What is an Insurance Web Aggregator License?
- An Insurance Web Aggregator either owns or maintains information pertaining to insurance products of different insurers. A web aggregator collects, compiles and provides information about insurance companies and their policies. It provides leads to the insurer via its lead management system but does not charge for the same.
- Web aggregator has to be a registered company under the Companies Act, 2013 or the Companies Act, 1956. The insurance web aggregators are regulated by the Insurance Regulatory and Development Authority of India (IRDAI). The activities of the IRDAI (Web Aggregators) come under the governance of Insurance Regulatory and Development Authority of India (Insurance Web Aggregators) Regulations, 2017.
- In case the certificate of registration has been surrendered/rejected by the applicant, a fresh application would require to be made by the applicant post the lapse of one year from the date on which the surrender or rejection of registration becomes effective.
The certificate of registration will be a valid for a period of three years from the date it is issued by the authority.
What are the Functions of Web Aggregators?
A clear and well-defined structure has been given by the IRDAI as to the functions of Web Aggregators, which are as follows:
- displaying the product comparison and their conditions on the website;
- transferring the leads to the insurer in manner as specified by the IRDAI;
- the method and the procedure of selling insurance online;
- Use of tele-marketing mode for sale of insurance;
- arrangement of insurance based on the leads generated from the selected website.
The IRDAI shall also govern the method and mode of remuneration that is made to the Insurance Web Aggregators.
The applicant will have to make an application for Insurance Web Aggregator registration in Form-A of Schedule-I of IRDA (Web Aggregator) Regulations, 2017. The application is to be submiited with a fee of INR 10,000/- which shall be paid by the electronic transfer or demand draft to the IRDAI. The application fees of INR 10,000/- shall be non-refundable.
If the IRDAI is satisfied that the applicant fulfills all the requirements as mentioned in the regulations that cover the interest of the policyholders, it shall grant the certificate of registration to the applicant in Form E of Schedule I of the prescribed regulations.
How to get the Certificate of Registration of an Insurance Web Aggregator?
To get the certificate of registration, the following conditions would have to be fulfilled:
- The applicant should be a person, which includes:
- a company formed under the Companies Act, 2013;
- a limited liability partnership formed as per the Limited Liability Partnership, 2008;
- any such person recognized by the relevant authorities to act as an Insurance Web Aggregator.
- The Memorandum of Association must include the business web-aggregation of insurance products as its main object.
- It is necessary that the principal officer of the company possessed the prescribed qualification and should have cleared the Insurance Web Aggregator examination as prescribed by the authority.
- Other conditions as prescribed by the Authority.
Capital Requirements for getting the License
- A minimum paid-up capital of INR 25 Lakhs is required for the applicant seeking registration under IRDA (Web Aggregator) Regulations, 2017.
- If the company that desires registration as a web aggregator has been incorporated under the Companies Act, 2013, its capital must be issued and subscribed in the form of equity shares.
- In case of a Limited Liability Partnership, the partners must have made only cash contribution.
- The shares of the company seeking registration shall not be pledged in any form or manner to secure credit or any other facility and will be unencumbered at all the times.
Net-Worth Requirements for getting the License
- During the period when the certificate of registration of the web aggregator is valid, its net-worth shall, at no time, fall below 100% of the minimum capital requirements or INR 25 lakhs (which is the minimum share capital requirement).
- The status of the net worth shall be reviewed by the web aggregator half yearly on September 30th and March 31st. In case any non-compliance is found in the review, it shall be required to be reported to the Authority within 15 days. The mandatory requirements would have to be restored in 30 days thereafter and compliance conformity would have to be made to the authority.
- If the web aggregator us unable to maintain the net-worth requirements even after 30 days, it will have to immediately cease any insurance related business or activity.
- A net-worth certificate duly signed by a Chartered Accountant would have to be submitted by the insurance web aggregator to the authority every year after the books of accounts have been finalized.
The entity/individual that has been approved by the IRDAI shall have the complete ownership and the control of the share or the contribution.
In order to transfer shares of web aggregator, the process of transfer shall be as mentioned in Form AB (Transfer of Shares) of Schedule XII of Insurance Regulatory and Development Authority of India (Insurance Web Aggregators) Regulations, 2017.
Grounds basis which the application can be Rejected by the Authority
The grounds on which the application for certificate of registration can be rejected are:
- If the application is incomplete on some grounds or there is improper information, the authority can reject the application.
- If the applicant does not provide additional information that has been asked by the authority within 30 days of being asked, the application may not be considered by the authority.
How can the Certificate of Registration be renewed?
It is necessary to hold a valid certificate of registration in order to carry out the functions of the Insurance Web Aggregator. If the certificate of registration is near expiry, an application should be made before the authority. The application should be submitted not later than 30 days before the expiry of license. The renewal application should be accompanied with the relevant documents, which shall be complete in all respects and fees of INR 25,000.
What is the Remuneration Earned by the Insurance Web Aggregator?
- No fee shall be chargeable for transmission of leads from insurance web aggregator to insurer;
- A flat fee not exceeding fifty thousand per year towards each product displayed by the Insurance Web Aggregator in the comparison charts of its web is payable to it;
- any other such fee that many be governed by the Authority.
What are the Lead Limits of Insurance Web Aggregators?
Guidelines in regards to ambit within which web aggregators operate, business-model, remuneration, forcing change from cost-per-lead model to cost-per-sale model in the insurance industry, have been specified by the IRDA. One specific lead cannot be transmitted to more than five insurers that have the same class of business. Also, a particular lead cannot be shared with more than one broker at a time. It is also necessary that the lead is shared with the insurer/broker within five days of the enquiry being made.
In case anyone wants to run an insurance web aggregator business, it is mandatory that they get the license for the same as only the licensed insurance web aggregators can display products and price comparisons of the insurer companies. The facilitate product comparison for the potential customers and target them to one platform. The insurance web aggregators provide an unbiased platform to the customers by providing them an array of products room where they can choose. Getting license for insurance web aggregator business is no cakewalk and requires proper compilation of relevant documents with the duly filled application form. Professional expertise is required for checking the eligibility and the authenticity of all the documents that are attached with the application. Our team of professionals, who have years of experience in the field, can help you in getting the insurance web aggregator license with ease.
Frequently Asked Questions (FAQs)
Outsourcing is allowed for providing “insurance services” in respect of the policies that are procured via them. This means that the outsourcing function for providing “insurance services” that are to be undertaken after the sale of the insurance policy and not for the purpose of solicitation.
The IRDAI has initiated a Central Database of all Insurance Sales Persons in India called as ENVOY, which has been constituted at Insurance Information Bureau of India. ENVOY has been initiated for ensuring that all the licensed insurance sales persons working for insurers and intermediaries including entities like insurance agents, broker qualified persons, specified persons of corporate agents, authorized verifiers of web aggregators, points of sales persons, etc., do not work with more than one insurer in the same business category.
The aggregator business model is a network model whereby the aggregator approaches various insurance providers, collects information on their various products and services and sells these in its own name by making the owner of the products/services its partner. Therefore, under aggregator business model, the aggregator sells the products/services of other entities under its own brand name.
The insurance intermediaries have to upload details pertaining to the following on IIBI portal:
- Broker Qualified Persons
- Specifies Persons of Corporate Persons
- Authorized verifiers of web aggregators
- You should go for Insurance web aggregator incorporation through Swarit advisors due to below reasons:
- 100% In house team of CA/CA/Lawyers.
- On every step we establish contact with the applicant and keep them updated about the work in progress.
- We offer the services in the most satisfactory manner.