Process of Appointment of Principal Officer for Insurance Web Aggregator

For starting an Insurance Web Aggregator platform, a company needs to adhere to many requirements such as the process of appointment of Principal Officer, minimum capital requirements, eligibility conditions and documentation requirements. A company cannot operate as an insurance web aggregator without obtaining the Web Aggregator License from the IRDAI. One of the most important requirements to obtain the registration is to appoint a Principal Officer of the business. This guide talks about the Principal Officer appointment process, requirements, eligibility criteria for a PO, and duties to be performed by a PO in a web aggregator company.

Meaning of Principal Officer

As per Regulation 2(l) of the Insurance Regulatory and Development Authority of India (Insurance Web Aggregators) Regulations, 2017, a Principal Officer of an insurance web aggregator company is:

1. A Director or Partner in the company, who holds the exclusive responsibility for the operation of the Insurance Web Aggregator.
2. A Principal Officer is the CEO -Chief Executive Officer of the company who is appointed solelyfor the purposes of executing the activities ofthe Insurance Web Aggregator.

A Principal Officer plays a centric role in the company, supervising all the activities undertaken for the web aggregation of insurance services. The Principal Officer also ensures that the business adheres to its object clause of solely operating as a web aggregator to display and provide comparison of insurance products in India.

Educational Eligibility Criteria for Appointment of Principal Officer

A person can only be appointed as the Principal Officer of an Insurance Web Aggregator company if they fulfil the following eligibility educational qualifications under the Regulations:

1. The person must have obtained a Bachelors or Masters degree in fields of Arts, Science, Social Sciences, Commerce, Engineering, Law or Management or an equivalent to such fields from any institution or university which has been recognised by any State Government or the Central Government; or
2. The person must be an Associate or Fellow of the Insurance Institute of India, Mumbai, or
3. The person must have obtained a post-graduate qualification of the Institute of Insurance and Risk Management, Hyderabad; or
4. The person must be an Associate or Fellow of the Institute of Chartered Accountants of India, New Delhi; or
5. The person must be an Associate or Fellow of the Institute of Cost and Works Accountants of India, Kolkata; or
6. The person must be an Associate or Fellow of the Institute of Company Secretaries of India, New Delhi; or
7. The person must be an Associate or Fellow of the Institute of Actuaries of India; or
8. The person must have obtained the Certified Associateship of the Indian Institute of Bankers, Mumbai; or
9. The person must possess any other qualification as provided by the IRDAI from time to time under the IWA Regulations.

The person appointed as a Principal Officer must also have finished the training on insurance from a recognised institution by the IRDAI and cleared the examination on insurance after finishing the insurance training.

Requirements W.R.T. Principal Officer for Web Aggregator License

When it comes to the Web Aggregator License registration, there are numerous requirements which must be dealt with before the application is filed with the IRDAI. The IRDAI only considers accepting an application for insurance web aggregation business in India if the conditions mentioned under Chapter II of the Insurance Regulatory and Development Authority of India (Insurance Web Aggregators) Regulations, 2017.

Some of these eligibilities and registration requirements must specifically be fulfilled by the Principal Officer of the company. These requirements with regards to the Principal Officer for Insurance Web Aggregator License are:

1. The Principal Officer must fulfil the educational qualification requirements, as mentioned above.
2. The Principal Officer of the Insurance Web Aggregator must have undergone the training and passed the examination, as specified above.
3. The Principal Officer must fulfil the fit and proper criteria. This criterion requires that nocriminal or civil proceeding must be pending against the PO with the Department of Revenue Intelligence. If any such case is pending against the applicant, the person cannot be appointed as the company’s Principal Officer.
4. The PO of the company may be asked to appear before the IRDAI for personal representation regarding the web aggregator license application.

Process of Appointment of Principal Officer

When it comes to the process of appointment of Principal Officer of an insurance web aggregator company, the documents filed at the time of Web Aggregator License registration are sufficient to express the PO’s appointment.

Documents for Process of Appointment of Principal Officer

The documents involved in the process of appointment of Principal Officer include:

1. C.V. of the Principal Officer.
2. Copies of the Principal Officer’s Qualification Certificates.
3. Self Certification by the Principal Officer that states that the Principal Officer is not registered as an Insurance Agent, Company Agent, Micro Insurance agent, TPA, Surveyor, Loss Assessor, Insurance Broker or any other insurance intermediary with any company.
4. Training and Examination Certificates of Principal Officer.
5. An Undertaking that states the following:
   • The Principal Officer has not been refused the grant of Web Aggregator License by the IRDAI.
   • The Principal Officer has not violated the code of conduct as specified in the Insurance Regulatory and Development Authority of India (Insurance Web Aggregators) Regulations, 2017.
   • The Principal Officer is appointed solely to execute the functions of the company under the Regulations
   • The Principal Officer is not holding any directorship, employment, assignment or representation on a full time or on part-time basis in any other insurance-based entity or any other company.
6. Particulars of Principal Officer such as personal details, full name, contact details, address, phone no., cell no., e-mail ID, date of birth, nationality, pan card no. and Aadhaar card no.
7. Description of duties and responsibilities of the Principal Officer such as:
   • Qualifications, experience and achievements including the name of the Institute, country, qualifications and year of study
   • Professional Qualifications like name of the Institute, country, qualifications and year of study.
   • Working Experience including the name of the employer, nature of business, designation, description of duties and period of working.
   • Association with the company with details of the present shareholding in the company, position as on the date of application, name of the Company, no. of shares held and % of shares held in the company.
   • Equity Interest in other companies or shareholding in other companies including the name of the company, no. of shares held and the % of shares held in the company
   • Directorship, Partnership or Proprietor positions held in other companies including the name of the company, position held in the organisation and the period of working.

