Insurance Web Aggregator License

An Insurance Web Aggregator (IWA) is a platform or website that allows consumers to compare insurance products from multiple insurance companies in a digital format. It acts as an intermediary between insurance companies and customers, providing comparisons of policies, premiums, terms and conditions. IWAs typically offer a wide range of insurance products, including life, health, motor, and travel insurance, to help consumers make informed decisions based on their needs. This service often helps consumers find the most affordable and suitable insurance options by comparing offers from different insurance companies.

What is an Insurance Web Aggregator License?

An insurance web aggregator license is a legal authorization granted by the Insurance Regulatory and Development Authority of India (IRDAI) to entities that wish to operate as insurance web aggregators in India. This license allows aggregators to provide an online platform for consumers to compare and evaluate insurance products, while also offering detailed policy information such as premium rates, coverage options, and claims procedures. 

This license is mandatory for any business or individual who wants to operate an insurance web aggregator website or platform. Without proper licensing, no organization can legally operate an aggregator platform in India. The license certifies that the aggregator platform complies with regulatory guidelines, ensuring transparency and consumer protection in the insurance product comparison and selection process.

Important Terminology of Insurance Web Aggregator License

• Authorized verifier: An authorized verifier is an individual who works for a web aggregator, insurance company, or teleadvertiser. Their role includes selling and procuring insurance through telemarketing and distance marketing, having undergone the required training and passed the examination prescribed by IRDAI.
• Distance marketing: Distance marketing refers to the process of selling insurance products without the physical presence of a customer, using phone, SMS, email, or other web services to engage potential customers.
• Key management personnel: Key management personnel (KMPs) include executives such as the CEO, COO, CMO, CFO, and heads of technical and IT departments, who play a critical role in the management and operation of the organization.
• Lead management system: A lead management system includes the process of capturing, filtering, validating, and distributing leads from customer inquiries, ensuring efficient follow-up and closure of insurance sales.

There are several benefits of obtaining an insurance web aggregator license:

• Legal authorization: The license gives the aggregator legal permission to operate and offer comparison services for insurance products in India. This legal framework helps build trust with consumers and insurers.
• Increased visibility: Being licensed by IRDAI adds credibility to the web aggregator’s platform. Customers are more likely to trust a regulated entity, which leads to increased website traffic and more engagement.
• Consumer confidence: Since the platform works under strict IRDAI guidelines, customers are assured that the information provided is reliable, up-to-date and unbiased, leading to higher customer satisfaction.
• Access to insurance companies: Insurance companies prefer to partner with licensed aggregators as it provides a level of assurance that the platform adheres to regulatory practices. This could open doors to collaboration with different insurers.
• Revenue opportunities: Once licensed, insurance web aggregators can earn revenue through commissions, leads, and affiliations with insurance providers. This opens up potential business avenues.
• Market growth: The insurance sector in India is growing rapidly, and an aggregator platform with the required licenses can take advantage of this growing market, and expand its reach to consumers across the country.

To obtain Insurance Web Aggregator Registration Certificate (License), applicants must satisfy the following criteria:

• Business structure: The applicant must be a company under the Companies Act, 2013, or a Limited Liability Partnership (LLP) under the LLP Act, 2008. LLP partners must be Indian residents.
• Business objective: The applicant's business objective must focus solely on the web aggregation of insurance products, as stated in the Memorandum of Association (MoA).
• Clean records: The applicant cannot be registered as an insurance agent, corporate agent, surveyor, TPA, or any other intermediary under IRDAI regulations.
• No referral arrangements: Policyholders cannot receive compensation or benefits for referring others to the insurer.
• Qualified personnel: The Principal Officer must meet the qualifications specified by IRDAI, undergo training, and pass the required examination.
• Fit and proper criteria: The Principal Officer, promoters, directors, partners, shareholders, and key personnel must meet the "fit and proper" criteria outlined by IRDAI.
• Telemarketing staff qualifications: Telemarketing staff must pass the IRDAI-specified examinations.
• Compliance history: The applicant should not have violated IRDAI regulations and code of conduct.
• Previous application status: IRDAI must not have rejected or the applicant withdrawn their application in the preceding financial year.
• Net worth: The applicant must have a minimum paid-up capital of Rs. 25 lakh and must ensure that capital is unencumbered. The applicant must review and report their net worth status semi-annually on September 30th and March 31st.
• Non-compliance reporting: Non-compliance must be reported to IRDAI within 15 days, and compliance must be restored within 30 days.
• Business suspension: Failure to maintain the required net worth after 30 days results in the suspension of the business.
• Net worth certificate: A Net worth Certificate, certified by a Chartered Accountant, must be submitted annually after finalizing the books of accounts.

