Insurance Web Aggregator License
Insurance web aggregators serve as a single window that can help select an ideal insurance policy among ample options. Policy Bazaar is one of the prominent examples of Insurance web aggregators. They collect, compile, and illustrate data that allows policy-seekers to make an informed decision. From price, coverage, and norms, to premium details, web aggregators provide every possible information about diverse insurance products intuitively.
Acting as a bridge between customers and insurance companies, web aggregators play an instrumental role in strengthening the insurance sector and reinforcing trust among policy-seekers. To work as an Insurance web aggregator in India, one must apply for an Insurance web aggregator license. Let’s understand the legalities of operating as an web aggregator in India.
Understanding the Legal Implications for Insurance Web Aggregators
Legally, the insurance web aggregator works under the ambit of the Insurance Regulatory and Development Authority of India (Web Aggregators) Regulations, 2017 (“Regulations”). These service providers overcome the trouble of selecting an apt policy among a range of options, enabling expedited and accurate decision-making.
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Eligibility Criteria Concerning Insurance Web Aggregator License
Fullfillment of the following conditions is paramount to qualify as an Insurance web aggregator in India:
- The applicant firm operating as an LLP or an entity covered under the Companies Act, 2013 can apply for this license. It is worth noting that the directors or partners must be Indian nationals.
- The MoA i.e. Memorandum of Association of the applicant firm must reflect web aggregation business as its main object.
- Engagement with other business options is not permissible.
- The applicant firm must be new to this business and its record does not reflect any engagement with any activities that fall under the ambit of IRDAI, meaning it must not appointed as an insurance marketing firm, third-party administrator (TPA), corporate agent, surveyor, and loss assessor, etc at the time of application filing.
- The applicant should not have a strategic marketing tie-up with a specific insurer.
- The principal officer must have adequate field acumen as cited in Form C of the regulations. Also, he/she must have cleared the prescribed exams illustrated by the IRDAI.
- The principal officer, director, promoter, partner, shareholder, etc must align with the fit and proper criteria stated in Form D of the Regulations.
- Professionals like Authorised Verifiers and telemarketers must be IRDAI-certified.
- The applicant must not breach the code of conduct cited in Form W and V of the regulations.
How to Apply for Insurance Web Aggregator License: Analyzing Key Considerations
Keep the following considerations in mind when applying for Web Aggregator License in India:
- Form A of the Regulations is the standardized application for insurance Web Aggregator License in India
- The aforesaid application must go alongside a standard non-refundable fee of Rs.10,000 via DD drawn in favor of the competent authority i.e. IRDAI. Electronic Fund Transfer can also be used as another mode for fee submission.
- Applicants seeking to pursue outsourcing and telemarketing endevours should clearly mention the same in the application form.
- Any rejection by IRDAI in the past concerning the license can force the authority to revoke the application.
- If the authority prompts the applicant for any clarification, the applicant must respond within 30 days.
- The company must be fairly capable of addressing the expenses of this business.
- The presence of a dedicated website empowering insurance web aggregation activity is paramount.
Understanding Financial Obligations for Insurance Web Aggregator
- Rs.25 lakh is the minimum paid-up capital, which is non-negotiable.
- For entities operating under the Companies Act 2013, the capital must exist in the form of equity shares. In the case of LLP, the contribution of active partners should be in cash only.
- Shares of the company cannot be used as collateral for securing credit.
- The net worth of the company should be equal to or higher than 100% of the minimum capital requirements. The half-yearly review of the same is paramount, considering the time from 30th September to 31st March every year.
- Any non-compliance should be shared with the authority within 15 days of occurrence. The resolution of the same should come into play within 30 days of filing.
- Failing to maintain the net worth requirement after 30 days would lead to a stoppage of business operations.
- Post finalizing the books of account, the applicant must share the Net worth Certificate (certified by CA) with the IRDAI every year.
Ground for the Grant of Insurance Web Aggregator License
IRDAI shall grant the registration in Form E of Schedule I of the Regulations only once they find the applicant meets the following conditions:
- Adherence to the code of conduct and conditions specified by the IRDAI is paramount.
- Complying with the IRDAI Act, 1999 and the Regulations, Circulars, and Guidelines is vital, be it a matter of soliciting insurance or providing info to policyholders.
- Reporting of non-compliance and its resolution within a stipulated time is mandatory.
- 14 days is the timeline for redressing the client’s grievance.
- Record management or documentation must be pursued in the IRDAI-recommended format. The access to the document shall stay active 24×7.
Documents to Apply for Insurance Web Aggregator License
| Document | Description |
| Certificate of Registration or Incorporation | Copy of the certificate issued by the Registrar of Companies. |
| Memorandum of Association and Articles of Association/LLP Agreement | Certified copy by a Chartered Accountant (CA). |
| Company PAN Card | Copy of the company’s PAN card. |
| Resumes of Directors/Designated Partners and Principal Officer | Includes their qualification certificates. |
| Website Details | Screenshots of the proposed website, proof of domain registration, confirmation of website hosting location, and a list of people responsible for website content. |
| Net Worth and Shareholding Pattern Certificate | Certificate from a CA, plus copies of audited accounts and annual reports for the last three financial years. |
| Business Plan | Outline of the company’s business plan for the next three years. |
| IT Infrastructure Details | Information on the company’s current IT setup. |
| Organizational Chart | Shows roles and responsibilities within the organization. |
| Training and Exam Certificates | Certificates for the principal officer and authorized verifiers. |
| “Fit and Proper” Declarations | Statements from the principal officer, directors, promoters, partners, and key personnel as per Form D of the Regulations. |
| User ID and Temporary Password | Provided to IRDAI’s IT Department for verification of the website/portal (submitted in a sealed envelope). |
Validity and Renewal of Insurance Web Aggregator License
The insurance web aggregator license stays valid for 3 years from the date of the grant. The renewal of the same must be done within 90 days of expiration. Form F is supposed to be used for license renewal. Refer to Form G of the Regulations to ascertain renewal documents. Approval of the application depends on the fulfillment of criteria cited in the Form H of the Regulations.
Conclusion
Stepping into the world of Insurance web aggregators present companies with immense opportunities and challenges. Given the labyrinth of compliances this business offers, ensuring a long-term commitment to serving policy-seekers transparently and holistically can be an uphill task. That’s where a reliable and seasoned partner like Adviso comes into play. With years of experience and a robust network of professionals, Adviso makes a business journey seamless no matter the intricacies or legal hurdles. Connect with Adviso if you seek a hassle-free start of your corporate quest.
