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Guideline
Ref. No:IRDA/ADMN/GDL/MISC/253/11/2011 Date:21-11-2011
Guidelines on Web Aggregators
These Guidelines are issued in exercise of powers conferred upon the Authority under Section 14(1) of the IRDA Act, 1999 to protect the interests of the prospects / policyholders and to regulate, promote and ensure the orderly growth of the insurance industry.
 
1.    Definitions
 
1.    “Act” means the Insurance Act, 1938 (4 of 1938)
 
2.    “Agreement” for the purpose of these guidelines means an agreement entered into between a web aggregator and an Insurer or an agreement entered into between a web aggregator and an Insurance Broker.
 
3.    “Authority” means the Insurance Regulatory and Development Authority established under the provisions of Section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999).
 
4.    “Insurance Broker” – as defined in Regulation 2 (i) of IRDA (Insurance Brokers) Regulations, 2002.
 
5.    “Insurer” – as defined in Section 2 (9) of Insurance Act, 1938.
 
6.    “Lead” – For the purpose of these guidelines “lead” means information pertaining to a client who has accessed the website of a web aggregator and has submitted contact information of any kind, for obtaining information on prices or features/benefits of insurance products.
 
7.    “Web Aggregator” – For the purpose of these guidelines, a web aggregator is a Company registered under Companies Act, 1956 (1 of 1956), approved by the Authority under these guidelines, which maintains/owns a web site and provides information pertaining to insurance products and price comparisons of products of different Insurers and offers leads to an Insurer / Insurance Broker.
 
8.    All words and expressions used and not defined in these Guidelines but defined in the Insurance Act, 1938 ( 4 of 1938), the Insurance Regulatory and Development Authority Act, 1999 or in any of the Regulations / Guidelines made thereunder shall have the meanings respectively assigned to them in those Acts or Regulations / Guidelines.
 
 
 
 
2.    Prohibition on Unapproved Entities
 
No person shall offer comparative information on insurance products on the websites owned, maintained, serviced or being utilised in any other manner by him for the purpose of transmitting leads to any entity engaged in insurance business except as provided under these guidelines.
 
 
3.    Application seeking grant of approval/renewal
 
1.    The application seeking grant of approval of web aggregator shall be made by the applicant to the Authority, accompanied by a fee of rupees ten thousand paid by way of a bank draft in favour of ‘Insurance Regulatory and Development Authority’ payable at Hyderabad and containing such information as specified in Form-A.
 
2.    The approval accorded by the Authority shall be valid for a period of three years from the date of approval.
 
3.    Web aggregators interested in continuing in the business shall apply with the Authority for renewal of the approval two months before expiry of the previous approval accompanied by a fee of rupees ten thousand paid by way of a bank draft in favour of ‘Insurance Regulatory and Development Authority’ payable at Hyderabad and containing such information as specified in Form-A.
 
4.    The application for renewal of approval shall be dealt with in the same manner   as specified under Clauses 4, 5 and 6 of these Guidelines.
 
5.    The Authority, on being satisfied that the applicant fulfills all the conditions, shall renew the approval for a period of three years.
 
4.    Application to conform to the requirements:
 
1.    An application which is not complete in all respects shall be liable to be rejected. Provided that, before rejecting any such application, the applicant shall be given an opportunity to complete such formalities within a period of thirty days from the date of receipt of communication from the Authority.
 
2.    The Authority may require the applicant to furnish such further information or clarification as may be required by it.
 
5.    Eligibility criteria for approval of the Web Aggregator:
 
1.    For the grant of approval of the web aggregator, the applicant shall ensure the fulfillment of the conditions including but not limited to the following:
 
a.    The applicant is a company formed and registered under the Companies Act, 1956 (1 of 1956).
 
b.    The Memorandum of Association of the company shall have the business of web aggregation as one of its main objects.
 
c.    The applicant shall have a net worth not less than rupees ten lakh as on the date of application.
 
d.    The applicant shall not have a referral arrangement with an Insurer.
 
e.    The applicant shall not be licensed / registered as an insurance agent, corporate agent, microinsurance agent, TPA, surveyor, loss assessor or an Insurance Broker under the relevant Regulations framed by the Authority.
 
f.     The applicant shall not be a related party of an insurer, insurance broker, corporate agent, microinsurance agent, TPA, Surveyor or a loss assessor at the time of application for web aggregator.
 
