Insurance Web Aggregator License

Pursuant to provision of Insurance Act, 1938 read with insurance Regulatory and Development Authority of India (Insurance Web Aggregators) Regulation, 2017 amended up to 30th Oct, 2019 any person who want to do business of Insurance Aggregation via Digital Platform are required to take approval first from the Insurance Regulatory and Development Authority of India (IRDAI).

On increasing internet penetration, smart phone users and easy access of internet people are often met with an instant search engine for any related services and knowledge. It is understood by the businessmen of India that the digital presence is most and operation of business digitally and technology driven is need of an hour.

Similarly the regulator also acknowledge the modes of business operation and its variability in market, out of which in early 2013 regulator come up with guidelines for Insurance Web Aggregator business. The business of digital sourcing of insurance activities via digital platform. The regulator recently repeal the 2013 regulation and come up with revised regulatory framework of Insurance Web Aggregator in 2017 latest amended up to 30th Oct, 2019 to license, monitor and govern this business appropriately. 

Important Terms:

• Authorized Verifier: It is a Person employed by license Insurance Web Aggregator or a Tele-marketer for insurance solicitation and procurement through Telemarketing and Distance Marketing mode. Such person need to take training and passed the examination specified by Authority. Authority refers to IRDAI.
• Distance Marketing: Marketing or sale of insurance products without physical presence at the time of sale and it is done via telephone, Short Messaging Service (SMS), e-mail or internet or web service.
• Lead: It is information pertaining to person who has accessed the website of an Insurance Web Aggregator and has submitted contact information of any kind, for obtaining information or prices or features or benefits of insurance products. 

Lead or Lead Generation, both need to manage in proper way as per regulatory requirements termed as “Lead Management System” i.e. LMS refers to software implemented by Insurance Web Aggregator for recording, filtering, validating, grading, distribution, follow up and closure of leads from the enquiries received on the website of the Insurance Web Aggregator.

• Principal Officer means director/partner or Chief Executive Officer who is exclusively responsible for the activities of Insurance Web Aggregator.
• Solicitation is defined as approach of a prospect by an insurer or an intermediary with view to convince the prospect to purchase an Insurance policy.

What is Insurance Web Aggregator?

It is digital platform to generate the lead and its management for securing the business to various Insurer company in India under the valid agreement in between Insurance Web Aggregator and Insurance Company.

Who are eligible to apply for Insurance Web Aggregator License?

Any person like Company or Limited Liability Partnership with minimum Net Owned Fund adequacy of INR 25 Lakh can apply for Insurance Web Aggregator License. Applicant can file application to IRDAI in Form A with non-refundable fees of application.

What are the Registration Fees?

The applicant should first pay non-refundable application Fees of INR 10,000 plus applicable taxes. Besides this there is stamp duty as per state for incorporation of Company or LLP to carry this business, consultancy charges, business plan charges, application fees and system audit fees. It is costly products to get approval from IRDAI but gives ample opportunity to explore the business of insurance product solicitation.

Statistically:

There are 22 registered Insurance Web Aggregator as on 31st Dec, 2020 as per the report published by IRDAI for public inspection. Easy policy Insurance Web Aggregator Private Limited is first around 2014, followed by Policybazaar Insurance Web Aggregator Private Limited around 2015 and recently KDGO Insurance Web Aggregator Private Limited is recently authorized entity in 2019. All the license entity are valid for period of 3 years. Then such entity is required to renew at least 30 days before the expiry of registration at Form F with required attachment of documents at Form G in addition to renewal fees of INR 25,000/- plus applicable taxes.

• Telemarketer is an entity registered with Telecom Regulatory Authority of India.
• Website is set of related web pages served from a single web domain. It is hosted on at least one web server accessible via networks such as Internet or Private Local Area Network through an Internet Address known as a Uniform resource locator. Word website includes a web portal and/or a mobile site.  

The process start from day where we built the onboarding process complete. First and foremost activities is to share the Name and Minimum Documents of Director/Shareholder to IRDAI office to take approval of name for the incorporation of proposed Company or LLP.

Moment IRDAI revert on the allow ability of proposed name with proposed director/shareholder, Person can incorporate the company or LLP with required capital contribution to maintain the Net Owned Fund. The permission letter of IRDAI is generally valid for 6 months to incorporate the Company/LLP. 

Once Company/LLP is incorporated then the application drafting, other write up, business plan, review and collection of documents will take time then the application is submitted to its head office Hyderabad for their scrutiny and revision.  

By the time of accomplishment of revision of submitted documents IRDAI communicate the shortcoming or any further documents required them to make decision on our application.

Subject to satisfaction of their requirements and our documents, eligibility, fit and proper criteria of Board of Director and clean money of shareholder make them to issue in-principal approval. During the period of in-principal approval developed, platform or platform in progress needs to be accomplished with system audit report on same.

After the full-fledged development of platform or system report submission on the designed platform, the IRDAI can give the certificate of authorization. And as per the regulatory norms, the entity should initiate the business within 6 months of receiving the documents from IRDAI.

Duration

As the matter of fact and involvement of regulator, talking since incorporation of the company to application submission and receiving authorization from IRDAI is lengthy process and we generally informed our client as the minimum requirements of a license is approx. six working month period from the date of application been placed to IRDAI office for their scrutiny till their satisfaction to issue in-principal or certificate of authorization to applicant.

Qualification of Principal Officer:

• Person whomsoever acting as Principal Office in Insurance Web Aggregator shall be:-
• Graduation or Post Graduation in Arts, Science, or Social Sciences or Commerce or Engineering or Law or Management or its equivalent from any institution/university recognized by any State or Central Government
• Associate/Fellow members of Insurance Institute of India, ICAI, ICSI, ICWA, Institute of Actuaries of India or Indian Institute of Bankers
• Attended training on insurance from an institution recognized by the authority. Taken examination and certificate of passing the exam to be submitted to authority. 

• Copy of PAN Card – Attested by at least Two Director of Company
• Copy of Certificate of Incorporation (COI) – Attested by at least Two Director
• Copy of Memorandum and Article of Association or LLP Agreement – Duly certified by Chartered Accountant
• Board Resolution
• Shareholding Pattern
• Details of Statutory Auditor and Principal Banker
• List of Associate Companies/concern with activity and interest thereon
• Net Worth Certificate from Statutory Auditor
• Snap shots of contents of proposed website along with proof of domain registration
• Confirmation of place of hosting website such as registered office, corporate office
• List of person who have control over or responsibility for the website contents in relation to Insurance Web Aggregation
• Audited/unaudited financial statement of Company
• Business plan for next three years
• Details of infrastructure including IT infrastructure available
• Organization Chart showing functional responsibilities
• User ID and Temporary Password (with only view permission) to verify the Aggregation Website, Portal/LMS by IRDAI I.T. Department in a closed cover.
• Director/Partner KYC, Profile and CV with experience certificate
• Shareholder/Partner KYC, Income Tax Return and Net Worth Certificate
• Principal Officer KYC, CV, Business Profile and Experience Certificate in addition to academic qualification with certification from authority