With the online medium of transaction becoming popular in the insurance industry, the Insurance Regulatory and Development Authority (Irda) seems to have recognized the need to standardize norms for Web aggregators and has sought to bring them under its wings.
Web aggregators are dedicated sites that offer information on insurance products, including premiums and key features, and even enable comparison. For every deal that materializes through them, they earn a commission from the insurance company or broker they have a tie-up with.
As of now, there are no standards that Web aggregators follow and each is free to showcase the product and features of its choice. Some sites fail to update the premiums on time. Moreover, the commissions they charge vary between companies. In a bid to set such practices right, Irda has laid certain guidelines through a draft proposal issued on 16 March.
“Buyers of insurance products increasingly access websites to know the features and to compare prices of the products offered by different insurers. The draft guideline aims to bring in uniformity in display of prices and key features of the same by Web aggregators,” according to a statement released by Irda.
As per the Irda’s draft guidelines, companies will now need to register themselves with Irda to become eligible for providing important information related to the insurance sector on their websites.
They will also be required to provide key features—listed by Irda—of insurance products across all insurers and all insurance genres, apart from updating premium amounts regularly.
Irda also seeks to standardize the commission Web aggregators charge from insurance companies and brokers. They will get remunerations only if leads provided by them result in sale and that too is capped at 25% of the total commission payable on the first-year premium.
“Through the new proposal, Irda wants to regulate Web aggregators. It also wishes to restrict the space to reliable portals,” said K.G. Krishnamoorthy Rao, managing director and chief executive officer, Future Generali India Insurance Co. Ltd.
What it means for you
“Web aggregators will have to follow a certain code of conduct and it is likely that information carried on such websites will become much more accurate, helping customers take informed decisions,” says G.V. Nageshwar Rao, managing director and chief executive officer, IDBI Federal Life Insurance Co. Ltd.
Customers can now look forward to more accurate and reliable information.