Shares of life insurance companies plummeted, with declines of up to 4%, following reports that the insurance regulator IRDAI is considering capping the share of bancassurance business from parent banks to 50%. Currently, parent banks account for 85-95% of the bancassurance business for firms like HDFC Life, Max Life, and SBI Life, while ICICI Bank represents 50% for ICICI Prudential. The regulator's move aims to address concerns over the heavy reliance of insurers on bancassurance.
