Overview of Insurance Web Aggregator Licence

Insurance web aggregator licence plays an important role in the insurance business. Insurance web aggregators act as facilitators, connecting individuals in search of insurance coverage with a variety of insurance policies offered by different companies. This is done through a centralised platform where comprehensive information about these policies is made available.

Operating as distinct business entities, these aggregators maintain websites that serve as a one-stop source for information on insurance policies. These aggregators diligently gather data on a wide range of insurance policies offered by different companies and consolidate it on a single online portal. This platform allows individuals interested in obtaining insurance policies to visit and efficiently compare products, prices and terms and conditions from various insurance providers. Ultimately, this empowers them to make informed and suitable choices for their insurance needs. It's similar to having a well-organised marketplace for insurance options at one's fingertips.

Regulating Authority for Insurance Web Aggregator Licence

In India, the Insurance Regulatory and Development Authority of India takes on the role of regulating and overseeing the Insurance Web Aggregator Licence. This responsibility is firmly grounded in a framework of relevant legal statutes, notably the Insurance Act of 1938, the Insurance Regulatory and Development Act of 1999 as well as the Insurance Regulatory and Development Authority of India Regulations from 2017.

These collective legal instruments form the basis of governance for insurance web aggregators operating within the nation. They establish clear guidelines and parameters, ensuring that these aggregators operate within specific rules and standards. This regulatory framework is designed to safeguard the interests of policyholders and uphold the overall integrity of the insurance industry.

Scope of Activities of Insurance Web Aggregator

The scope of activities for an Insurance Web Aggregator, holding a valid Insurance Web Aggregator Licence, typically includes one or more of the following activities:

1. Product Comparisons:

Displaying product comparisons on their website, allowing consumers to compare various insurance products easily. This involves presenting policy features, coverage details, premiums and other relevant information for informed decision-making.

2. Lead Generation:

Transmitting leads or customer inquiries to insurance providers. This involves passing on the contact details and preferences of potential customers to insurers, who then follow up with them to offer insurance solutions.

3. Online Insurance Sales:

Facilitating the sale of insurance policies online. This may involve providing an online platform for customers to explore, select and purchase insurance policies directly through the aggregator's website.

4. Telemarketing and Digital Marketing:

An Insurance Web Aggregator acts as a vital link between insurance companies and consumers, streamlining the process of accessing and purchasing insurance policies.

Essentially, their role includes simplifying the insurance purchasing experience for individuals and businesses. They achieve this by providing comprehensive information, aiding in policy selection and ultimately assisting in the acquisition of suitable insurance coverage.

Remuneration of Insurance Web Aggregator

The remuneration earned by an Insurance Web Aggregator is structured as follows:

1. No Charges for Lead Transmission:

Insurance Web Aggregators do not charge any fees or expenses for transmitting leads or customer inquiries from their platform to insurance providers. This service is generally provided without cost.

2. Flat Fee for Product Display:

The aggregator may earn a flat fee, not exceeding fifty thousand rupees per year, for each insurance product displayed on their website as part of their comparison charts or listings. This fee is typically paid by the insurance companies whose products are featured on the aggregator's platform.

3. Other Charges:

The regulatory authority, such as the Insurance Regulatory and Development Authority of India, may specify any other charges or fees that can be levied by Insurance Web Aggregators. These charges would be determined by the regulatory guidelines and could vary based on specific services or arrangements.

It's important to note that the remuneration structure and permissible charges for Insurance Web Aggregators are subject to regulatory oversight and may be defined and limited by the relevant authorities to ensure transparency and fairness in the insurance marketplace.

Functions Performed by Insurance Web Aggregators

Insurance Web Aggregators play various essential roles in the insurance industry. These functions include:

1. Providing Information:

Insurance web aggregators provide comprehensive and relevant information about various insurance products to potential customers. This helps businesses make calculated decisions about their insurance requirements.

2. Comparison of Insurance Products:

Web aggregators enable users to compare different insurance products available in the market. They present side-by-side comparisons of policy features, coverage, premiums and other relevant details.

