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What is an Insurance Web Aggregator License?

The concept of the Insurance Web Aggregators is formulated by the IRDAI under section 14 and 26 of Insurance Act, 1938, for the purpose of supervising and monitoring a website which is indulged in providing interface to the buyers of the insurance products providing them the price comparison and information about different insurers and other related matters thereby enabling them to make a wise decision.

Important Terminology

  1. Authorized Verifier: The person employed by the web aggregator or insurance or a Tele-marketer for the purpose of insurance solicitation and procurement through Telemarketing and Distance Marketing mode and who has undergone training and passed the examination as specified by the IRDAI;
  2. Distance Marketing: It refers to the process of the sale of insurance products in the absence of the physical presence of the customer, and the process is accomplished through telephone or Short Messaging Service (SMS) or email or other Internet or web services;
  3. Key Management Personnel (KMP): Under these regulations, the KMP means Chief Executive Officer (CEO), Chief Operating Officer(COO), Chief Marketing Officer (CMO), Chief Financial Officer (CFO), Head - Technical, Head – IT;
  4. Lead : It refers to the information relating to a person who has accessed the website of an Insurance Web Aggregator and has submitted certain contact information for obtaining information on prices or features or benefits of various insurance products;
  5. Lead Management System: It refers to the implementation of the software by the registered insurance web aggregator for activities such as recording, filtering, validating, grading, distribution, follow up and closure of leads from the enquiries received on the website of the Insurance Web Aggregator
  6. Principal Officer: He/She is the person responsible for the overall functioning of the web aggregator and may be a Director/Shareholder/Promoter etc.

Eligibility Criteria to be registered as an Insurance Web Aggregator

There are certain minimal criteria laid down by the IRDAI for the applicant to apply for the insurance web aggregator license. These can be narrated as follow:

  1. First and foremost, the applicant shall fall under the definition of person, which means the applicant shall either be a Company registered under Companies Act, 2013 or a LLP formed under LLP Act, 2008;
  2. The object clause contained in the Memorandum of Association of the proposed web aggregator company shall contain business of web aggregation of Insurance Products only as its main object;
  3. Non-involvement in any other business other than the business of insurance web aggregator;
  4. The applicant shall not be a corporate agent, insurance agent, micro-insurance agent, surveyor, or loss assessor, insurance marketer or any other Insurance intermediary registered with the IRDAI;
  5. There should be no prevailing of any referral agreement between the insurer and the applicant;
  6. The applicant or its group entities shall be considered for only one license of the insurance intermediary. However, when one such license is already prevailing, the application for the web aggregator shall be evaluated on the merit basis and with no conflict of interest;
  7. There should be a designated website available with the applicant to undertake the activities of insurance web aggregation;
  8. There should be appointed a Principal Officer who should have minimum prescribed qualification and shall have undergone necessary training and have qualified the prescribed online test;
  9. The directors/shareholders/principal officer or any other Key Managerial Personnel associated with the applicant entity shall fall under the FIT and PROPER criteria as prescribed by the authority;
  10. No application for web aggregator as applied by the applicant shall have been rejected by the Authority in the preceding financial year

Capital Requirements

Minimum capital with which an applicant can apply for the web-aggregator license under the prescribed regulations is INR 25 Lakh.

If the applicant is a Company, the capital shall be in the form of subscribed paid up equity share capital.

If the applicant is an LLP, the capital shall be in the form of cash contribution by all the partners;

The shares issued in respect of the capital shall always remain unencumbered.

Capital and Net Worth Requirements

  1. The minimum capital with which an applicant can apply for the web-aggregator license under the prescribed regulations is INR 25 Lakh.
  2. If the applicant is a Company, the capital shall be in the form of subscribed paid up equity share capital.
  3. If the applicant is an LLP, the capital shall be in the form of cash contribution by all the partners;
  4. The shares issued in respect of the capital shall always remain unencumbered.

Net-worth requirements

  • The net-worth prescribed for an Insurance Web Aggregator shall at no time fall below 100% of the minimum capital requirements or contribution as specified above.
  •  The status of the Net worth shall be reviewed by every insurance web aggregator every half year as at 30th September and 31st March every year and report any non-compliance within 15 days thereon and restoration measures shall be taken within 30 days there after
  •  In case of inability to maintain the minimum net-worth even after 30 days by the Insurance Web Aggregator, the insurance related business or activity shall be ceased immediately.
  •  After the finalization of the books of accounts, a net worth certificate duly certified by a Chartered Accountant shall be submitted to the authority.

