Irdai commission curbs spark sharp selloff in insurers, banks and NBFCs

IRDAI's consultation paper proposing lower Expense of Management limits for life and general insurers and segment-level caps on commissions triggered a sharp selloff across insurance, banking, and NBFC stocks. PB Fintech plunged 36% in its worst single-day decline since its November 2021 listing; Max Financial Services fell 9.8%, HDFC Life declined 6.1%, ICICI Prudential Life dropped 4.2%, while the Nifty Bank index fell 2% and Nifty Financial Services index declined 2.4%. Per JM Financial and Jefferies, banks and NBFCs most dependent on insurance distribution income—Axis Bank, L&T Finance, Cholamandalam and Piramal Finance—face the largest earnings risk if the proposals are implemented.