Star Health wants India’s insurance regulator to leave mandated insurance policies out of the calculation behind proposed expenses-of-management limits, arguing the change would better capture the costs of selling retail coverage.
At the company’s Oct. 28 earnings call, Managing Director and Chief Executive Officer Anand Roy named motor third-party insurance, crop cover and government-sponsored health programs. He described them as driven by regulation or mandate and said those lines “should be removed from the base.” Roy argued their inclusion could make the calculation less representative of the cost of distributing consumer-facing policies.
The request centers on what regulators count in the base used to assess expenses-of-management, or EoM, limits. Roy said mandated business ideally should come at zero cost and that including it could obscure retail distribution expenses.
Roy said Star Health supported a common EoM framework for general insurers and standalone health insurers. He also backed commissions linked to renewals, saying the approach “removes incentive for commission-driven churn.” The company’s internal estimates showed a path toward meeting the proposed limits through operating leverage, productivity improvements, digitization and automation, he said.
The Insurance Regulatory and Development Authority of India (IRDAI) issued its two-part consultation paper, Recalibrating Economics of Insurance Distribution, on Sept. 23. The current rules are set out in the IRDAI (Expenses of Management, including Commission, of Insurers) Regulations, 2024.
IRDAI said Oct. 24 that it had received more than 650 comments and extended the feedback deadline to Oct. 31 from Oct. 25. Mint reported the carve-out could have a greater effect on multiline general insurers, which write more of those policies than Star Health. The consultation remains open, with comments due Oct. 31.