3. Display of Information:

Aggregators display detailed information about insurance products on their websites. This information includes policy terms and conditions, coverage limits, exclusions and pricing details. This transparency helps customers understand what they are purchasing.

4. Assisting in Sales:

Insurance web aggregators facilitate the sale of insurance policies. They often provide online tools and calculators to help customers assess their insurance needs and make policy selections. Some aggregators may also offer assistance in the application and purchase process.

5. Solicitation of Policies:

Web aggregators actively solicit and generate leads for insurance policies. They attract potential customers to their platforms, where users can explore insurance options and, if interested, initiate the purchase process.

Eligibility Criteria for Insurance Web Aggregator Licence

The following are the basic eligibility criteria for insurance web aggregator licence:

1. Legal Structure Eligibility:

The candidate must be either an individual or a Company registered under Companies Act, 2013 or a Limited Liability Partnership (LLP) formed under LLP Act, 2008.

2. Business Scope:

The candidate's Memorandum of Association should explicitly state the business of web aggregation of Insurance Products as its primary activity.

3. Exclusive Focus:

The candidate should not engage in any business activities other than insurance web aggregation.

4. Exclusion of Certain Roles:

The candidate must not be registered as a corporate agent, insurance agent, micro-insurance agent, assessor, loss assessor, insurance marketer or any other insurance intermediary with the Insurance Regulatory and Development Authority of India.

5. No Referral Agreements:

There should be no referral agreements between the candidate and insurance providers.

6. Designated Website Requirement:

The candidate must have a designated website for conducting insurance web aggregation activities.

7. Qualified Principal Officer:

A designated Principal Officer with the minimum prescribed qualifications and relevant training, including passing the prescribed online test, is required.

8. No Previous Application Rejection:

The candidate's application for web aggregator registration should not have been rejected by the Authority in the preceding fiscal year.

Conditions for Insurance Web Aggregator Licence Issuance

The conditions for issuance of Insurance Web Aggregator Licence are:

1. Compliance with Insurance Product Requests:

The Insurance Web Aggregator must operate in compliance with the provisions of insurance product requests as provided by the law.

2. Adherence to Regulatory Requirements:

All registered web insurance aggregators must strictly adhere to the rules, regulations, notifications and instructions issued by the regulatory authority.

3. Timely Reporting of Material Changes:

Any significant changes in the material information submitted to the regulatory authority must be promptly reported.

4. Client Complaint Resolution:

An effective mechanism for addressing client complaints must be in place, with grievances addressed within 14 days of receipt.

5. Proper Record Maintenance:

Adequate systems for maintaining records of solicited insurance policies must be in place.

6. Compliance Guidelines:

The web aggregator must provide compliance guidelines to its Directors, Promoters, Shareholders and other relevant stakeholders.

Capital Requirements

The capital requirements are:
 

1. Minimum Capital Requirement:

Candidates seeking registration under IRDA (Web Aggregator) Regulations, 2017, must have a net worth of at least INR twenty-five lakhs.

2. Capital Structure for Companies:

If the proposed Insurance Web Aggregator is a company registered under Companies Act, 2013, the capital should be provided and subscribed as Equity Shares.

3. Capital Contribution for LLPs:

In the case of LLPs, partners' contributions should be in the form of cash.

4. Unencumbered Shares:

Shares should not be pledged in any form or manner to secure credit or any other obligations and must remain unencumbered at all times.

Net Worth Requirements

The net worth requirements are:

1. Maintenance of Net Worth:

After the issuance of the certificate of registration, the total assets of an Insurance Web Aggregator should never fall below 100% of the minimum capital requirements.

2. Regular Review of Net Worth:

Insurance Web Aggregators are required to review their total assets biannually on September 30th and March 31st of each year.

3. Annual Reporting:

A certified net worth certificate, verified by a Chartered Accountant, must be submitted to the Authority annually upon the conclusion of the books of records.

Procedure for Getting Insurance Web Aggregator Licence

The procedure for obtaining an Insurance Web Aggregator Licence is:

Application for Insurance Web Aggregator Licence

1. Application Form Submission:

The applicant must submit the application for getting Insurance Web Aggregator Registration Certificate as per Form A of the Regulations.