Procedure for application of Insurance Web Aggregator License

The application for the grant of certificate of registration shall be made in Form A as prescribed under the Act

The payment of the fees is necessary for the validity of the application and can be done in the form of Demand Draft(DD) or through electronic fund transfer

Application for registration shall be presented before the authority along with the non-refundable fees of INR 10,000/- in the favour of IRDAI, Hyderabad

The application shall be complete in all the respects and shall mention the intention of carrying out the outsourcing or telemarketing functions, if any.

Grounds for rejection of application

  • Incomplete information or documents;
  • nability to provide any other information seek by the authority within the stipulated time of 30 days.

Grounds of consideration for the grant of license

  • 1  The activities to be carried out by the proposed insurance web aggregator;
  • 2  No Director, shareholder, promoter, principal officer or any other Key Managerial Person shall suffer from any of the disqualification;
  • 3  No person, connected with the applicant, either directly or indirectly shall have been denied of any license or registration by the Authority.
  • 4  The capital or net worth requirement shall be fulfilled;
  • 5  The financial status of the promoters shall be capable enough to make investment in the Company.
  • 6  Presence of a designated website for offering insurance web aggregation.

Procedure for Grant of Certificate of registration

(a)The Certificate of Registration shall be granted to the applications completed in all the respect and accompanying all the requisite documents and a unique business plan;

(b) The certificate of registration shall be issued only id all the requisite criteria mentioned above have been satisfied;

(c) In case of rejection of the application by the Authority, the applicant can make a fresh application after a time-lapse of one year.

On what conditions license is granted? 

The License shall be granted on the following conditions: 

  • The Web Aggregator shall be indulged in the solicit of the insurance products as approved under the law;
  • All the entities registered as insurance web aggregator shall comply with all the rules, regulations, notices and circulars issued by the authority;
  • Any significant change in the material information provided to the authority shall be timely reported;
  • There shall be the presence of the mechanism for proper redressal of the customer grievances within 14 days of receipt of the complaint;
  • There shall be present the adequate system for the proper maintenance of the records of the insurance policies solicited;
  • A proper compliance code of conduct shall be issued by the web aggregators to their Directors, Promoters, Shareholders etc.
  • An investigating authority shall be appointed by the authority to examine the books and records of the insurance web aggregator from time to time.

Validity of Certificate of Registration

The Certificate of registration is valid for a period of three years from the date of registration provided it is not cancelled or suspended by the authority on any grounds. Not later than 30 days before the expiry of the certificate of registration, the application for the renewal shall be made. 

Corporate Governance circumventing Insurance Web Aggregators

  • A Board approved policy shall be put in place by all the Insurance Web Aggregators presenting the manner in which insurance products shall be solicited;
  • The policy shall also talk about the following:
    • Multiple Tie-ups;
    • Types of insurance products;
    • Grievance Redressal Mechanism;
    • Reporting Requirements etc.
  • The policy shall be reviewed at least once in three years;
  • There shall be taken out and maintained the professional indemnity insurance by all the insurance web aggregators for the period their certificate of registration remains valid;
  • In case the web aggregator intents to change the name of its entity, the prior approval of the authority shall be taken in such cases;
  • The insurance web aggregator shall display the list of all the insurers with whom they are having the alignment and shall present the products on the website depending upon the needs of the prospect;
  • No promotion of any insurance product or any insurance company shall be carried on by the web aggregator;
  • Following Books of accounts shall be prepared and maintained every year:
    • The statement of affairs of the Company or Balance Sheet;
    • The Profit and Loss Statement;
    • The Income and Expense statement;
    • The cash flow statement;
    • Any other statement as prescribed by the authority for the Insurance Web Aggregators.
  • The half yearly returns shall be submitted in respect of life, general and health insurance, in the formats specified by the Authority, before 31st October and 30th April every year

Activities and Functions of an Insurance Web Aggregator

  • Display of various insurance products of various insurance companies on the website of the aggregator;
  • Transmission of the insurance leads from the website of the insurance web aggregator to the insurance companies;
  • Online sale of the Insurance;
  • Use of Telemarketing or distance marketing mode for the sale of insurance. 

