Misselling misunderstood: The regulator’s proposal is tantamount to addressing the symptom, while ignoring the cause

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In FY25, the Indian insurance sector experienced significant premium growth while maintaining flat penetration rates. However, complaints regarding misselling and customer dissatisfaction have risen. The Insurance Regulatory and Development Authority of India is considering reintroducing commission caps to combat these issues. Previous successful strategies in other countries suggest combining commission ceilings with clawbacks to incentivize appropriate sales.