Web Aggregator License Renewal Process and Requirements in India
Web Aggregator License Renewal: With a rise in the number of insurance buyers and increase in the use of the internet by consumers to purchase goods or avail services, the need for technological disruption in the insurance sector in India became the need of the hour. Keeping this in mind, the Insurance Regulatory and Development Authority of India introduced the concept of Insurance Web Aggregators in India. Starting an Insurance Web Aggregator business in India requires a Web Aggregator License from the IRDAI. This blog talks about the process and requirements for Insurance Web Aggregator License Renewal in India.
Insurance Web Aggregator License
The Web Aggregator License issued by the IRDAI has a validity period of 3 years from the date on which the Authority issues it. However, the same can be renewed by the company by following the renewal process laid down by the IRDAI. The company can renew its Web Aggregator License unless it is suspended or cancelled by the Authority in pursuance of its regulations.
The Web Aggregator License Renewal is done as per the provisions of:
- The Insurance Act, 1938
- The Insurance Rules, 1939
- The Insurance Regulatory and Development Authority Act, 1999
- The Insurance Regulatory and Development Authority of India (Insurance Web Aggregators) Regulations, 2017
Conditions for Web Aggregator License Renewal
To obtain the Insurance Web Aggregator renewal certificate, an applicant company must fulfil the following eligibility criteria:
- The company must fall under the definition of a ‘person’ under Regulation 2(k). This includes any company registered under the Companies Act, 2013; a limited liability partnership formed under the Limited Liability Partnership Act, 2008; any other person recognised by the IRDAI to act as a Web Aggregator in India. In case of an LLP, it must not have a non-resident entity or a person resident outside India as a partner in accordance with the Foreign Exchange Management Act, 1999. Additionally, the LLP must not be a foreign limited liability partnership.
- The company’s Memorandum of Association must lay down an object clause which states that the main objective of the business is web aggregation of insurance products.
- The company must not be indulged in any other business activities other than its main object as stated in the MOA.
- The company must not hold any appointment or registration as an insurance agent, company agent, micro-insurance agent, TPA, surveyor and loss assessor, insurance marketing firm or any other insurance intermediary in India.
- The company must not be a part of any referral arrangement with any insurance company in India.
- The company must have an active web-platform to execute its insurance web aggregation operations.
- The Principal Officer must be an experienced professional, holding the qualifications as stated by the IRDAI in its regulations.
- The Principal Officer must have undergone the training sessions and cleared the examination as necessitated by the IRDAI.
- The fit and proper criteria as required under the IRDAI regulations must be fulfilled by the applicant company’s principal officer, directors, promoters, shareholders, partners or key management personnel.
- The authorised verifier must have undergone the training sessions and cleared the examination as necessitated by the IRDAI.
- The Insurance Web Aggregator must have violated any the obligations or code of conduct specified under the IRDAI regulations.
- The IRDAI must not have earlier rejected the company’s application for insurance web aggregator license renewal.
- The company must not have withdrawn the renewal application due to any reason during the previous financial year.
- The foreign investor or Indian promoter of the company must have exited any time during the previous two financial years.
Eligibility Qualifications for Principal Officer
As mentioned above, the Principal Officer of an Insurance Web Aggregator company must be eligible under the Regulations and fulfil the following education qualifications:
- The Principal Officer must have 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
- The PO must be an Associate or Fellow of the Insurance Institute of India, Mumbai, or
- The PO must have a post-graduate qualification of the Institute of Insurance and Risk Management, Hyderabad, or
- The Principal Officer must be an Associate or Fellow of the Institute of Chartered Accountants of India, New Delhi, or
- The PO must be an Associate or Fellow of the Institute of Cost and Works Accountants of India, Kolkata, or
- The Principal Officer must be an Associate or Fellow of the Institute of Company Secretaries of India, New Delhi, or
- The PO must be an Associate or Fellow of the Institute of Actuaries of India.
- The PO must have the Certified Associateship of the Indian Institute of Bankers, Mumbai, or
- The PO must possess any other qualification as provided by the IRDAI from time to time under the IWA Regulations.
Insurance Web Aggregator License Renewal Process
The following process must be followed by an Insurance WA in India for its Web Aggregator License Renewal:
Application for Web Aggregator License Renewal
The Web Aggregator company must file an application for renewal of its registration with the IRDAI in Form F at least 30 days prior to the expiry of its Insurance Web Aggregator License. The company also has the option to file an application for renewal of its license 90 days before its Web Aggregator License expires as per the process laid down by the IRDAI.