Remuneration for Insurance Web Aggregators

  1. No charges shall be levied by the web aggregators for the transmission of the leads to the insurer;
  2. The remuneration shall be claimed only in case of those leads which have been converted into sale by the insurer;
  3. There has been prescribed a flat fees of rupees fifty thousand per insurance product per year, by the authority, displayed by the Insurance Web Aggregator on its web site;
  4. Until and unless it is a zero commission based product, the remuneration payable to the Insurance Web Aggregators shall not be denied on the grounds of direct sales by insurance companies;
  5. Any discount or rebate shall not be offered by the insurance web aggregators to the prospect other than what is actually offered by the insurance companies.

Process of Obtaining Insurance Web Aggregator License

  • NOC regarding name of the Insurance Web Aggregator: The applicant shall apply to the authority, for the NOC regarding the proposed name of the website and the Company. The timeline for receiving the NOC is around 30 days from the date of the submission of application;
  • Company Registration with ROC: This shall be done after the receipt of the NOC from IRDAI. The company shall be registered with the respective ROC of the state where the registered office shall be situated. It takes around 10 day to get the company registered after submission of requisite forms along with the necessary documents;
  • Preparation of the Business Plan for next 3-5 years: There shall be in place a high level business plan for next three to five years which shall present the details about the blueprint for the operation of the Insurance Web Aggregator. The plan should inculcate all the details pertaining to the products, technology, area of operation, customer segment, risk management strategies etc.
  • Appointment of the Principal Officer: As defined earlier, the principal officer shall be the person of prominence and shall satisfy the following qualification requirements:
    1. Graduate/Post Graduate in Arts, Science, or Social Sciences or Commerce or Engineering or Law or Management or its equivalent from any institution/university recognized the State or Central Government;
    2. Associate/Fellow member of the Insurance Institute of India, Mumbai; or
    3. Any post graduate from the Institute of Insurance and Risk Management, Hyderabad; or
    4. Associate/Fellow member of the Institute of Chartered Accountants of India, New Delhi ; or
    5. Associate/ Fellow member of the Institute of Cost and Works Accountants of India, Kolkata; or
    6. Associate/ Fellow of the Institute of Company Secretaries of India, New Delhi; or
    7. Associate/ Fellow of the Institute of Actuaries of India; or
    8. Certified Associates from the Indian Institute of Bankers, Mumbai; or
    9. Any other qualification specified from time to time by the Authority under these Regulations.

Apart from this, the Principal officer should also have completed the specified training on insurance from an institution recognized by the Authority from time to time and must have passed an examination, at the end of the period of training mentioned above, conducted by an examining body recognized by the Authority.

  • Conduct of the CISA Audit: This is the audit in respect of the technology developed by the proposed web aggregator. It is conducted by the authorised software professionals certified by the authority. The audit report shall be submitted along with other documents with the application submitted to the authority.
  • Documents for Web Aggregator License: Below is the gist of the documents to be submitted to the authority along with the application:
    1. Certificate of Registration of the Company or LLP as issued by the ROC;
    2. MOA and AOA of the Company or the LLP Agreement, as the case may be;
    3. Copy of PAN Card of the Company;
    4. Profile of the Directors/Partners of the Company or LLP, as the case may be;
    5. Profile of the Principal Officers along with the educational qualification certificates;
    6. Brief preview of the contents of the website proposed for License;
    7. Details about the hosting place of the website;
    8. Details about the responsible persons for the website’ content;
    9. Net worth certificate and shareholding pattern of the company as certified by the Chartered Accountant;
    10. Audited financials for the last three years in case of existing company or latest as on date in case of a new company;
    11. Details of the IT infrastructure available with the applicant;
    12. Organisational Chart with various designations with their roles and responsibilities;
    13. A user I.D. and temporary password (with only view permission) to verify the Aggregation Website(s)/Portal/LMS by IRDAI I.T. Department in a closed cover

The above documents shall be attested by the Principal Officer.

Frequently Asked Questions (FAQs)

Yes, the applicant shall get a working website ready while making the preparation for the website. It is also mandatory to submit the audit report of the website known as CISA Report certified by authorised professionals for this purpose.

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