Holding Your Broker Accountable in India 2026: Service Agreements, Stewardship Reports and the Move to Fee-Based Mandates

For a long time the typical Indian corporate insurance buyer ran its broker relationship on trust and habit rather than on a written specification of what the broker would deliver. The broker placed the cover, helped at renewal, lent a hand on a claim, and was paid out of commission the buyer rarely saw quantified. As long as renewals went through and the occasional claim got settled, the arrangement felt fine. That model is now under pressure from two directions, and corporates that do not respond are leaving both money and protection on the table.

The first pressure is the maturing of corporate risk management. A mid-market or large company today buys a programme spanning property, liability and several specialty lines, each governed by its own policy wording, with material premium spend and material uninsured exposure if the programme is wrong. The board and the chief financial officer increasingly want to know what they are getting for the spend, how the broker is performing, and whether the advice is independent of how the broker is paid. An informal relationship cannot answer those questions because it never wrote them down.

The second pressure is regulatory. The reforms to how insurer expenses and intermediary remuneration are governed, principally the IRDAI (Expenses of Management, including Commission, of Insurers) Regulations, 2024 and the surrounding commission framework, have moved remuneration into the open and given buyers both the right and the means to see what their broker is paid and to choose how to pay. When commission is disclosed and capped within an overall expenses framework rather than hidden in the premium, the buyer can finally compare a commission-funded relationship against a fee-based one on the merits. The combination of a more demanding buyer and a more transparent remuneration regime is what makes the formal, accountable broker relationship the standard a serious corporate should now hold to.

The foundation of an accountable broker relationship is a written scope-of-services agreement that sets out what the broker will do, when, and to what standard, with service levels that make performance measurable. Without it, broker accountability is a matter of opinion; with it, the buyer can hold the broker to a specification and judge the relationship on evidence rather than on goodwill.

The agreement should specify the broker's deliverables across the whole cycle, not just the placement. A well-drawn scope typically covers:

• Risk and programme advice: an assessment of the buyer's exposures, advice on the programme structure, limits and retentions, and identification of gaps and uninsured exposures, refreshed at defined intervals rather than only when something goes wrong.
• Marketing and placement: how the broker approaches the market, how many insurers are approached, how quotes are presented and compared, and how the recommendation is justified, so the buyer can see the placement was tested rather than rolled over.
• Documentation and servicing: timely delivery of policy documents, the certificate of insurance where needed, endorsements and mid-term changes, and a clear record of what cover is in force.
• Claims service: the broker's role in notification, advocacy and follow-through, with response times and escalation defined, because claims service is where the broker earns its keep and where informal relationships most often disappoint.
• Renewal management: a renewal timetable that starts early enough to market properly, a renewal report, and a clear recommendation, so renewals are run as a process rather than a last-minute scramble.

The service levels turn these deliverables into measurable commitments: timeframes for delivering documents and certificates, response times for queries and claims notifications, the lead time before renewal at which marketing begins, and reporting cadence. Service levels matter because they convert vague expectations into things the buyer can check, and they give the buyer a basis to act if the broker underperforms. The agreement should also address the practical governance: who the named servicing team is, how the relationship is reviewed, and how either side can change or end the mandate. A scope-of-services agreement that names deliverables and service levels is the difference between a broker the buyer can manage and one the buyer can only hope about.

If the service agreement says what the broker will do, the annual stewardship report is where the broker evidences what it actually did, and it is the single most useful accountability tool a corporate buyer can insist on. The stewardship report is the broker's annual account to the client of the work performed, the programme as it stands, and the value delivered over the year, and a buyer that receives and reviews a real stewardship report is in a wholly different position from one that simply renews and hopes.

A stewardship report worth the name covers, at minimum:

1. The programme as placed: every policy in force, the insurer, the limits, the retentions, the premium, the key terms and any material changes over the year, so the buyer has a single authoritative view of its cover rather than a drawer of documents.
2. What was done during the year: the placements and renewals handled, the endorsements processed, the market exercises run, the advice given, and any gaps identified and addressed, so the buyer can see the broker's actual activity against the agreed scope.
3. Claims experience: the claims notified, their status, amounts paid and outstanding, and the broker's role in each, which is both a record of service and a vital input to the next renewal because claims experience drives pricing.
4. The market context and the year ahead: how the relevant markets are moving, what that means for the buyer's renewals, and the broker's recommendations for the coming year on structure, limits and strategy.
5. Remuneration: a clear statement of how the broker was remunerated over the year, whether by commission, fee or a combination, and how much, so the buyer can see what it paid for the service it received.