2.    While considering the application, the Authority may, if it so desires, verify the information furnished by the applicant including the supporting documents and also inspect the applicant’s offices and infrastructure.
 
3.    The Authority may, after considering the application with reference to the matters specified in these guidelines, grant approval to the web aggregator which shall be valid for a period of three years from the date of grant of such approval.
 
6.    Procedure where approval / renewal is not granted
 
1.    The Authority may reject the application made by the applicant to the Authority seeking grant of approval / renewal, if it does not satisfy the eligibility criteria laid down under these guidelines or if the grant of such approval is not found to be in public interest. 
 
2.    The decision of the Authority along with the reasons to be recorded in writing shall be communicated to the applicant within a period of fourteen days from the date of the decision.
 
3.    In case of rejection of application for web aggregator, the applicant may appeal against the decision to Chairman of the Authority within thirty days from the date of the Authority’s letter communicating such rejection.
 
 
7.    Agreement with a web aggregator:
 
1.    An insurer / Broker desirous of obtaining leads from web aggregator shall enter into an “agreement” with the web aggregator approved by the Authority which shall necessarily include details relating to, though not limited to, the following:
 
a.    Remuneration for the leads to be shared
b.    Time-frame and mode of transmission of leads to be shared
c.    Onus of complying with regulatory and other legal requirements on both the parties to the agreement
d.    Identifying the different data elements to be shared (viz., name of prospect / client (visitor of the web site), contact details etc)
 
2.    The agreement between an insurer/insurance broker and web aggregator shall be valid for a period of three years from its date.
 
3.    The web aggregator shall file the agreement to the Authority within fifteen days from the date of entering the agreement.
 
8.    Display of product comparisons on the web site:
 
1.    Web aggregators shall not display ratings, rankings, endorsements or bestsellers of insurance products on their website. The content of the websites of the web aggregators shall be unbiased and factual in nature; they shall desist from commenting on insurers or their products in their editorials or at any other location in their websites.
 
2.    The default/home page of the websites of the web aggregators shall clearly and prominently provide links to the product comparison charts and tables for each category of products covered by them. The visitor to the website should be given clear product options to choose from and once a particular option is chosen, a product comparison chart relevant to his choice shall be displayed. The product comparison chart shall have, interalia, columns to display a) the premium quoted by each insurer relevant to the age, health and other personal details of the client for the product category, policy/premium term, quantum of cover etc chosen b) the default underwriting requirements such as medical examination, diagnostics or other documents c) exclusions, limits or other conditions, if any c) key features of the product chosen.
 
3.    Web aggregators shall disclose prominently on the home page that the client/visitor’s particulars could be shared with insurers/insurance brokers.
 
4.    Web aggregators shall not carry any advertisements or sponsored content on their websites.
 
5.    Product comparisons that are displayed shall be upto date and reflect a true picture of the products.
 
6.    Web aggregators shall display product information purely on the basis of the information furnished to them by insurers.
 
9.    Transmission of leads to be shared:
 
1.    Web aggregator shall not transmit the data of a client to Insurer(s) other than the one(s) preferred by the client.
 
Provided that, if the client evinces interest in buying insurance but does not prefer any Insurer, web aggregator shall not transmit the lead to more than three Insurers in the same class of insurance business or one Insurance Broker.
 
 
2.    Web aggregator shall transmit the data of clients to Insurer / Broker:
           
(a) not later than five days of visit to the web site.
(b) reasonably securing the information of clients from unauthorized access and misuse;
(c) with a reasonable level of suitability, reliability and correctness, and;
(d) in compliance with generally accepted I.T. security procedures
 
10.Remuneration
 
Remuneration shall be payable to web aggregators by insurers in compliance with the following provisions:
 
a) A flat fee not exceeding rupees one lakh per year towards each product displayed by the web aggregator in the comparison charts of its web site.
 
b) An amount not exceeding rupees ten towards each lead transmitted by the web aggregator.
 
c) In addition to Clauses 10(a) and 10(b), an insurer may pay such fees or remuneration, by whatever name called, to the web aggregator for such lead that is converted into sales, which shall not exceed twenty five per cent of the commission payable or actually paid, whichever is lower, on the first year premium of the first policy sold on the basis of the lead obtained from the Web aggregator. The fees or remuneration to be paid shall form part of and be within the overall limits on the commission and expenses as provided for in sections 40B and 40C of the Act and the relevant rules and regulations made thereunder.
 