2. Application Fee:

Along with the registration application, a non-refundable fee of Rs.10,000 plus applicable taxes must be paid. This fee can be submitted via a Demand Draft or DD drawn in the favour of IRDAI or through Electronic Fund Transfer.

3. Special Permissions:

Applicants seeking permission for outsourcing and telemarketing activities must explicitly state this in the application form.

4. Application Requirements:

For being considered for the application, the following requirements have to be met:

• Eligibility criteria, as previously mentioned, should be fulfilled.
• Directors, partners, chief executive, managing director, key management personnel or also principal officer should not have any disqualifications under the Insurance Act.
• Prior applications from individuals directly or indirectly associated with the applicant should not have been rejected by IRDA.
• Promoters, partners or shareholders of the applicant should possess a sound financial position for making investments.
• The applicant must have a designated website capable of offering insurance web aggregation for insurance solicitation.

5. Timely Response to IRDA:

Any requests for information or clarification from IRDA must be responded to within 30 days.

6. Capital Requirements:

Capital requirements for the applicant are as follows:

• The applicant should have minimum paid-up capital of Rupees 25 lakh.
• For companies registered under the Companies Act 2013, the capital should be in the form of issued and subscribed equity shares.
• In the case of Limited Liability Partnerships (LLP), partner contributions should be made only in cash.
• The shares held as capital by the applicant should not be pledged in any manner to secure credit or any other facility and must remain unencumbered at all times.

7. Net Worth Requirements:

Net worth requirements for the applicant are as follows:

• The net worth of the applicant should never fall below mark of 100% of the minimum capital requirements.
• The applicant must review their net worth status on September 30th and March 31st of each year.
• Any non-compliance should be reported to IRDAI within 15 days and the applicant must restore the requirements within 30 days and confirm to IRDAI.
• If the applicant is not able to maintain the net worth even after 30 days, the insurance aggregation business should be halted.
• A Net Worth Certificate, duly certified by a Chartered Accountant (CA), must be submitted to IRDAI every year upon finalising the books of accounts.

Grant of Insurance Web Aggregator Licence

The certification allowing operation as an Insurance Web Aggregator is granted by the Insurance Regulatory and Development Authority of India upon successful application. This Insurance Web Aggregator Licence is issued in alignment with Form E, as detailed in Schedule I of the Regulations.

However, the issuance of this certificate is subject to the applicant fulfilling the stipulated regulatory prerequisites defined in the Regulations. Beyond meeting these regulatory standards, the IRDAI exercises judgment to ensure that granting registration to the applicant aligns with the best interests of policyholders. This dual consideration shows the regulatory process for becoming an Insurance Web Aggregator in India.

The certificate of registration that is issued by the IRDAI comes with the following conditions:

1. Adherence to Code of Conduct:

The applicant must adhere with the code of conduct and comply with the conditions stipulated by the IRDAI, which may be revised from time to time.

2. Limitations on Solicitation:

The applicant is only allowed to solicit insurance policies and can solicit and procure insurance policies in accordance with their available resources, with specific details provided in Form Q of the Regulations.

3. Compliance with Regulations:

The applicant is obligated to comply with the provisions of IRDAI Act, 1999 as well as the Regulations, Circulars, Guidelines and any other instructions issued by the IRDAI under the Act.

4. Reporting of Material Changes:

The applicant must promptly inform the IRDAI of any material changes in the information previously submitted or if any misleading or false information was provided.

5. Grievance Resolution:

The Web Aggregator is required to take appropriate measures to address grievances within 14 days of receiving them.

6. Record Maintenance:

The Web Aggregator must maintain records in the format specified by the Authority. These records should capture policy-wise and authorised verifier-wise details. Additionally, the Web Aggregator should establish systems that allow regular access to the records and details by the Authority for monitoring and regulatory purposes.

Documents Required for Insurance Web Aggregator Licence

When applying for an Insurance Web Aggregator Licence, the applicant must submit a comprehensive set of documents as outlined in Form B of the Regulations. All submitted documents should be self-attested by the Principal Officer. The required documents include:

1. Certificate of Registration or Incorporation:

Copy of the Certificate of Registration or Incorporation issued by the Registrar of Companies.