Document Filing and Renewal Fees
The renewal application must be filed along with the prescribed documents to satisfy the IRDAI that the company fulfils all the requirements to get its license renewed. The application for Web Aggregator License Renewal must be filed along with a prescribed renewal fee of INR 25,000 plus applicable taxes. The fees must be paid in the form of a bank draft drawn in favour of the Insurance Regulatory and Development Authority of India and payable at Hyderabad. The fees can also be paid by recognised electronic funds transfer methods.
Delay in Filing the Renewal Application
If the company fails to file its Web Aggregator License Renewal application at least 30 days before the date of its expiry, the company would be liable to pay an additional fee of INR 100 as a penalty. In case of such delay and penalty, the applicant company may provide sufficient reasons in writing to the IRDAI to accept the application. In this case, the Authority may accept a renewal application even 60 days after the expiry of the license. The applicant, in this case, must also pay an additional fee of INR 750.
However, in such cases of delay, the IRDAI considers the Web Aggregator License Renewal application only after the lapse of 12 months from the date on which the license of the applicant company expired. During this period, the license of the Insurance Web Aggregator ceases to exist and the company cannot solicit any new clients or carry out any other activities relating to insurance web aggregation.
Verification by the IRDAI
The Web Aggregator License Renewal application is verified by the IRDAI to check if the applicant fulfils the eligibility conditions, net owned funds, directors’/promoters’ financial position, adherence to the code of conduct, fit and proper criteria, etc.
Training of the Principal Officer and Authorised Verifiers
The Insurance Web Aggregator must also verify that the Principal Officer and the Authorised Verifiers of the company have received renewal training not more than 6 months ago from the Web Aggregator License expiry date.
Grant of Insurance Web Aggregator License Renewal
Upon thorough verification and being satisfied that the applicant meets all the conditions laid down under the Regulations for renewal of Web Aggregator registration, the IRDAI grants the Web Aggregator License Renewal to the company for a further period of 3 years.
However, if the IRDAI finds that the Web Aggregator company has not performed the insurance aggregation activities during its previous registration period, entirely or partly, it may refuse to renew the registration of the company.
Documents Needed for Insurance Web Aggregator License Renewal
The following documents are required to file an application for Insurance Web Aggregator registration renewal in India and must be attested by the Principal Officer of the company before submission:
- Self-Certified undertaking in the format given in Annexure 1 of the Regulations.
- Confirmation relating to the place where the website of the company is being hosted. This includes places like registered office or operations office in case there is a change in the place.
- List of individuals who control the digital platform or are responsible for its management in relation to its activities of insurance web aggregation in case there is a change in such individuals.
- Business Plan for at least the next three years.
- Certificates of Renewal of the insurance training of the Principal Officer and Authorised Verifiers.
- Bank Draft for the renewal fees.
Rejection of Web Aggregator License Renewal Application
When an application for Web Aggregator License renewal fails to meet the requirements and conditions laid down under the IWA Regulations, the IRDAI may refuse to renew the Web Aggregator License registration of the company.
However, in case the IRDAI finds an applicant to be unsatisfactory, it must give the applicant company an opportunity of being heard before rejecting its application for license renewal.
In case of refusal to renew the company’s Web Aggregator License, the IRDAI must communicate the same within 30 days of rejecting the application, along with the reasons for such rejection of the application.
However, in an event of rejection of renewal application, the applicant company can file an appeal against the decision of the IRDAI with the Securities Appellate Tribunal. The appeal must be filed within 45 days of receiving the copy of the order made by the IRDAI.
Effect of Rejection of Web Aggregator Registration Renewal Application
When the application for Web Aggregator License Renewal is rejected or refused by the IRDAI, the company ceases to act as an Insurance Web Aggregator from the date on which such rejection is communicated to it. However, the company has an option to file a fresh application with the Authority when the IRDAI has cancelled its registration or rejected its renewal application.
The fresh application for Web Aggregator License registration can be filed by such company only after a period of 12 months from the date on which the IRDAI passed its decision. In case the IRDAI’s decision is upheld in any legal matter such as appeal, the registration application of the company would only be considered after 12 months from the date on which the court passes its final judgement.
The application for Web Aggregator License registration by the company whose license was cancelled or renewal application was rejected in case of surrender or any disciplinary action would be accepted only after the due diligence process for the following is successfully completed:
- The severity of the previous regulatory violations.
- Lead Management System model and the current infrastructure setup of Insurance Web Aggregator.
- Persistency of the business over the years.
- The complaints filed against the Insurance Web Aggregator by insurance companies associated with it or its customers.
- Due diligence and track record of the company’s activities.
- Other details filed along with the application.
- Any other information as specified from time to time by an order or guideline by the IRDAI.
The IRDAI appoints a special committee to evaluate such application, and makes a decision regarding its rejection or grant of a new Web Aggregator License as per the suggestions from the committee.