Start Insurance Web Aggregator Website: A Complete Guide

In India, an Insurance Web Aggregator primarily deals in providing services concerning the Insurance Products offered by Insurance Companies. These entities allow a buyer to compare the pricing and features of different insurance products. Also, it shall be considerate to state that due to the increasing popularity, nowadays, budding capitalists and financiers tend to start Insurance Web Aggregator Website, for which they need to obtain Insurance Web Aggregator License from IRDAI.

In this blog, we will be discussing in detail concerning the concept and process to start Insurance Web Aggregator Website in India.

Concept of Insurance Web Aggregator

The term Insurance Web Aggregator means an entity that deals in collecting, assembling, and maintaining information concerning the different insurance products offered by insurance companies.

Further, all the information gathered is then made available on its official website for easy accessibility and approachability by consumers seeking insurance services.

The operations and working of an Insurance Web Aggregator are administered by the regulations laid down by the Insurance Regulatory and Development Authority of India (IRDAI).

Also, it shall be relevant to state that an Insurance Web Aggregator is administered by both Companies Act 2013 and Insurance Act 1938.

Role of Insurance Web Aggregator

The key roles of an Insurance Web Aggregator can be summarised as:

• To Boost the Online Market for Insurance Products;
• To Enhance Customer Experience;
• To Assist Customer in the Process of Sale;
• To Infuse Transparency in Insurance Sector;

Also, Read: Concept and Process of Web Aggregator License in India

Governing Laws for Insurance Web Aggregator

The laws governing the operations and management of an Insurance Web Aggregator are as follows:

• The Insurance Act 1938;
• The Insurance Regulatory and Authority of India (Insurance Web Aggregator) Rules 2017;

Guidelines to Start Insurance Web Aggregator Website in India

The guidelines to start Insurance Web Aggregator Website in India are as follows:

• An Insurance Web Aggregator is not allowed to promote any service other than offered by a particular insurer;
• It can sell products based on the Analysis Report;
• It needs to display the pricing of each product on a mandatory basis;
• An Insurance Web Aggregator is prohibited from showcasing ranks, ratings, and highlights of the best-selling insurance products;

Duties of Insurance Web Aggregator

The duties of an Insurance Web Aggregator are as follows:

• Display details regarding the Insurance Products offered on Digital Platforms;
• Must offer a facility to compare different insurance products on their portal;
• Facilitate Comparison in an unbiased manner;
• Transmit leads generated by way of digital platforms to the concerned insurance company;
• Sell insurance products through Telemarketing Services;
• Solicit Insurance Products on the basis of the leads generated from the website;

Conditions to Start Insurance Web Aggregator Website in India

The Conditions to start insurance web aggregator website in India are as follows:

• Applicant needs to register itself as a company under the Companies Act 2013 or as a Limited Liability Partnership under the LLP Act 2008;
• The Memorandum of Association must state that the entity will be dealing in the activity of Web Aggregation of Insurance Products;
• The said entity cannot engage in any other business other than one mentioned as an object;
• An Insurance Web Aggregator cannot appoint the people as follows:

1. Insurance Agent;
2. Company Agent;
3. Micro Insurance Agent;
4. Third Party Administrator;
5. Surveyor;
6. Loss Assessor;
7. Insurance Marketing Firm, or;
8. Any other Insurance Intermediary;

• Must have a Referral Association with an Insurer;
• Need to have a dedicated platform to carry out the activities of an Insurance Web Aggregator;
• The Principal Officer appointed need to possess the prescribed qualification and experience;
• It is mandatory for the Principal Officer, Shareholders, Promoters, Directors, and Key Managerial Personnel (KMP) to full the fit and proper criteria;
• The Authorised Verifier need to possess the training and experience prescribed by IRDAI;
• Should not carry out any activity restricted under IRDAI regulations;
• The application for Web Insurance  Aggregator License must not be previously rejected by IRDAI;
• The applicant company must not have withdrawn the application for registration in the previous financial year;

Capital Requirements to Start Insurance Web Aggregator Website in India

Any company that wants to work as an Insurance Web Aggregator need to have Rs 25 lakhs as the minimum capital required. Also, it shall be relevant to take into notice that the said entity can raise its capital by issuing shares under the Companies Act 2013. However, in case of a Limited Liability Partnership, the contribution made by the designated partners should only be in the form of cash.

