IRDAI's new web aggregator's rules to curb aggressive selling

The next time you get a call from a telemarketer asking you to buy an insurance product, make sure you are not made to buy only the specific product that they wish to sell.

The new guidelines for the web aggregators issued by the Insurance Regulatory and Development Authority of India (IRDAI) mandates that no insurance web aggregators should promote or push a particular product of a particular company either through its web-site or through distance marketing. Further, the product has to be sold based on the need analysis of the prospect.

IRDAI has recently launched Insurance Regulatory and Development Authority of India (Insurance Web aggregators) Regulations, 2017 and it will supersede Insurance Regulatory and Development Authority (Web Aggregators) Regulations, 2013.


While soliciting and procuring the insurance business, the Insurance Web Aggregator has to ensure that if the Web Aggregator is having tie-ups with more than one insurer, they have to provide prospective buyers with the details such as scope of coverage, term of policy, premium payable, premium terms and any other information which the customer seeks on all products available with them.

What are Web Aggregators?
Online access to life insurance plans is also available through insurance aggregators having an online presence. The websites of insurance aggregators work as comparison sites as they showcase plans of various insurers.

The objective of the Insurance Web Aggregator Regulations is to supervise and monitor Web Aggregator as an insurance intermediary who maintains a website for providing interface to the insurance prospects for price comparison and information of products of different insurers and other related matters.

Yashish Dahiya, Co Founder and CEO, Policybazaar.com on new IRDAI guidelines for Web Aggregators, says "The earlier guidelines made it difficult for web aggregators to offer products that could earn them reasonable income so that they could sustain themselves in the long run. Consumers will now also benefit from the easy access to these products online, as the digital channel is increasingly becoming their preferred mode for research and transactions."

Click here for a list of Approved Insurance Web Aggregators as 31-01-2017

Activities and functions of Web Aggregators
IRDAI has clearly defined and given a structure to some of the important activities and functions of the Web Aggregators. They include - Display of product comparisons on web-site and their conditions, transmission of leads by web aggregator to the insurer in a specified manner, the manner and process of sale of insurance online by web aggregators, sale of insurance by tele-marketing mode and other distance marketing for solicitation of insurance based on the leads generated from its designated website. Even the payment of remuneration of an Insurance Web Aggregator shall be governed by the regulations as set by IRDAI.

Some of the key highlights according to Dahiya includes - The solicitation of low-cost Ulips being allowed to be sold online on web aggregator's platform up to the limit of Rs 1.5 lakh premium, Remuneration for renewal of insurance policies such as motor insurance, health insurance and other similar policies has been allowed and the Remuneration through reward for efforts expended in selling zero commission product is now being provided.

Conclusion
Similar to buying insurance products offline through an insurance agent or a broker, buying life insurance online also needs to be an informed decision. It's better to speak to the web aggregator executive before initiating the transaction online so as to not end up buying the wrong product for your specific need. And, approaching them after doing at least a bit of research on what your requirements are, will make the process much more seamless, informative and free from surprises.