Web aggregators play a pivotal role in boosting the insurance sector. Being a web-based portal, web aggregators mitigate various burdens of the insurers by enabling services like policy comparison, KYC, policy issuance per IRDAI guidelines, etc. One of the prominent examples of web aggregators is the Policy Bazaar. It is India’s largest insurance aggregator portal, providing various like policy comparison, renewal, claim processing, claim tracking, etc. As the number of internet users in India continues to grow, the future of web aggregators seems incredibly bright. Starting a business as a web aggregator requires adherence to several IRDAI regulations concerning form filing, infrastructure, data privacy, inspection, etc. Let’s scout all the legalities concerning the commencement of web aggregator business in India.
IRDAI Regulations for Starting a Web Aggregator Business in India
Adherence to the following IRDAI regulations is vital to starting a business Insurance web aggregator in India:
- The applicant firm must have a company registration under the Companies Act, 2013.
- The directors or partners of the applicant firm should be Indian.
- The MOA of the firm must reflect the main object as the web aggregation business.
- Engagement with other businesses, say for example banking or real estate, is not allowed once you apply for the web aggregation business license.
- The track record of the applicant firm does not show any connection with businesses governed by IRDAI, meaning the applicant must be relatively new to the web aggregation business.
- The applicant firm should not be engaged in a business tie-up with a specific insurer.
- The principal officer’s qualification should fulfill the norms cited in Form C. Also, the PO must have a passing certificate of IRDAI-recommended exams, reinforcing the suitability for the position.
- All the main officials, including PO, promoters, directors, and shareholders should meet the fit and proper criteria of Form D of the Regulations.
- The Authorised Verifiers and telemarketers serving the business must be IRDAI-certified.
- Adherence to the Form W and V of the regulations is paramount as they reinforce harmonized conduct.
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Key IRDAI Regulations To Consider When Applying for a Web Aggregator License
Ensure to abide by the given IRDAI regulations when applying for a Web Aggregator License:
- Form A is the prescribed application for Insurance Web Aggregator License in India
- Form A must be accompanied by a standard non-refundable fee of Rs.10,000. The fee must be submitted via Electronic Fund Transfer or DD drawn in favor of the competent authority.
- The intent of pursuing activities like outsourcing and telemarketing should be explicitly mentioned in the application form.
- Disapproval of the application in the past may hinder the current situation, meaning the rejection may be on the card.
- A 30-day timeline is granted to the applicant for resolving any matter raised by the authority during the inspection.
- The company’s financial standing should be sound enough to address the expenses of the web aggregator business.
- The applicant firm must have an operational website that renders the web aggregator services.
Underscoring IRDAI Regulations Concerning Financial Obligations
- The applicant firm must have a minimum paid-up capital of worth Rs.25 lakh.
- Firms registered under the Companies Act 2013 must have capital in the form of equity shares. Likewise, firms registered under the LLP Act 2008 must have a cash arrangement for reinforcing the contribution of active partners.
- When applying for a credit or loan, the company cannot use shares as collateral.
- The firm’s net worth should not be equivalent to or higher than the minimum capital requirements. Reviewing this is paramount twice a year on a half-yearly basis. The mandatory review timeline is 30th September and 31st March every year.
- Any breach of regulations, regardless of gravity, must be intimated to the authority within 15 days of occurrence. The same must be resolved within 30 days of filing the report.
- Non-adherence to the net worth requirement after 30 days can compel the authority to cease the business operations.
- As soon as the book of account is finalized, the applicant must prepare the Net worth Certificate, get it certified by CA, and share it with the IRDAI every year.
IRDAI Regulations Concerning the Grant of Web Aggregator Business
The issuance of the registration shall be done via Form E of Schedule I of the Regulations only if:
- IRDAI-recommended guidelines for the code of conduct have been met.
- The applicant has taken due care of the IRDAI Act, 1999, and the Regulations, Circulars, and Guidelines concerning various business activities, including solicitation, customer support, KYC, etc.
- The applicant has shared the non-compliance as advised, if any.
- The applicant has resolved the client’s grievance within the stipulated timeline i.e. 14 days.
- The applicant has followed the IRDAI-recommended format for record management or documentation.
- The applicant has ensured round-the-clock and hassle-free availability of records to interested parties.
Mandatory Paperwork for Insurance Web Aggregator License
| Document/Requirement | Description |
| Certificate of Incorporation | A copy of the certificate issued by the Registrar of Companies. |
| Memorandum and Articles of Association/LLP Agreement | Certified copies verified by a Chartered Accountant (CA). |
| PAN Card of the Company | Photocopy of the company’s Permanent Account Number (PAN) card. |
| Director/Partner Resumes and Principal Officer Details | Resumes and qualification certificates of directors, designated partners, and the principal officer. |
| Website Documentation | Includes screenshots of the website, domain registration proof, hosting confirmation, and content managers’ details. |
| Net Worth and Shareholding Pattern Certification | Certificate from a CA with audited financial statements and annual reports for the last three years. |
| Business Plan Overview | A detailed plan outlining company goals and strategies for the next three years. |
| IT Setup Information | Detailed description of the company’s current IT infrastructure. |
| Organizational Structure | A chart showing the hierarchy, roles, and responsibilities within the organization. |
| Training and Certification Records | Certificates for completed training and exams by the principal officer and authorized verifiers. |
| “Fit and Proper” Declarations | Declarations by directors, promoters, partners, key personnel, and the principal officer as per Form D of the regulations. |
| Temporary Login Credentials | The sealed envelope containing a user ID and temporary password for IRDAI’s IT department verification. |
IRDAI Regulations Concerning Renewal and Validity of Web Aggregator License
- As per the IRDAI, the web aggregator license can stay active for 3 years from the date on which it was issued.
- A 90-day timeline i.e. 3 months before the expiration is offered for the renewal of this license. IRDAI requires applicants to file Form F for renewal.
- Documents for renewing the license can be found in the Form G.
- The authority might refuse the application unless the applicant successfully meets the criteria cited in the Form H of the Regulations.
Conclusion
Establishing or operating an Insurance web aggregator can be a bumpy ride. Owing to rigorous norms, many applicants find it overwhelming to get along with the registration process. However, with the support of a seasoned partner like Advisor, you don’t have to grapple anymore. Experience execution of the application and paperwork with a top-notch team of professionals fostered by Adviso. Being a premier agency, Adviso takes pride in supporting its clients extensively, be it a matter of comprehending IRDAI regulations or securing IRDAI approval.
Also Read: IRDAI Regulatory Sandbox: A Comprehensive Overview
