IRDAI has issued draft guidelines in which it has proposed to put web-aggregators under the ambit of insurance intermediaries. That means, web-aggregators can emerge as a new channel of distribution.
Currently, web aggregators compile and provide information about insurance policies of various companies on their websites. IRDAI has mandated web aggregators to provide unbiased information of insurance products on different types of policies like whole life insurance, term plan, health insurance, endowment, annuity etc. on their portals.
Web aggregators can charge an annual fee of Rs. 50,000 per product for displaying its feature on their websites. They can also charge for services at fixed rates for any other outsourcing work like collection of premiums from customers, etc. Through sales, they can charge a maximum of 30% of first year premium as lead generation fee.
If the proposal goes through, web aggregators will be entitled to earn commissions, in addition to the existing fee income. On remuneration, IRDAI said, “To be determined in line with commission, remuneration regulations. However, web aggregator to be allowed to charge a flat fee of Rs. 50,000 per product and undertake outsourcing activities on mutual basis.”
IRDAI has clarified that web aggregators need to acquire Insurance Self-Network Platform license to distribute insurance policies online.
Meanwhile, the regulator has proposed to increase the net worth requirement of web-aggregators from Rs. 10 lakh to Rs. 25 lakh. Also, the insurance regulator has hiked the limit of foreign direct investment (FDI) in web aggregator business from 26% to 49%.
As on March 2016, there are 16 web-aggregators in India.