Providedthat in the case of life insurance policies procured, where the premium
is payable in other-than-yearly mode, the fee or remuneration shall be paid only to the extent of the first year premium installment/s and that have been received by the insurer
 
Provided furtherthat in case of long-term policies under general insurance, the
fee or remuneration shall be paid only to the extent of the premium installment/s in the first year of the policy and that have been received by the insurer.. 
 
Provided further that no remuneration is payable towards those leads where the contact information provided is proved to be false / wrong and any amount paid towards such leads shall be refunded to the insurer.
 
Provided further that where broker obtains leads from web aggregator, the fee or remuneration payable by the Broker shall be as per Clause 10(b).
 
11.Obligations of web aggregators
 
1.    Web aggregator shall display the particulars of validity of approval obtained from the Authority on its web site.
 
2.    Web aggregator shall state clearly and unequivocally that insurance is the subject matter of solicitation.
 
3.    At no point of time of its functioning, a web aggregator shall have net worth below rupees ten lakhs.
 
4.    At no point of time of its functioning, a web aggregator shall have referral arrangement with any Insurer or act as an insurance broker, corporate agent, microinsurance agent, TPA, Surveyor or a loss assessor.
 
5.    Product information displayed by web aggregators shall be authentic and be based solely on information received from insurers.
 
6.    Web aggregator shall maintain the records and the reports of its activities under the agreement with Insurer / Broker, in the manner specified in the agreement entered into between the Insurer / Broker and the web aggregator.
 
7.    Web aggregator shall along with its employees (whatever their designation may be) comply with all the provisions of the Act, the IRDA Act, 1999, the rules and regulations framed thereunder and other directions issued by the Authority from time to time.
 
8.     Web aggregator, its employees or promoters shall not accept any payment from Insurer / Insurance broker other than the remuneration specified in clause 10 of the guidelines.
 
9.    Web aggregator shall prominently display the names of insurers with whom it has an agreement to refer leads.
 
 
12.Obligations of Insurers / Brokers
 
1.    An Insurer / Broker shall not pay any fee or remuneration, by whatever name called, to web aggregators other than what is prescribed in section-10 of these Guidelines. They shall also refrain from reimbursing expenses incurred by web aggregators towards maintenance of data base, infrastructure, training, entertainment, development, communication, advertisements, sales, promotion and towards any other expense.
 
2.    An Insurer / Broker shall not pay any fee or remuneration, by whatever name called, on any type of renewal premium / policy payable from the second year and the subsequent years, to web aggregators.
 
  1. An Insurer / Broker shall not pay any fee or remuneration, by whatever name called, to any person/entity who owns/maintains a website not approved by the Authority under these guidelines that is engaged in web aggregation or product/price comparison.
 
4.    An Insurer / Broker shall not make any payment, by whatever name called, in the form of advance to a web aggregator.
 
5.    An Insurer / Broker shall not pay any remuneration towards lead generation after termination of agreement with web aggregator.
 
6.    An Insurer / Broker shall not pay any remuneration towards lead generation after the lapse of validity of approval given by the Authority to the web aggregator.
 
7.    An Insurer / Broker shall maintain records of leads / data obtained from each web aggregator, the details of the policies sold out of the leads / data thus obtained and the information regarding the payments made in Form B.
 
8.    An Insurer / Broker shall submit to the Authority, the records referred to in different sections of these guidelines and the reports, if any, of its activities as relevant for the purpose of these Guidelines, whenever called upon to do so.
 
9.    Insurers shall share product information and premium rates with web aggregators and the information so shared shall match with the product approved by the Authority.
 
10.An Insurance Broker which owns a website that displays product descriptions/comparisons, even though not a web aggregator shall comply, interalia, with Clause-8 of these guidelines which refers to display of product comparisons.
 
