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PB Fintech share price came under heavy selling pressure on Thursday, 24 September, after the Insurance Regulatory and Development Authority of India (IRDAI) proposed sweeping changes to insurance distribution rules, including a ban on certain “dark patterns” used on insurance and distributor websites. PB Fintech share price hit the 34% lower circuit at ₹1,247.40 during Thursday’s session as investors assessed the potential impact of the proposed regulatory changes on insurance distribution businesses. The proposed reforms could put pressure on the economics of insurance distribution by tightening Expense of Management (EoM) limits and restructuring the commission framework. Lower EoM limits could restrict the amount insurers may spend on commissions, distribution, and other operating expenses. This could potentially alter distribution economics and increase the cost of acquiring customers. For distributors and insurance-focused platforms, changes to commissions and distribution practices could therefore affect revenue and profitability. IRDAI has proposed replacing the existing fragmented distribution framework with three broad categories: Insurance Distribution Entities (IDEs), Insurance Distribution Persons (IDPs) and Market Infrastructure Institutions (MIIs). The regulator said the proposed framework is aimed at reducing insurance costs, widening coverage among underserved sections and supporting sustainable growth in the sector. The draft paper covers several areas, including rationalisation of EoM limits, segment-wise commission caps and restrictions on dark patterns. Under the proposed rules, insurers would have to provide customers with product features and pricing information without first requiring them to submit personal details. IRDAI has identified the current practice of asking users to provide personal information before accessing pricing and product details as a form of “dark pattern”. The regulator defines dark patterns as interface or user-experience practices designed to mislead or influence users into taking actions they may not have intended. The proposal also calls for commission rates to be disclosed in policy documents and for insurers to make product features, pricing and quality information available in a standard and easy-to-understand format. For general insurers, IRDAI has proposed shifting the basis for calculating EoM from gross written premium (GWP) to domestic gross direct premium income (GDPI). The proposed EoM limit would be reduced from 30% of GWP to 20% of GDPI over five years, with the reduction implemented progressively each year. According to IRDAI, the move is intended to lower the overall cost of insurance, expand the risk pool in general insurance and improve returns for policyholders in life savings products. The regulator has also proposed a more differentiated commission structure instead of a uniform approach. Commission limits would take into account factors such as the insurance segment, line of business, distribution channel, product complexity and effort involved in selling and servicing policies. Insurers and large distribution entities would also be required to disclose their commission policies and structures in a simple and accessible manner. The draft framework also proposes stronger measures to curb mis-selling. These include making suitability an enforceable obligation, documenting customer requirements and suitability for specified life insurance sales, and maintaining an audit trail. IRDAI has also proposed restrictions on incentives paid to agents, changes to the types of policies banks can sell, the use of MIIs for insurance sales, and the prohibition of compulsory bundling of insurance products, including credit life insurance. The proposed reforms could reshape the economics of insurance distribution by changing commissions, customer acquisition practices, and operating cost structures. For PB Fintech and other insurance distribution platforms, the eventual impact will depend on the final regulations and how insurers and distributors adapt to the new framework. The current proposals are part of a draft regulatory framework and may change following stakeholder feedback before the final rules are notified. Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions. Dhanya Nagasundaram works as a Content Producer at LiveMint, specializing in news related to financial markets, stocks, and business. With over eight years of experience in journalism and content creation, she has honed her skills in data-driven reporting and market analysis. Her focus is on monitoring stock trends, initial public offerings (IPOs), corporate news, policy shifts, and larger economic trends that affect investors and market players. <br><br> At LiveMint, Dhanya consistently writes and produces articles that make complex financial topics accessible to readers. She keeps a close eye on equity markets, commodities, and macroeconomic indicators, assisting audiences in comprehending how global and domestic events influence investment perspectives. Her stories frequently underscore emerging trends within sectors, the IPO market, company earnings results, and market strategies pertinent to both retail and institutional investors. <br><br> Before her tenure at LiveMint, Dhanya accumulated a wealth of professional experience at various companies, including MintGenie, Informist, Cogenics, Chary Publications, KPMG, and the Royal Bank of Scotland. These positions allowed her to establish a solid foundation in financial research, reporting, and content creation. <br><br> Throughout her career, she has explored numerous subjects such as trading strategies, commodities, IPOs, wealth generation, corporate profits, and macroeconomic indicators. Her background in both financial journalism and corporate settings has given her the ability to tackle stories with analytical rigor while ensuring clarity for her audience. Through her contributions, Dhanya strives to deliver insightful, trustworthy, and investor-centric financial content. 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