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Insurance Web Aggregator Licence

Insurance Web Aggregator Licence

Insurance Web Aggregator Licence is governed by IRDAI (Insurance Web Aggregator) Regulations 2017. All the application for registration for Insurance Web aggregator is accessed from IRDAI Portal.

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Insurance Web Aggregator Licence

Comprehensive Guide on Insurance Web Aggregator License in India

1. Introduction

The insurance sector in India is witnessing rapid growth, with an annual increase of 15%. Insurance is broadly categorized into:

  • Life Insurance
  • General Insurance, which includes:
    • Vehicle Insurance
    • Health Insurance
    • Immovable and Movable Asset Insurance
    • Indemnity Insurance

With multiple insurance companies offering diverse products, an Insurance Web Aggregator plays a crucial role in simplifying the selection process for consumers by offering price comparisons and relevant information in a structured manner.

2. Role of Insurance Web Aggregators

Insurance Web Aggregators act as intermediaries between insurance companies and potential policyholders. Their primary functions include:

  • Collecting and compiling information on various insurance products
  • Providing a platform for comparison of different insurance policies
  • Enabling informed decision-making for consumers
  • Complying with regulations set by the Insurance Regulatory and Development Authority of India (IRDAI)

3. Registration Requirements for Insurance Web Aggregator License

To obtain an Insurance Web Aggregator License, businesses must comply with IRDAI (Web Aggregators) Regulations, 2017. The registration is done through the IRDAI platform and requires adherence to the following conditions:

3.1 Eligibility Criteria

  • The applicant must be a Company registered under the Companies Act, 2013 or an LLP under the LLP Act, 2008.
  • The primary objective of the business must be insurance web aggregation.
  • The company/LLP should not engage in any other business except web aggregation.
  • The company must appoint a Principal Officer with the required educational qualifications as per IRDAI regulations.
  • The company should not be a corporate agent, insurance agent, surveyor, or any other insurance intermediary registered with IRDAI.
  • A dedicated website or online platform should be in place for the web aggregation business before applying for registration.
  • The company must maintain a minimum capital requirement of INR 25 lakh, in the form of:
    • Equity share capital (for companies)
    • Capital contribution (for LLPs)
  • Net worth of at least INR 25 lakh must be maintained throughout the license validity.
  • The company must not have any referral arrangement with insurers.
  • Compliance with the Fit and Proper Criteria as per Form D of IRDAI regulations.
  • Any telemarketer employed for insurance solicitation must pass IRDAI-approved examinations.

3.2 Application Process

  • The application should be filed in Form A along with a non-refundable fee of INR 10,000 (+taxes) via Demand Draft (DD) or Electronic Fund Transfer.
  • If the applicant seeks outsourcing and telemarketing permissions, these must be explicitly mentioned.
  • The application must meet IRDAI’s scrutiny criteria, including financial soundness, compliance, and platform readiness.

3.3 Capital & Net Worth Requirements

  • Minimum Paid-up Capital: INR 25 lakh
  • Net Worth Requirement: At least 100% of minimum capital (INR 25 lakh)
  • Half-yearly review of net worth on 30th September and 31st March each year

3.4 Shortfall Reporting:

    • Report to IRDAI within 15 days in case of shortfall
    • Restore capital within 30 days or face immediate cessation of license

4. Grant of Insurance Web Aggregator License

IRDAI issues a Certificate of Registration (Form E) upon fulfillment of all regulatory conditions.

4.1 Key Conditions for License Holders

  • Compliance with IRDAI Code of Conduct
  • Solicitation of insurance policies within the permitted scope
  • Adherence to IRDAI Act, 1999 and other relevant regulations
  • Maintenance of proper records of policy-wise and authorised verifier-wise details
  • Prompt resolution of customer grievances within 14 days

5. Documents Required for License Application

  • Certificate of Incorporation from the Registrar of Companies
  • MOA & AOA / LLP Agreement, duly certified by a Chartered Accountant (CA)
  • PAN card of the company
  • CVs of Directors/Designated Partners and Principal Officer with qualification certificates
  • Website snapshots, domain registration proof, and IT infrastructure details
  • Chartered Accountant’s Certificate on net worth and shareholding pattern
  • Business plan for the next three years
  • Training and examination certificates of the Principal Officer
  • Notarized self-certifications on compliance with IRDAI regulations

6. Validity & Renewal of License

  • The Insurance Web Aggregator License is valid for three years from the date of issue.
  • Renewal applications must be submitted 30-90 days before expiration.
  • Renewal Fee: INR 25,000 (+taxes)
  • Late application fees:
    • INR 100 per day for applications received within 30 days of expiry
    • INR 750 additional fee for applications received up to 60 days after expiry
  • Failure to renew the license within the prescribed time results in automatic cessation of business operations.

7. Case Study: Successful Insurance Web Aggregator

Example: PolicyBazaar

PolicyBazaar, one of India’s leading insurance web aggregators, started by offering comparisons for various insurance products. By adhering to IRDAI regulations, maintaining compliance, and ensuring customer-centric services, PolicyBazaar has grown into a trusted platform for insurance buyers.

