In a landmark move to reform the insurance sector, the Insurance Development and Regulatory Authority (IDRA) has suspended the licenses of all individual agents in the non-life insurance category, effectively ending personal agent-based commissions.

The decision comes into effect tomorrow, January 1, 2026. From the first day of the new year, non-life insurance companies will no longer have any legal basis to provide commissions to individual agents for securing business.

The regulatory body issued a circular on December 23, 2025, announcing the suspension of all personal insurance agent licenses under non-life insurers. IDRA clarified that since these licenses will no longer be valid starting January 1, any payment of commissions or financial benefits to these individuals will be prohibited.

The directive aligns with Section 58(1) of the Insurance Act, 2010, which states that no commission, remuneration, or honorarium can be paid to any person or institution other than an authorized insurance agent. By suspending these specific licenses, the authority is enforcing a stricter legal framework to curb financial irregularities.

IDRA has warned that any insurance company found violating this directive by paying commissions to unauthorized individuals will face severe disciplinary action under existing insurance laws and regulations.

All non-life insurers have been formally requested to ensure full compliance with the commission ban. Industry experts believe this move will reduce hidden costs and financial mismanagement within the sector.

Besides, eliminate unhealthy competition. Strengthen institutional integrity. Move the industry toward a more professional and corporate-driven business model, said the IDRA.