The stewardship report does several jobs at once. It gives the board and the CFO the evidence they increasingly demand that the insurance spend is being managed. It creates an annual checkpoint at which the buyer can assess the broker against the service agreement and decide whether to continue, re-scope or re-tender. And, by including remuneration, it closes the loop between what the broker is paid and what it delivers, which is exactly the transparency the regulatory reforms are driving toward. A buyer that does not receive a stewardship report should ask for one as a condition of the mandate; a broker that cannot produce one is telling the buyer something about how it runs the relationship.

How the broker is paid is no longer a detail the buyer can leave to default, because the remuneration model affects both the cost and the independence of the advice, and the 2026 disclosure framework finally lets the buyer make the choice with open eyes. There are two basic models, and the right one depends on the buyer's size, programme and preferences.

The two models

Under the commission model, the broker is remunerated by the insurer out of the premium the buyer pays, at rates set within the regulatory framework. The buyer pays no separate fee; the broker's income is embedded in the premium. The model is simple and familiar, but it has a structural feature the buyer should understand: because the broker's commission is a function of the premium and of which insurer is used, there is at least a theoretical tension between the broker's remuneration and the buyer's interest in the lowest sound premium and the best-suited insurer. Disclosure is what manages that tension by making the commission visible.

Under the fee model, the buyer pays the broker an agreed fee for the agreed scope of services, and the broker either rebates or offsets commission or arranges cover on a net-of-commission basis where that is available, so the buyer is not paying twice. The fee is explicit, negotiated against the scope, and independent of the premium and the insurer chosen, which removes the structural tension in the commission model and aligns the broker's pay with the service rather than with the size of the premium or the choice of carrier. For a buyer of any scale, the fee model also makes the cost of broking a known, budgeted number rather than an embedded one.

Why disclosure makes the choice real

The choice between the models only became a real one when remuneration became transparent. The expenses-of-management and commission framework, by bringing intermediary remuneration into the open and governing it within an overall expenses cap, gives the buyer the information to see what commission its programme generates and therefore to judge whether a fee would cost more or less and buy better-aligned advice. Before disclosure, a buyer could not meaningfully compare the models because it could not see what it was paying under the commission one. Now it can, and the comparison is concrete: the buyer can ask what the commission on its programme would be, what a fee for the same scope would be, and which gives it better value and better-aligned advice.

The regulatory direction of travel is doing more than enabling the fee-versus-commission choice; it is actively nudging mid-market corporate buyers toward explicit fee-based mandates, and understanding why helps a buyer get ahead of the shift rather than be caught by it.

The IRDAI (Expenses of Management) Regulations, 2024 and the related commission framework changed the economics and the transparency of intermediary remuneration. By moving from rigid product-level commission caps toward an overall expenses-of-management framework, and by reinforcing disclosure, the reforms made what brokers are paid both more visible and more accountable to the buyer. For larger and mid-market commercial buyers, that visibility changes the conversation: once a buyer can see the commission its programme generates, it naturally asks whether it would rather pay an explicit fee for a defined scope and capture the alignment and budgeting benefits, particularly on a programme where the commission is substantial.

Mid-market buyers are the segment where this shift bites hardest. The largest corporates have often already moved to fee or hybrid mandates with global or national brokers, and the smallest buyers may not generate enough premium to make a fee worthwhile. The mid-market sits in between: large enough that the commission on its programme is meaningful, and sophisticated enough that its CFO wants the alignment and transparency a fee delivers, but historically served on an informal commission basis. As disclosure makes the commission visible and as the broking market itself comes under fee and margin pressure, mid-market buyers are increasingly moving to explicit fee mandates tied to a defined scope of services, because that is where the transparency reforms point and where the value case is clearest.

For a mid-market buyer deciding how to respond, the sensible sequence is to put the relationship on a proper footing first and let the remuneration choice follow from it:

1. Define the scope of services and service levels you actually want from a broker, so you know what you are paying for.
2. Ask your incumbent broker to disclose the commission your current programme generates and to quote a fee for the defined scope.
3. Compare the two on cost and on alignment, recognising that the fee model removes the structural tension between the broker's pay and your interest in the best-suited insurer and the lowest sound premium.
4. Insist on an annual stewardship report regardless of the model, because accountability does not depend on how you pay but on whether the broker evidences what it delivers.
5. Re-tender the mandate periodically against the defined scope, so the relationship is tested on the market rather than renewed by inertia.

Where this becomes practical for the buyer and the broker alike is in the detail of the programme and the wordings the mandate is meant to manage: what cover is in force, how the terms compare across insurers, and whether the placement and renewal recommendations the broker makes stand up against the market. Sarvada gives commercial-insurance brokers and corporate risk teams structured, searchable access to insurer wordings and the intelligence around them, so the work a stewardship report describes (comparing terms across insurers, testing placements, evidencing the recommendation) can be done rigorously and shown to the client. Corporate buyers structuring an accountable, fee-based broker mandate and the brokers serving them can Request Access to evaluate the platform for programme management and renewal.