Also, the aggregate shareholdings of the foreign investors should not exceed 49% of the total paid up equity share capital.

Net Worth Requirements to Start Insurance Web Aggregator Website

The net worth requirements to start Insurance Web Aggregator Website can be summarised as:

• The net worth of an insurance web aggregator entity must not fall below 100% of the required minimum capital;
• It is necessary to review the capital of an insurance web aggregator on a half yearly basis, i.e., on 31^st March and 30^th September. However, in case of non-compliance, a report for the same must be filed within 15 days. Thereafter, the said web aggregator needs to implement restoration measures within 30 days;
• If an insurance web aggregator is not able to maintain the required net worth, then, in that case, the activities of the said aggregator will be ceased;
• A certificate of Net Worth must be obtained from a Practising Chartered Accountant;

Documents Required to Start Insurance Web Aggregator Website

The documents required to start insurance web aggregator website in India are as follows:

• Certificate of Registration in the case of Company and LLP;
• MOA and AOA of the company;
• In case of a Limited Liability Partnership, a copy of an LLP Agreement;
• PAN Card details;
• Basic and Education details of Principal Officer appointed;
• Background Profile of the partners or directors;
• Preview of the content to be displayed on the website proposed for license;
• Hosting Place details of the website;
• Net Worth Certificate;
• Certificate of Shareholding Pattern as certified by the CA;
• In the case of an existing company, Financial Statements for the previous three financial years. However, in the case of a new company, the latest financial statement;
• Details concerning IT Infrastructure available;
• Organisational Chart showcasing the different designations, together with their roles  and responsibilities;
• A username and temporary password to verify the Insurance Web Aggregator Website/ license/ LMS by IRDAI Information and Technology Department in a closed cover;

Process to Start Insurance Web Aggregator Website

The steps involved in the process to start insurance web aggregator website are as follows:

Furnish Application with IRDAI

In the first step, the applicant needs to file an application with IRDAI to obtain Insurance Web Aggregator License. The said application form must be in Form A of Schedule I of the prescribed IRDAI regulations.

Prescribed Documents and Fees

It shall be taken into due consideration that it is necessary to attach documents with the application form. Also, a fee of Rs 10000, together with the applicable taxes, in the form of DD (Demand Draft), needs to be paid to the IRDAI.

If in case an applicant furnishes his/ her application without the fee prescribed, then, the said application will not be processed further.

Also, it shall be noteworthy to state that an application form must be supplemented with a comprehensive five years business plan. The said plan must lay down the action plan and financial projections.

Meet the Eligibility Criteria

The applicant company must meet all the requirements specified to start Insurance Web Aggregator Website in India. Also, if it wants to deal in the field of Telemarketing and Outsourcing, the same needs to be specified in its MOA.

Rejection of License Application

It shall be noteworthy to state that if in case IRDAI is not satisfied with the application and documents submitted, it will grant a time of 30 days to rectify the issue. However, if the applicant fails in rectifying the issues raised, the authorities will reject the application filed.

Furnish Additional Information

If in case required, IRDAI has the authority to ask the applicant to furnish the additional information.

Issuance of License

Lastly, if the authorities are satisfied with the documents and application form submitted, then, in that case, it will grant the Insurance Web Aggregation License to the applicant, so that it can start insurance web aggregator website in India.

Validity of Insurance Web Aggregator License

In India, the certificate of Insurance Web Aggregator License remains valid for a period of three years, starting from the date of issuance of the license by IRDAI.

Further, the license holder needs to apply for the renewal at least 30 days prior to its expiry, by filing an application, together with the prescribed fees of Rs 25000.

Conclusion

In a nutshell, an Insurance Web Aggregator means an entity that deals in collecting, assembling, and maintaining information concerning the different insurance products offered by insurance companies. Further, to start Insurance Web Aggregator Website, one needs to comply with the requirements and conditions mentioned above.

Also, Read: How to Start Insurance Web Aggregator Business Model?