Also, all the documents related to Web Aggregator License registration, Web Aggregator License Renewal or a fresh application by the aggregator company must be attested by the Principal Office.

Responsibility of Principal Officer W.R.T. Certification of Compliance

The Principal Officer of insurance web aggregator company must submit to a certificate of confirmation with the IRDAI at the end of each financial year. This certificate states that the insurance web aggregator has adhered to the Insurance Regulatory and Development Authority of India (Insurance Web Aggregators) Regulations, 2017 during the financial year.

Process to Change the Principal Officer

An insurance web aggregator can only change its Principal Officer by seeking prior approval from the IRDAI. A written approval application must be filed with the IRDAI if a company wishes to change its PO, along with the reason for doing so.

Disqualifications of Principal Officer

A person may be disqualified from getting appointed as the Principal Officer of a web aggregator if they fall into any of the following categories:

1. The person is a minor.
2. The person is found to be of unsound mind by a court of competent jurisdiction.
3. The person hasbeen found guilty of criminal misappropriation, criminal breach of trust, cheating, forgery or abetment or attempt to commit any such offence during the last 5 years.
4. The person has been found guilty of, knowingly participated or conniving at any fraud dishonestly or misrepresentation against an insurer or an insured person in a case filed against them regarding any policy of insurance of the winding up of an insurance company or in the course of an investigation of the affairs of an insurer.
5. The person is found to be lacking the requisite qualifications and practical training for a period up to 12 months.
6. The person has not passed the examinations as required under the IWA Regulations.
7. The person has violated the code of conduct laid down under the IWA Regulations.
8. The person must not have violated the code of conduct specified in Form W (Code of Conduct for Insurance Web Aggregator) under theRegulations.

Code of Conduct

Form W (Code of Conduct forInsurance Web Aggregator) of Schedule VIII of the IRDAI- IWA Regulations lay down the code of conduct that must be followed by an insurance web aggregator company, its Principal Officer and its Authorised Verifier.

Conduct in matters relating to client relationship

The Insurance Web Aggregator must ensure that the following activities are done without fail:

• Its dealings are conductedwith the Prospects or Policyholders with utmost good faith and integrity at all times.
• It acts with care and diligence.
• It treats all information provided by the prospects with complete confidentiality and to the insurers whom the business is offered to.
• The company or Principal Officer takesnecessaryprecautions to ensure the safety of confidential documents in the company’s possession.
• The company understands the kind of Prospect it is dealing with and knows the extent of the Prospect’s risk and insurance awareness.
• The company or its PO avoidsany form of conflict of interest.

Conduct relating to dealing with complaints

The Insurance Web Aggregator must ensure that the following are taken care of:

• The company must have a system to record and monitor complaints by the website users and insurers.
• The websites must contain the information of complaint handling process and specify theoption to the complainants tofile any complaints online.
• The communication with clients via means like written complaint, phone, fax, email or messaging are acknowledged within five working days from the date of receivingsuch complaint.
• The grievance must be resolved to the fullest satisfaction of the client in a prompt manner.
• The response letters must be sent to the complainant once the grievance is resolved and the complainant must be informed of the next steps of redressal procedure available.
• The complaints must be attended to at the Key Management Person level in the company.

Conduct regarding the advertising activities

The Insurance Web Aggregator’s PO must also ensure that the website contains no advertisements or any biased information prohibited under Regulations.

Conduct regarding receipt of remuneration

The Insurance Web Aggregator or its PO must disclose the amount of remuneration or other remuneration received as a result of effecting insurance upon receiving a request from the prospect.

Conduct relating to training

The Insurance Web Aggregator or its PO must ensure the following in relation to the insurance training:

• The company’s staff must be aware of and follows the standards expected of them under the Regulations.
• The staff must be competent, suitable and have received adequate insurance training.
• There must be a system to evaluate and monitor the quality of advice given by the company’s staff.
• The staff must be aware of the legal requirements associated with the company’s functioning, including the law of agency affecting their activities.
• The company must make the client aware of Section 41 of the Insurance Act, which prohibits the rebate and share of commission or remuneration.
• The Insurance Web Aggregator must display a copy of the code of conductin every office where the business activities are carried out and to which the public have access to.
• The Insurance Web Aggregator or its PO must furnish the returns to the IRDAI within 15 days from the end of the period or time specified by the IRDAI.

Requirements from Principal Officer for License Renewal

When a web aggregator company plans for Web Aggregator License Renewal, it must ensure that the Principal Officer and its Authorised Verifiers have undergone the requisite renewal training not more than 6 months before expiry of the license.

Cancellation or Suspension of License

The Web Aggregator License of the company may be cancelled or suspended with notice if the Principal Officer does not fulfil the conditions specified in the Regulations or is in violation of them.

The Web Aggregator License registration procedure is complicated as it requires various requirements and conditions to be fulfilled, such as process of appointment of Principal Officer. Swarit Advisors provide end-to-end assistances to businesses for their Insurance Web Aggregator License, Web Aggregator License Renewal, appointment or change of the Principal Officer and much more.

Also, Read:Web Aggregator License: All About Insurance Web Aggregation in India