New regulations for insurance sales through the internet
Posted on: 20/Mar/2017 12:31:44 PM
Insurance Regulatory and Development Authority of India (IRDAI) have released the revised regulations for insurance sales through the internet.
In an effort to make a new platform for developing a digital mode of transactions in the field of Insurance, IRDAI has come up with the revised rules and regulations for selling insurance coverage through the internet. Experts suggest that the financial services in the country can be improved by increasingly adopting e-commerce.
So, IRDAI, while adopting this, in June 2016, had asked for suggestions and feedback regarding the creation of a revised rules and regulations for offering insurance coverage through the internet.
Subsequently, IRDAI has compiled the new regulations and sent the same in a circular on 9th March this year. This compilation presents, in full detail, the regulations to be followed while offering insurance cover through the internet.
As per the regulations, the organisations which are interested in selling insurance on the digital platform can create an ISNP (Insurance Self Network Platform) and start offering services while strictly following the regulations.
This digital platform can be in the form of a website or a mobile App or a combination of both. The Insurance Agencies or Interface agencies which are already carrying out their business through the internet have to obtain permission to set up ISPN. This should function strictly according to the prescribed regulations. ISNP website will carry all the details regarding types of services offered as expected by the customers.
While the new regulations were released, it was eagerly expected that the hugely popular e-commerce companies such as Amazon and Flipkart would immediately opt for the internet-based insurance business. However, as per the rules and regulations, only Insurance Companies, Agents, Insurance distributing companies, and institutions approved by the Insurance Authority can sell insurance policies through the internet websites.
It would be illegal for unapproved agencies to sell insurance through internet websites. Further, the approved agencies selling insurance through the internet should not take the recommendations made during the exchange of information from other websites.
The insurance can fix revised rate for the insurance premiums sold through the internet. However, this should be in line with the services offered by the company and its agents. Further, it has been announced that the insurance business done through the internet should not make offers such cash-back/. The option to pay be cash or cheque will be available.
As per the regulations of the digital platform for insurance, E-Insurance account is essentially required (electrtronic insurance account). This facilitates to receive policies in digital format.
The internet insurance business agency must obtain this E-insurance account within 15 days of selling an insurance policy. Further, e-mail ID and the cell number of the customer who acquired the policy through the internet will also be required. However, it is expected that further clarity will emerge with time.
KYC (Know Your Customer) Procedure is required for buying a policy through the internet and this can be done through the electronic KYC procedure or by using the Aadhar card. It is expected that these new regulations will bring changes in the procedure for getting insurance policies through the internet.
