IRDA has issued a draft regulation seeking to cut down remuneration for web aggregators. Presently, for each product displayed in the comparison chart, these web aggregators are allowed a maximum of Rs1 lakh which IRDA proposes to bring it down to Rs 50,000 annually.
The draft also suggests that web aggregators should not charge any lead generation fee from the insurance companies.
Krishnamoorthy Rao, CEO, Future Generali, says, “Web aggregators are being over paid by the insurance companies. The IRDA move will benefit small insurance players. It will also improve traffic on such websites since more products will be available online.”
A web aggregator, registered under the companies act and approved by IRDA, aggregates information about insurance products through comparison charts, product details and so on. At present, seven entities in India are authorized by IRDA to engage in web aggregator business.
Through the draft regulation, the regulatory body has also proposed to restrict web aggregators from displaying any information pertaining to promotion of products, ratings, rankings, endorsements of insurance products on their websites. The new draft has suggested that web aggregators should not display advertisement of any financial products.
Yashish Dahiya, CEO, Policybazaar.com said that the company is still in the process of analyzing the impact of the draft on the business model of Policybazaar.com
The draft has also sought to impose restriction on web aggregators for using social media platforms as marketing tools. The insurance regulator propose to stop web aggregators from tying up with other websites for promotion. As per the draft, “Aggregators can neither have multiple sites to sell insurance nor sell any product other than insurance.”
However, providing a major relief to them, the insurance regulator has proposed that web aggregator be allowed to integrate their websites with the insurance companies in order to facilitate services like online sales, registration of customer data, filling of proposal forms and online underwriting decision.
Through the draft regulation, the insurance regulator has also invited applications for new license as well as renewal of existing ones. IRDA has said that licenses should be renewed 90 days prior to the expiry.
The regulatory body has sought stakeholders’ views within 15 days in order to finalize the web aggregator regulation.