2. Memorandum and Articles:

Copy of the Memorandum of Association and Articles of Association or LLP Agreement, duly certified by a Chartered Accountant.

3. PAN Card:

Copy of the PAN Card of the company.

4. CVs and Qualifications:

Curriculum Vitae of the directors or designated partners of the LLP and the Principal Officer, along with their qualification certificates.

5. Website Details:

Website details include:

• Snapshots of the proposed website, along with proof of domain name registration.
• Confirmation of the hosting location for the website.
• A list of individuals responsible for or having control over the contents of the insurance web aggregator website.

6. Financial Documentation:

Certificate from a CA indicating the company's net worth and shareholding pattern.

Copies of Audited Accounts and Annual Reports for the previous three financial years.

7. Business Plan:

Business plan for the applicant for the next three years.

8. Infrastructure Information:

Details of infrastructure, including available IT infrastructure.

9. Organisational Chart:

Organisational chart showing functional responsibilities within the company.

10. Training and Examination Certificates:

 Training and Examination Certificates of the Principal Officer and authorised verifiers.

11. Fit and Proper Declarations:

 Details and declarations from the Principal Officer, directors, promoters, partners and key management personnel regarding their "fit and proper" criteria as stated in Form D of the Regulations.

12. Verification Access:

 Provide a user ID along with a temporary password to allow IRDAI's IT Department to verify the insurance web aggregation website or portal.

13. Notarised Self Certification:

 A notarised self-certification executed by two directors or designated partners certifying:

• That the Principal Officer and the directors of the company have not been found to be of unsound mind or convicted of certain specified offenses in the past five years.
• That none of the employees/directors of the company holds employment/directorships or represents any other insurance-related entity.
• That the net worth of the company will not fall below Rs.25 lakh during the certificate of registration period.
• That the applicant, its directors and the Principal Officer are not registered as various types of insurance intermediaries.
• That the applicant company, its directors and the Principal Officer are not related parties of other insurance-related entities at the time of application and will maintain the same status during the certificate of registration period.

Validity of Insurance Web Aggregator Licence

The Insurance Web Aggregator Licence which has been issued by the Insurance Regulatory and Development Authority of India is valid for a period of three years from the date of its issuance and the renewal of the licence must be initiated 30 days before the expiration of it.

Renewal of Insurance Web Aggregator Licence

To renew the Insurance Web Aggregator Licence, the following procedures and timelines apply:

1. Application for Renewal:

The insurance web aggregator must apply for the renewal of registration to IRDAI using Form F. This application should be submitted at least 30 days before the current registration's expiry. However, the web aggregator also has the option to apply for renewal up to 90 days before the expiration, following the specific procedure outlined by IRDAI.

2. Necessary Documents and Charges:

To initiate the renewal of Insurance Web Aggregator Licence, the applicant must furnish the documents specified in Form G of the Regulations. Alongside, a renewal fee of Rs.25,000, plus applicable taxes, needs to be submitted.

3. Penalty for Late Renewal:

In the event that the renewal application doesn't reach IRDAI within 30 days following the registration's expiration, an extra fee of Rs.100 per day will be levied. However, IRDAI might still consider renewal applications within a 60-day window from the date of registration's expiration, subject to the applicant paying an additional fee of Rs.750.

4. Renewal Approval:

IRDAI will grant the renewal of registration after verifying that the web aggregator complies with all the conditions specified in Form H of the Regulations.

5. Refusal of Renewal:

IRDAI may refuse to renew the registration if it is determined that the web aggregator did not engage in any insurance business during the entire or part of the previous registration period.

Why Choose StartupFino for Insurance Web Aggregator Licence in India?

Insurance web aggregators serve as intermediaries that simplify the insurance buying process by offering information, comparisons and access to a wide range of insurance products. Their role is to make insurance more accessible and understandable for consumers while assisting in policy sales and solicitation.

StartupFino is a company that specialises in offering complete services forInsurance Web Aggregator Licence. We can help you with everything from providing advice in the initial phase to ensuring that you meet all the necessary requirements and compliances for your Insurance Web Aggregator Licence and registration.