Compliance Requirement for Insurance Web Aggregator License

• Board approval: Insurance Web Aggregators (IWAs) must have a board-approved plan outlining how they sell insurance, partner with insurers, manage customer complaints, submit reports, and other business details. This plan must be reviewed every three years.
• Insurance cover: IWAs must maintain professional indemnity insurance as specified in Form K of the Insurance Web Aggregators Regulations, 2017, throughout their registration period.
• Financial records: IWAs must keep detailed financial records, including balance sheets, profit and loss statements, and income reports. These must be submitted to the regulator with an auditor's report within 90 days of the year-end.
• Keeping records: IWAs must retain electronic records for at least 10 years, covering sales leads, client complaints, insurance policies, and KYC information, among others.
• Disclosing information: IWAs must submit bi-annual reports detailing business placed with insurers and disclose significant changes like alterations in structure or legal issues promptly.
• Following the rules: The Principal Officer must confirm annual compliance with all applicable regulations to the regulator.
• Security and audits: IWAs must ensure compliance with data security standards and conduct annual information security audits, submitting the reports to the regulator and insurers.
• Annual compliance report: IWAs must obtain an auditor's certificate confirming compliance with IRDAI regulations and submit it alongside their annual report.

The documents required for insurance web aggregator license are:

• Copy of Certificate of Registration or Incorporation issued by the Registrar of Companies.
• Copy of Memorandum of Association and Articles of Association or LLP Agreement duly certified by a CA.
• Copy of PAN Card of the company.
• Certificate from a CA for the company's net worth and shareholding pattern, along with copies of the Audited Accounts and Annual Report for the previous three financial years.
• Details of infrastructure, including available IT infrastructure.
• Details and declarations of the principal officer, directors, promoters, partners, and key management personnel relating to the "fit and proper" criteria as specified in Form D of the Regulations.

The steps involved in obtaining insurance web aggregator license are: 

• Application submission to IRDA: The first step in obtaining an Insurance Web Aggregator license is to submit an application to the Insurance Regulatory and Development Authority (IRDA). The application format must adhere to the guidelines outlined in Schedule I – Form A of the IRDA Act.
• Payment process: Applicants are required to pay the prescribed non-refundable fee through electronic fund transfer or demand draft. The payment is made in favor of the Insurance Regulatory and Developmental Authority and should be payable in Hyderabad.
• Application for outsourcing and telemarketing services: In addition to the primary application, applicants must submit a request if they intend to carry out outsourcing and telemarketing services. This should be included along with the main application form to avoid delays in processing.
• Compliance with eligibility criteria: IRDA has set specific eligibility criteria for web aggregators, including organizational structure, infrastructure, and operational capabilities. Applicants must ensure they meet all these criteria before applying for the license.

The Insurance Web Aggregator License, issued by the Insurance Regulatory and Development Authority of India (IRDAI), is valid for a period of three years from the date of issuance. This license allows entities to operate as web aggregators, providing customers with access to information about insurance products from various insurers. The license ensures that these aggregators adhere to the regulatory standards set by the IRDAI, ensuring transparency, fairness, and consumer protection in the insurance sector. It also plays a crucial role in facilitating informed decision-making for customers by offering a comparative view of insurance products online.

To renew the Insurance Web Aggregator License, the aggregator must submit an application for renewal to the IRDAI in Form F at least 30 days before the current registration expires. However, they can apply up to 90 days before the expiration date. The application must be accompanied by the necessary documents as specified in Form G of the Regulations. This process ensures compliance with the regulatory requirements set by the Insurance Regulatory and Development Authority of India (IRDAI) for the continued operation of web aggregators in the insurance industry.

The fees for the Insurance Web Aggregator License vary based on factors such as business size, compliance costs, and technology infrastructure. Larger aggregators or those offering extensive services typically face higher fees. Compliance with IRDAI norms affects renewal fees, which are based on the previous year’s operations. Additional costs include an application processing fee for administrative review and technology infrastructure expenses to meet IRDAI’s security and technical standards.

Corpseed is one of the top consulting firms, offering comprehensive assistance in the Insurance Web Aggregator License process, guiding businesses through the necessary steps. With deep knowledge of the regulatory landscape, Corpseed helps clients navigate complex legal requirements for obtaining this license. The team ensures that all documents are properly prepared, minimizing the risk of delays. Some of the key ways Corpseed can assist include:

• Regulatory compliance: Ensuring that businesses meet all necessary guidelines and requirements set by the Insurance Regulatory and Development Authority of India (IRDAI).
• Document preparation: Helping to gather, review, and submit all the essential documents needed for the application, including business plans, financial statements, and more.
• Application filing: Managing the application submission process to make sure everything is done accurately and on time.
• Ongoing support: Offering continuous support after the license is granted to help businesses stay up to date with any changes in regulations.