MUMBAI: Finance companies have sought a five-year transition period to reduce insurance commissions and permission to pay premiums directly to insurers on behalf of borrowers.The industry body of NBFCs has told the Insurance Regulatory and Development Authority of India (IRDAI) that the proposed commission caps of 2% for credit life and 5% for credit health insurance would make credit-linked insurance distribution unviable, given distribution costs are about 32% of the premium.NBFCs have proposed a phased reduction in commissions from the current 45-49% to 25% over five years, warning steep cuts could force lenders to exit the insurance distribution business.Live Events"Just like the manufacturers have been provided with a 5-year glide path for expense of management alignment, NBFCs distributors should also be provided with a similar path on attenuation of commission structures over a 5-year period," said FIDC in a letter to IRDAI adding NBFCs would voluntarily bring down the commission structures from the current high 40s to an acceptable 25% over a period of 5 years.ET BureauFIDC said that the proposed commission structure overlooks the customer acquisition, technology, compliance and servicing costs borne by lenders.