operating costs, particularly in smaller towns and rural areas. The association maintained that agents help policyholders navigate documentation, disputed bills and claim settlements, especially during medical emergencies and road accidents.

"When a family is stranded at a hospital billing counter or standing by a damaged vehicle on a highway, an automated chatbot or call centre algorithm cannot replace the local insurance agent who personally visits, advocates, and secures fair settlement," the association's leadership reportedly said. Association flags conflicts of interest The CGIAAI also raised concerns over potential conflicts of interest if hospitals and automobile workshops are permitted to sell insurance policies.

It argued that such arrangements could create incentives for higher treatment or repair bills and lead to disputes during claim settlement. The association called for restrictions on aggressive bancassurance cross-selling, suggesting that banks should limit insurance sales to credit-linked risk protection. It further warned that forcing more than half of individual agents out of the profession could weaken the grassroots service network used by elderly, rural and semi-urban policyholders.

Minimum commission, digital access among demands Among its demands, the association has sought a statutory minimum commission for retail agents equivalent to 75% of the prescribed commission ceiling, along with a baseline fee of Rs 250 for every retail or motor policy. It has also called for digital platforms such as Bima Sugam to enable agents to onboard customers, renew policies and provide servicing support rather than bypass them.

The CGIAAI has sought structured consultations with the Finance Ministry and IRDAI before the proposed regulations are finalised. It has also called for contributory group life and health insurance arrangements for individual agents. The representation brings the debate over insurance distribution costs alongside a broader question about claim expenses and consumer protection. While the association has called for tighter scrutiny of hospital and motor repair billing, it has not provided a quantified assessment of the savings standardised tariffs could deliver or their potential impact on premiums.