Insurance Web Aggregator License

Last Updated On: Feb. 21, 2021, 11:30 p.m.
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INSURANCE WEB AGGREGATOR LICENSE

INTRODUCTION:

A web aggregator company acts as an intermediary that maintains and supervises the website and offers price comparisons with features of different insurance products to the customer.

An insurance web aggregator company is approved and regulated by IRDA and is registered through the Companies Act, 2013. IRDA is responsible for ownership and approval of the website and gives information related to different insurance policies and products of various insurance companies. The Insurance web aggregators provide customers a single platform to compare quotes from different insurance companies on a single platform.

 

Role of a Web Aggregator

  • A web aggregator plays the following roles:
  • Compares insurance products.
  • Agreements are made between web aggregators and insurers. All relevant information related to insurance products has to be provided
  • Information related to insurance products is displayed on the website.
  • Having an Insurance Web Aggregator Licence would not permit a web aggregator to provide ranking and comparison of different insurance providers and their products.
  • Web aggregators can display only insurance products.
  • Solicitation of policies is allowed by web aggregators.
  • Solicitation is done through an online portal where information would be directly provided to the customer.

 

Why Insurance Web Aggregator Licence is required

  • Insurance Web Aggregator Licence is required so that insurance products can be shown to end customers.
  • To maintain the website related to Insurance Products.
  • To ensure that quality standards related to insurance products are maintained.

 

Who Regulates Insurance Web Aggregator Licence

The primary regulatory authority for the Insurance Web Aggregator Licence is the Insurance Regulatory and Development Authority of India (IRDAI). The Insurance Act 1938 and the Insurance Regulatory and Development Act 1999 are the regulations behind Insurance law. Apart from this, the Insurance Regulatory and Development Authority of India (Insurance Web Aggregators) Regulations, 2017, provide rules related to Web Aggregators.

 

Eligibility Criteria for Insurance Web Aggregator Registration

  • The Company must be incorporated under the Companies Act. The Web Aggregator must comply with all the FDI norms and other regulations set by the authority.
  • The main objective of the company must be mentioned as ‘Web Aggregator’ in the MoA or Memorandum of Association. Also, the company mustn’t engage in any other business and only stick to its objective of giving web aggregator services.
  • The applicant must not be a licensed or registered insurance agent, loss assessor, corporate agent, micro-insurance agent, surveyor, TPA, or an insurance broker registered under IRDA.
  • The company must have a designated principal officer to handle its day-to-day affairs and his/her educational qualification must be as stated in Schedule V of the act.

 

Capital Requirement for Web Aggregator License:

  • For an LLP or a company, the minimum paid-up share capital requirement is Rs. 2500000.
  • The paid-up share capital of an applicant company must be issued/subscribed in form of equity share.
  • For LLP’s the minimum contribution should be in form of cash only.
  • The issued share for the minimum capital requirement will remain unencumbered which means that these shares can’t be pledged as a security to get any credit.
  • The net worth of an Insurance web aggregator company must not fall below 100% minimum capital required for registration.
  • Status of net worth must be reviewed half-yearly on 30th September and 31st
  • A net worth certificate duly certified by a C.A. must be submitted annually to the regulating authority (IRDA).

 

Procedure to Get Insurance Web Aggregator License

  • An application for grant of insurance Web aggregator license and registration needs to be made to IRDA and the format for the same should be the same as prescribed in Schedule I – Form A of the act.
  • Payment for web aggregator licenses could be made through electronic fund transfer or by demand draft.
  • A non-refundable fee of Rs. 10000/- should be paid and the DD should be made in favour of ‘Insurance Regulatory and Developmental Authority’. The DD should be payable in ‘Hyderabad’.
  • An application should be made to carry out outsourcing and telemarketing services with the application form.
  • If the applicant fulfills all the criteria set by IRDA after inspection of the application and all the relevant documents, the authority will grant the applicant an insurance web aggregator license.
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