With expert assistance from Return Filings, you can ensure a smooth registration and compliance process for your Insurance web aggregator license. For professional assistance, reach out to us on email: info@returnfilings.com or on whatsapp: https://wa.me/919910123091.

8. Additional Resources

For further reading, explore:

  • A detailed understanding on Regulatory compliance for Insurance Companies
  • Guide on NBFC Registration in India
  • Registration guideline for Housing Co-operative societies registration
  • Detailed step-by-step process for Small Finance Bank License

Frequently Asked Questions (FAQs) on Insurance Web Aggregator License in India

A. General Information about Insurance Web Aggregators

  1. What is an Insurance Web Aggregator?

An insurance web aggregator is an intermediary licensed by the IRDAI that operates a website or online platform providing information about insurance products from various insurers. They facilitate comparison and provide quotes but do not sell insurance directly. Their role is to connect potential customers with insurers.

  1. What is the primary role of an Insurance Web Aggregator?

Their main role is to provide a transparent platform for comparing insurance policies, offering unbiased information, and generating quotes to help consumers make informed decisions.

  1. How is an Insurance Web Aggregator different from an Insurance Broker or Agent?
    • Web Aggregator: Provides information and comparison; does not sell or solicit insurance.
    • Insurance Broker: Represents the customer and advises on insurance needs, actively soliciting and selling policies.
    • Insurance Agent: Represents the insurer and sells policies on their behalf.

B. Licensing Process and Requirements

  1. Who grants licenses for Insurance Web Aggregators in India?

The Insurance Regulatory and Development Authority of India (IRDAI) grants licenses.

  1. What is the process for obtaining a Web Aggregator license?

The process involves:

    • Meeting the eligibility criteria.
    • Submitting an application to the IRDAI with a detailed business plan and technology demonstration.
    • Undergoing scrutiny and due diligence by the IRDAI.
    • Obtaining an in-principle approval.
    • Fulfilling other regulatory requirements.
    • Receiving the final license.
  2. What are the eligibility criteria for a Web Aggregator license?

Key criteria include:

    • The applicant must be a company incorporated in India.
    • It must have a sound business plan and a robust technology platform.
    • It must demonstrate the capability to provide unbiased and accurate information.
    • Key personnel must have the necessary qualifications and experience.
  2. What documents are required for a Web Aggregator license application?

A comprehensive set of documents is required, including:

    • Detailed business plan.
    • Technology platform details and demonstration.
    • Financial projections.
    • Information about the promoters and directors.
    • KYC documents.
    • Details of tie-ups with insurers.
  2. What are the technology requirements for a Web Aggregator platform?

The platform must be secure, user-friendly, and capable of providing accurate and up-to-date information on insurance products. It must also comply with data privacy regulations.

  1. How long does the Web Aggregator licensing process take?

The IRDAI’s processing time can vary and may take several months due to the scrutiny involved.

C. Operations and Compliance

  1. What are the responsibilities of a licensed Web Aggregator?

Key responsibilities include:

    • Providing unbiased and accurate information.
    • Displaying information in a clear and transparent manner.
    • Ensuring data privacy and security.
    • Adhering to IRDAI guidelines on advertising and marketing.
    • Maintaining records of transactions.
    • Complying with reporting requirements.
  2. Can a Web Aggregator sell insurance policies?

No, web aggregators cannot sell insurance policies. They can only facilitate the connection between the customer and the insurer.

  1. How does a Web Aggregator earn revenue?

Web aggregators typically earn revenue through commissions from insurers for leads generated through their platform. Transparency in commission disclosure is required.

  1. What are the compliance requirements for Web Aggregators?

Compliance is stringent and includes:

    • Adhering to IRDAI guidelines on operations and conduct.
    • Maintaining accurate records.
    • Filing regular returns with the IRDAI.
    • Complying with data privacy regulations.

D. Other Aspects

  1. What are the regulations related to data privacy for Web Aggregators?

Web aggregators must comply with all applicable data privacy laws and regulations, including those related to the collection, storage, and use of personal information.

  1. What are the penalties for violating Web Aggregator regulations?

Violations can lead to penalties, including fines and cancellation of the license.

E. Other generally asked questions:

          16.   How do I get a Web Aggregator license in India?

           Covered in the licensing process details.

  1. What are the IRDAI guidelines for Web Aggregators?

Refer to the IRDAI’s website for the latest circulars and guidelines.

  1. What is the eligibility criteria for becoming a Web Aggregator?

Discussed in the eligibility criteria section.

  1. What are the technology requirements for a Web Aggregator platform?

Secure, user-friendly, accurate information, data privacy compliant.

  1. How do Web Aggregators make money?

Commissions from insurers.

  1. What are the responsibilities of a licensed Web Aggregator?

Unbiased information, transparency, data privacy, compliance.

  1. Can a Web Aggregator compare all insurance policies in the market?

They are expected to provide a wide range of options but may have tie-ups with specific insurers.

  1. How do I choose a reliable Insurance Web Aggregator?

Look for IRDAI license, transparency, and user reviews.