You are currently viewing Everything You Must Know About Insurance Web Aggregator License

Everything You Must Know About Insurance Web Aggregator License

Loading

Last Updated on July 8, 2024 by Kanakkupillai

Insurance web aggregators are intermediaries between individuals seeking insurance policies and insurance companies. They compile and present information about various insurance policies from different companies on a website. These aggregators play a crucial role in facilitating easy comparison of insurance products, aiding potential policyholders in making informed decisions.

Controlled by the Insurance Regulatory and Development Authority of India (Insurance Web Aggregators) Regulations, 2017, these entities maintain websites that showcase a range of insurance policies available in the market. By collecting policy data from multiple insurers and presenting it on a single online platform, insurance web aggregators enable visitors to compare product features, prices, and terms, empowering them to choose the most suitable insurance policy for their needs.

Roles Undertaken by Insurance Web Aggregators

An insurance web aggregator fulfills the following functions:

  • Disseminating pertinent details concerning insurance products.
  • Facilitating a comparison of diverse insurance offerings.
  • Presenting comprehensive information about insurance products on their online platform.
  • Aiding in the process of insurance policy sales.
  • Engaging in the solicitation of insurance policies.

Mandatory Guidelines for Insurance Web Aggregators

The regulations set forth by IRDA for Insurance Web Aggregators comprise the following directives:

  • Prohibition of endorsing services and offerings from particular insurers.
  • Permission to offer products solely based on the Analysis Report.
  • The requirement to display the pricing of each product.
  • Restriction on presenting rankings, ratings, or labeling products as best-sellers.

Eligibility Requirements for Insurance Web Aggregator License

To secure the License or Registration Certificate as an Insurance Web Aggregator, aspiring applicants must meet the following stipulations:

  • The applicant must be a company duly registered against the Companies Act, 2013 or a Limited Liability Partnership (LLP) registered under the Limited Liability Partnership Act, 2008. It is important to note that LLP partners must be Indian residents.
  • The company’s or LLP’s Memorandum of Association (MoA) must explicitly outline insurance web aggregation as its primary business activity.
  • The applicant should exclusively engage in insurance web aggregation and refrain from conducting other business.
  • The applicant must not hold registration or engagement as a corporate agent, surveyor and loss assessor, insurance/microinsurance agent, Third Party Administrator (TPA), insurance marketing firm, or any other intermediary as per the regulations of the Insurance Regulatory and Development Authority of India (IRDAI).
  • A referral arrangement with an insurer is prohibited for the applicant.
  • The designated Principal Officer must possess the qualifications specified in Form C of the Regulations and have undergone requisite training and examinations mandated by the IRDAI.
  • The fair and valid criteria, as outlined in Form D of the Regulations, must be met by the Principal Officer, promoter, director, partner, shareholder, or key managerial personnel.
  • The individual (Authorized Verifier) employed by the insurance web aggregator or a telemarketer involved in insurance procurement and solicitation through Telemarketing and Distance Marketing mode must have completed examinations specified by the IRDAI.
  • The applicant must adhere to the obligations and code of conduct specified in Form V and Form W of the Regulations.
  • The IRDAI must not have rejected the applicant’s application for a license/registration certificate, and no application withdrawal should have occurred for any cause during the prior financial year from the date of application.

Application Process for Insurance Web Aggregator License

To obtain the Insurance Web Aggregator Registration Certificate, the applicant is required to follow these steps:

