DEAR VIEWERS,
The Insurance Regulatory and Development Authority (IRDA) today issued stringent guidelines for websites vending information on insurance products of various companies and enabling comparison before buying.
For every product that is sold through these websites, the “web aggregators” earn a commission from the insurance company they have tie-up with. Until now, there have been no guidelines on the amount of commission payable or the pre-requisites to enter into an insurance web aggregation business. The new guidelines will help standardise norms.
As per IRDA’s draft guidelines, companies will now need to have a minimum net worth of Rs 10 lakh, and they will have to register themselves with IRDA to become eligible for providing information related to the insurance sector on their websites.
Starting February 2012, web aggregators would not be allowed any sponsored content on their website. They will not be allowed to use any rating, ranking, endorsement or bestsellers of insurance products. There would be cap of Rs 1 lakh on the fee paid by the insurance companies to the web aggregators. To plug the gap of paying fee via other means such as training, infrastructure development, Irda has disallowed “reimbursement of expenses” by insurers.
They will get remunerations only if leads provided by them result in sale, which is capped at 25 per cent of the total commission payable on the first-year premium. The current industry average per lead is around Rs 100. From February, it would come down to Rs 10.
“These guidelines will result in the end of insurance aggregation in India. Under these conditions it does not make any sense for us to function as aggregators in the market anymore”, said Yashish Dahiya, CEO, Policy Bazaar.
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