IRDAI’s 40-50% commission warning puts UAE clinic insurance sales under scrutiny

IRDAI chairman Ajay Seth told The Economic Times on 28 September 2026 that first-year insurance commissions of 40% to 50% are driving mis-selling, a warning UAE clinic operators should treat as a distribution-risk signal rather than an India-only issue.

The highest-stakes readers are clinic COOs, CFOs and insurer sales heads. Dubai clinics work inside a mandatory insurance system supervised by the Dubai Health Authority (DHA). Abu Dhabi and Al Ain providers answer to the Department of Health Abu Dhabi (DOH). Clinics in Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah operate under the Ministry of Health and Prevention (MOHAP) for health regulation, while the federal basic worker-insurance rollout involves MoHRE and MOHAP. The risk is practical: a patient who bought the wrong policy often becomes a rejected claim, a complaint and a front-desk escalation.

What IRDAI is testing

The Indian proposal links a familiar conduct problem to a specific incentive. Seth said IRDAI wants lower first-year commissions, more remuneration tied to policy renewal, and public information on products, insurers and distributors. He said one possible start date is 1 January 2027 or 1 April 2027, after draft regulations and consultation.

Mis-selling is arising because upfront sales commissions are too high.
Ajay Seth, chairman, IRDAI

That matters in the UAE because clinics, TPAs, brokers and insurers sit close to the patient’s buying decision. In Dubai, the DHA’s Essential Benefits Plan (EBP) framework sets the minimum cover for low-salary-band members. DHA circular GC 03/2024 set the 2025 EBP index rate at AED 550 to AED 750 per member per year, plus VAT and charges. DHA circular GC 06/2024 said participating insurer permits for 2025 run from 1 January 2025 to 31 December 2025.

Why UAE clinics should care

For a Dubai clinic CFO, the exposure is denial volume. A patient sold a cheap plan without understanding network limits may arrive at reception expecting covered care. If the clinic is outside the network, revenue becomes self-pay, delayed collection or a complaint. For a COO, the control point is the counter: reception teams should avoid steering patients toward policies unless the clinic has a documented arrangement, approved scripts and a named accountable manager.

The federal scheme makes the issue wider. The UAE Government portal says that from 1 January 2025, employers must buy health insurance before issuing or renewing residency permits for private-sector employees and domestic workers, and that the basic package costs AED 320 per year with no waiting period for chronic illnesses. That applies mainly where mandatory local health insurance had not already covered workers: Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah.

• Dubai: check DHA EBP insurer eligibility, network wording and sales material before accepting a policy-facing partnership.
• Abu Dhabi and Al Ain: route disputes through DOH rules; DOH says most health-insurance complaints take 30 to 60 working days, while suspected fraud and abuse cases can take 36 to 48 months.
• Northern emirates: confirm whether the patient is on the federal basic package, an employer group plan or a retail policy before quoting treatment prices.
• Insurers and brokers: keep commission disclosures, call recordings and product-comparison documents in one audit file.

What operators should implement now

UAE clinic groups should treat the IRDAI debate as a prompt for a 30-day sales-conduct review. Start with four files: insurer agreements, broker referral terms, reception scripts and complaint logs. If staff receive any benefit for directing patients to a plan, the benefit should be documented and approved by legal or compliance. If staff only explain accepted networks, the script should say that the clinic does not recommend a policy.

Large payers already face more scrutiny than small clinics. Daman publishes 2026 Abu Dhabi Basic Plan premiums showing AED 997.50 for low-income employees aged 18-40 and AED 9,358 for those aged 60 and above, excluding VAT. That age spread is enough to make mis-selling costly for older residents, sponsors and clinics that later chase unpaid bills. Thiqa, Daman’s UAE national programme in Abu Dhabi, has a different eligibility basis, so clinics should avoid using it as shorthand for all Abu Dhabi cover.

The practical test is simple. A patient should know the premium, network, co-payment, exclusions, chronic-disease treatment, maternity terms and complaint route before the first claim. Dubai providers should check DHA and ISAHD circulars. Abu Dhabi providers should check DOH insurer and complaint guidance. Northern emirates providers should check MOHAP licensing status and the federal scheme rules. Patients and operators can also use the UAE Open Healthcare Directory to verify licensed clinics and providers before selecting care.