  • Complete and apply Form A of the Regulations.
  • Include a non-refundable fee of Rs. 10,000 plus applicable taxes along with the application. This payment can be made via a Demand Draft (DD) pulled in favour of IRDAI or via Electronic Fund Transfer.
  • Applicants seeking permission to work in outsourcing and telemarketing should indicate their intention in the application form.
  • Ensure compliance with the following requirements for application consideration:
  • Meet the eligibility criteria as outlined above.
  • Directors, chief executives, partners, managing directors, key management personnel, or principal officers should not have any disqualifications under the Insurance Act.
  • No previous applications related to individuals connected directly or indirectly to the applicant should have been rejected by the IRDA.
  • Promoters, partners, or shareholders of the applicant should possess a strong financial standing for investment purposes.
  • Maintain a designated website capable of providing insurance web aggregation for insurance solicitation.
  • Any requested information or clarification from IRDAI should be provided within 30 days.
  • Fulfill the prescribed capital requirements:
  • The applicant must have a minimum paid-up capital of Rs. 25 lakhs.
  • For businesses enlisted under the Companies Act 2013, the capital should be issued and subscribed to equity shares. In the case of an LLP, partner contributions should be made only in cash.
  • Capital shares held by the applicant must not be pledged for credit or any other purpose and should remain unencumbered.
  • Meet the stipulated net worth requirements:
  • The applicant’s net worth should not exceed 100% of the minimum capital requirements.
  • Review net worth status biannually on September 30th and March 31st of each year. In case of non-compliance, report to IRDAI within 15 days and restore requirements within 30 days.
  • If net worth cannot be maintained within 30 days, cease insurance aggregation operations.
  • Annually submit a Net Worth Certificate, certified by a Chartered Accountant (CA), to IRDAI after finalizing the books of accounts.

Issuance of Insurance Web Aggregator License

The Insurance Regulatory and Development Authority of India (IRDAI) will issue the registration certificate to the applicant for operating as an Insurance Web Aggregator. This certificate, denoted as Form E in Schedule I of the Regulations, is granted once the applicant meets the stipulated requirements outlined in the Regulations. The decision to grant registration is based on IRDAI’s assessment that it would be in the best interest of policyholders.

The registration certificate from IRDAI is subject to the following conditions, which the applicant must adhere to:

  • Comply with the code of conduct and conditions specified by IRDAI, which may be updated periodically.
  • Engage in insurance solicitation and procurement of insurance policies within the scope of available resources, as detailed in Form Q of the Regulations.
  • Adhere to the provisions of the IRDAI Act, 1999, the Circulars, Regulations, Guidelines, and any additional instructions given by the authority.
  • Promptly inform IRDAI of any significant changes or instances of misleading or false information in the previously submitted documents.
  • Ensure timely resolution of grievances within 14 days of receiving them.
  • Maintain records in the format specified by the Authority, including policy-wise and authorized verifier-wise details. Implement systems to facilitate regular access to these records and details by IRDAI.

Required Documents for Insurance Web Aggregator License

The applicant seeking an Insurance Web Aggregator License is required to provide the following documents along with the application, as specified in Form B of the Regulations. All documents must be self-attested by the Principal Officer. The required documents include:

  • Copy of Certificate of Registration or Incorporation issued by the Registrar of Companies.
  • Copy of Memorandum of Association and Articles of Association or LLP Agreement, duly certified by a Chartered Accountant (CA).
  • Copy of PAN Card of the company.
  • Curriculum vitae (CVs) of directors or designated partners of LLP and the principal officer, along with qualification certificates.
  • Snapshots of the proposed website, along with proof of domain name registration, confirmation of hosting website location, and a list of individuals responsible for or controlling the contents of the insurance web aggregation website.
  • Certificate of Net Worth and shareholding pattern issued by a CA, along with copies of Audited Accounts and Annual Reports for the last 3 financial years.
  • Business plan for the applicant for the upcoming three years.
  • Details of available infrastructure, including IT infrastructure.
  • Organizational chart depicting functional responsibilities.
  • Training and Examination Certificates of the principal officer and authorized verifiers.
  • Details and declarations related to “fit and proper” criteria, as stated in Form D of the Regulations, for the principal officer, directors, promoters, partners, and key management personnel.
  • A user ID and temporary password (view permission only) are required by the IRDAI IT Department to verify the insurance web aggregation website/portal under a sealed cover.
  • Notarized Certification executed by two directors or designated partners of the LLP, certifying:
  • That the Principal Officer and company directors are not adjudicated as of unsound mind by a court of competent jurisdiction, nor have they been found guilty of specified criminal offenses in the past five years.
  • None of the company’s employees/directors holds employment or directorships in any other insurance-related entity.
  • The company’s net worth will not fall below Rs. 25 lakhs during the certificate of registration period.
  • The applicant, its directors, or the Principal Officer are not registered as a corporate agent, insurance agent, microinsurance agent, surveyor, TPA, insurance broker, loss assessor, or other insurance intermediaries under IRDAI regulations.
  • That the applicant company, its directors, or the Principal Officer are not related parties of insurers, corporate agents, insurance brokers, TPAs, micro-insurance agents, loss assessors, or other insurance intermediaries at the time of application submission and will maintain this status during the certificate of registration period.

