IRDA warns against fake insurers working in the guise of logistic providers

 The Insurance Regulatory and Development Authority (IRDA) has made an announcement, asking people to be careful about fake insurers specifically the ones who are actually just some logistic service providers.

The circular says “It has come to the notice of the IRDA that a few entities under the banner of cargo carriers, couriers, logistic providers and transporters are charging consideration from their clientele towards their contractual liabilities using the term insurance,”.

As per the laws, only entitites which are approved and hold a valid licence from IRDA can offer insurance products and collect insurance premia.

IRDA asks Life Insurance companies to share a product planner

IRDA has asked Life Insurance companies in India to share a detailed annual product plan going forward. While currently the industry works on a file and use approach, going forward there is expected to be a more structured approach towards launching new Life Insurance products. IRDA has told Life Insurance players that the would need to share a product calendar, and for any new product beyond the first 5 the insurer would need to justify why this product is needed.

Also for each product a detailed market research would need to be undertaken and an assessment report shared.

List of Web Aggregators licensed by IRDA

As of May 2013, following are the IRDA licensed web aggregators that can operate in India.

Approval No. Applicant Web Address Status
IRDA/WEB/AGG/MUM/001 iGear Financial Services Pvt. Ltd. Valid
IRDA/WEB/AGG/UP/002 Accurex Marketing and Consulting Pvt. Ltd Valid
IRDA/WEB/AGG/ND/003 Great Indian Marketing Consulting Services Pvt. Ltd Valid
IRDA/WEB/AGG/MAH/004 Voila Consultancy Services India Private Limited Valid
IRDA/WEB/AGG/BAN/005 eMudhra Consumer Services Ltd. Valid
IRDA/WEB/AGG/HYD/006 I Call Soft (P) Ltd Valid
IRDA/WEB/AGG/MUM/007 Policy Mantra Insutrade Pvt. Ltd Valid

Insurance Web Aggregator – IRDA definition and guidelines

IRDA, the Insurance regulator has issued guidelines for a new category of players – the Web Aggregators.

IRDA’s definition of Web Aggregators: IRDA defines a web aggregator as a legal entity that is

  •  Company registered under Companies Act, 1956 (1 of 1956)
  • Approved by IRDA under the Web Aggregator Guidelines
  • Owns & manages a website that provides information and online price comparison for insurance products
  • Generates and sells “leads” to Insurance companies or their agents/brokers

IRDA Web Aggregator Guidelines:

  • Only factual and unbiased content about Insurance products and companies to be put up
  • Shall not show ratings, recommendations or best-sellers
  • Clear notice to visitors that their details can/will be shared with the insurance companies/ brokers
  • No advertisements or sponsored content on the web aggregators portal
  • Accurate and up-to-date product comparisons should be there
  • Leads can be shared with a maximum of 3 insurers, if the customer shows interest in buying but doesnt fill up any preferences
  • Leads should be shared securely and within 5 days of customer’s applying online
  • Leads to be charged at Rs 10/- maximum
  • Flat fee of Rs 1 Lakh max for each product listed on the site
  • Max of 25% of premium as sales commission for any actual sale that happens on the lead. And this will be calculated basis the actual premium collected by the insurer.

Update July 2013:  IRDA has issued a new draft of guidelines seeking to build more controls around the web led distribution model in Life and Health Insurance. Web aggregators was new category that IRDA had defined in 2010/11 wherein portals doing comparison and selling leads to insurers were to comply.
The new set of draft guidelines are around increasing the realm of control that IRDA has over the web channels. Some of the key highlights of these guidelines are:

  • A web aggregator cannot buy leads or have tie-ups with other portals
  • Web aggregators cannot do comparison on social media sites
  • Need to have a Leads Management System (LMS) which needs to undergo an IT audit every 6 months