13.Action against the web aggregator:
 
The Authority may cancel the approval granted to a web aggregator or take any other action as deemed appropriate under the Act, in case the web aggregator fails to exercise due diligence or comply with any of the obligations under these Guidelines or act contrary to the provisions of the Act, Insurance Regulatory and Development Authority Act, 1999, the rules and regulations framed thereunder and such other directions as issued by the Authority from time to time.
 
Provided that no such action shall be initiated by the Authority and order passed thereafter without giving an opportunity of hearing to the web aggregator. 
 
14.Action against the Insurer / Broker:
 
An Insurer / Broker that fails to furnish any information or furnishes wrong information to the Authority relating to the agreement and transactions with web aggregator, or;
 
An Insurer / Broker that fails to comply with these guidelines and such other directions issued by the Authority from time to time shall be liable for action as provided under the provisions of the Act, the Insurance Regulatory and Development Act, 1999 (41 of 1999) and the relevant Regulations made thereunder.
 
Provided that no such action shall be initiated by the Authority and order passed thereafter without giving an opportunity of hearing to the Insurer / Broker.
 
 
15.Power of Authority to Inspect:
 
1.    The Authority may appoint one or more of its officers or a qualified chartered accountant as an inspecting authority to undertake inspection of the premises of the web aggregator to ascertain and see how activities are carried on, and also to inspect the books of account, records, and documents of the web aggregator for any of the purposes specified in the Clause 15 (2).
 
2.    The purposes referred to in Clause 15 (1) are as follows:
 
a)    to ensure that the provisions of the Act, rules and regulations are being complied with
b)    to investigate the affairs of the web aggregator suo moto in the interest of proper development of insurance business or in policyholder’s interest.
 
16. Power of the Authority to issue clarifications:
 
In order to remove any difficulties in respect of the application or interpretation of any of the provisions of these Guidelines, the Authority may issue appropriate clarifications.
 
17. These Guidelines shall apply with effect from 1st February, 2012.
 
 
 
 
 
                                                                            
 
 
 
 
 
 
 
 
 
 
 
 
 
FORM – A
 
Application for approval/renewal of Web Aggregator
 
Details of the proposed/Web Aggregator
1.         Name :
2.         Complete address:
3.         Details of registration including number, date, etc:
4.         Nature of its business:
5.         Date of commencement of business:
6.         Net Worth as at the end of financial year preceding the date of application:
7.         List of other group/associate companies, if any:
8.         Nature of the business of the other group/associated companies:
9.         Whether the company has any linkage, direct or indirect, with transaction or distribution of the business of insurance along with details, if any:
10.       Whether the company has a referral agreement with an insurer or is an insurance broker, agent, corporate agent, micro insurance agent, TPA, surveyor or a loss assessor
11.       Whether the company is bound by any confidentiality/privacy/non-disclosure agreements with its customers/clients whose data is proposed to be shared with the insurer along with details, if any:
12.       Details of website of the applicant/Web Aggregator
(a) Name of website
            (b) Categories of products/businesses for which aggregation is done on the website
12.       Any other relevant information required to be disclosed
 
I, the undersigned solemnly declare that the facts/details furnished in this application form on behalf of the insurer, are true to the best of my knowledge and that necessary due diligence has been carried out in respect of the details submitted in this form.
 
Place:
Date:                                                                                      
 
   Signature of the authorized person
 
 
Supporting Documents to be enclosed to the application:
 
 
1.    Demand Draft
2.    Memorandum of Association and Articles of Association
3.    Audited accounts of the company for the last three financial years or from the date of registration whichever is later.
4.    Copy of Certificate issued by the Registrar of Companies
 
 
 
 
 
 
 
 
 
 
Form – B
 
1.    Name of the Web Aggregator                        :
 
2.    List of leads forwarded by the
Web Aggregator, date wise                :
 
3.    No. of policies sold out of the leads
Obtained from the Web Aggregator   :
 
4.    Details of policies sold out of the leads forwarded by the web aggregator
 
Sl.No.
Name of the policyholder
Policy number
Date of the policy
Sl. No. in the list of items of leads obtained
New Business premium of the policy sold on the basis of leads
Web Aggregator fee paid
Column (7) as a % of (6)
1
2
3
4
5
6
7
8
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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