Duration of Insurance Web Aggregator License

The Insurance Web Aggregator License/Registration Certificate granted by the IRDAI will remain valid for three years from the date of issuance. Renewal of the license can be sought 30 days before its expiration.

Renewal Process for Insurance Web Aggregator License

To renew the registration of an insurance web aggregator, the entity must submit an application to the IRDAI using Form F at least 30 days before the current registration’s expiration date. Alternatively, renewal can be sought up to 90 days before expiry by IRDAI guidelines.

The renewal application should be accompanied by documents outlined in Form G of the Regulations and a renewal fee of Rs.25,000 plus applicable taxes.

Should the IRDAI not receive the renewal application within 30 days of the registration’s expiration, an additional fee of Rs.100 per day will be levied. IRDAI may accept renewal applications up to 60 days after the registration’s expiration upon payment of an additional fee of Rs.750.

IRDAI will grant renewal upon confirming the web aggregator’s compliance with the conditions stated in Form H of the Regulations. However, suppose it’s determined that the web aggregator did not conduct any insurance business during or part of the preceding registration period. In that case, renewal may be denied by the IRDAI.

Compensation Received by Insurance Web Aggregator

To ensure transparency and equitable practices, specific guidelines govern the compensation these aggregators receive for their services. These guidelines delineate the remuneration framework, covering aspects such as lead transmission, product display, and additional charges. Delving into the compensation received by Insurance Web Aggregators unveils a system designed to uphold fairness and provide consumers with a comprehensive view of their insurance options.

  • No fees shall be levied for forwarding leads from the insurance web aggregator to the insurer.
  • A fixed fee shall be payable to them, not exceeding fifty thousand per annum, for each product displayed by the Insurance Web Aggregator in its comparison charts on the website.
  • Any additional fees as specified by the regulatory authority.

Compulsory Directives for Insurance Web Aggregators

IRDA’s directives for Insurance Web Aggregators include a ban on endorsing specific insurers’ services, authorization to sell products based on the Analysis Report, a mandate to display product pricing, and restrictions on showcasing rankings, ratings, or labeling products as best-sellers. The stipulations provided by IRDA for Insurance Web Aggregators encompass the following:

  • Prohibition from endorsing services and offerings of specific insurers.
  • Authorization to vend products solely based on the Analysis Report.
  • Obligation to exhibit the pricing of each product.
  • Restriction on showcasing rankings, ratings, or designating products as best-sellers.

Opting for Kanakkupillai presents a compelling choice due to its exceptional attributes and client-focused approach. With a skilled team of professionals with vast experience across multiple domains, Kanakkupillai ensures tailored services catering to individual business requirements. The comprehensive range of offerings, spanning company registration, taxation, compliance, legal, financial, and advisory services, positions Kanakkupillai as a convenient one-stop solution. Through a commitment to transparent pricing, timely delivery, and technological efficiency, Kanakkupillai streamlines processes and empowers businesses to thrive. With a strong track record of serving a diverse clientele and positive client testimonials, Kanakkupillai stands out as a trusted partner in achieving business growth and regulatory compliance.

Kanakkupillai

Kanakkupillai is your reliable partner for every step of your business journey in India. We offer reasonable and expert assistance to ensure legal compliance, covering business registration, tax compliance, accounting and bookkeeping, and intellectual property protection. Let us help you navigate the complex legal and regulatory requirements so you can focus on growing your business. Contact us today to learn more.