In India, the provision of the Insurance Act and the Companies Act governs the idea of an Insurance Web Aggregator. Moreover, a company should acquire an Insurance Web Aggregator License from the IRDAI (Insurance Regulatory and Development Authority of India) to operate as a Web Aggregator. There are several other companies for web aggregators, and you can check the same below.
Insurance Web Aggregators – Who are they?
In India, the Insurance Web Aggregator compiles, collects, and extends information concerning different insurance policies of various entities on a website. They perform as a mediator between people and the insurance company who are looking for insurance policies.
They are a business company that maintains a website providing information on different insurance policies provided by various insurance entities or companies. They are majorly governed by the IRDAI (Insurance Web Aggregator) Regulations, 2017.
Further, they gather data on various policies of insurance companies/entities and upload the same on an online portal. People wishing an insurance policy may go to this portal and compare the prices, products, and other information provided by insurance companies and then make a decision.
Following are the different roles of a Web Aggregator:
- Agreements are made between insurers & Web Aggregators. All vital information concerning the insurance products has to be provided;
- Web Aggregators can show only insurance products;
- Information concerning insurance products is shown on the portal or website;
- Compare products of insurance;
- Having an Insurance Web Aggregator License wouldn’t allow a Web Aggregator to deliver comparison and ranking of various insurance providers and their insurance products;
- Only Web Aggregators permit solicitation of policies;
- Solicitation is completed via an online website where information would be provided to the consumer directly;
Read our article:Insurance Broker License: Everything you need to know
Capital Necessities for an Insurance Web Aggregator
Following are the capital necessities to be fulfilled are as follows:
- The candidate must have minimum paid-up capital of Rs. 25 lakh;
- The shares of candidates held as capital should not be promised in any manner for protecting credit or other facilities and at all times be unobstructed;
- If they are a company which is incorporated under the Companies Act, 2013, the capital must be subscribed and issued in the equity shares form, IF it is an LLP (Limited Liability Partnership), then the contribution of partners to the Limited Liability Partnership, the contribution of partners to the Limited Liability Partnership must be in cash only.
Net-worth Criteria to be followed
Following is the net-worth criteria that should be fulfilled or followed by the candidate:
- The candidate should review the total worth half-yearly status on March 31st and September 30th every year. The candidate should report any non-compliance to the Insurance Regulatory and Development Authority of India within fifteen days. Then the candidate must restore the necessities in thirty days and confirm the same to the IRDAI;
- The candidate must submit the Net-Worth Certificate authorized by a Chartered Accountant (CA) to the IRDAI every year after completing books of accounts;
- The net worth of the candidate should not less than 100% of the minimum capital requirements;
- If the candidate is not able to maintain the net worth after thirty days, the Insurance Aggregation business should be stopped.
Compliances to be Fulfilled by Insurance Web Aggregator in India
The candidate must follow all the conditions as given below:
- The candidate can only ask for insurance and get many insurance policies commensurate with the resources;
- The candidate must notify the IRDAI of any false or misleading information in the earlier submitted documents;
- The candidate must comply with the code of conduct & condition given by the IRDAI from time to time;
- The Insurance Web Aggregator shall uphold records in the specified manner, which will capture policy-wise details and shall set up systems that allow regular access to such records by the authority;
- The candidate should obey the provisions of the IRDAI Act, 1999 and the guidelines & regulations issued thereunder.
Dos’ and Don’ts’ for Insurance Web Aggregator in India
The Web Aggregator Dos:
- Show information concerning insurers who have signed the agreement with the web aggregators;
- Perform and carry out activities for the purpose of lead generation for issuers;
- Make sure that the information systems, consisting of the aggregation portals, lead management system and date centres hosting website/portals or lead management system, are audited by the CERT;
- Make sure that the leads and other data are sent to the insurers and others through protected layer data encryption technologies;
- Make sure that the information systems comprising the aggregation website, data centres & lead management system hosting lead management system/portals complies with usually accepted information protection standards and procedures in force in India;
- Use only the Reserve Bank of India (RBI) licensed Payment Gateways for transfer & collection of premium to insurers when the web aggregator is certified by the insurer to gather premium on behalf of the insurer.
The Insurance Web Aggregator Don’ts:
- Show the information related to services or products of other financial organisations or FMCG on the website or portal;
- Operate the portal of other financial or commercial companies or use other social media platforms, etc. for products’ comparison;
- Show advertising of any form, either regarding any products or services comprising insurance services or products, other financial products or services in the website of the web aggregator;
- Function in any other way for the aim of transmitting leads to any company that is involved in the insurance business;
- Function several portals of tie-up with any other unapproved or approved, unlicensed companies or websites for lead generation, etc., subject to some exceptions.
Information gathered and fulfilled by the Insurance Web Aggregator is uploaded on the online website to make sure that the customers seeking insurance could easily access it. Moreover, all pre-compliance and post-compliances should be strictly fulfilled by all the Insurance Web Aggregators in India.