IFSCA (Insurance Web Aggregator) Regulations, 2022

Insurance is not something that is a new concept; it has been in the system for time immemorial. Insurance policies were available, but the choice of the best among the available ones was very difficult. But Insurance Web Aggregators are the ones who have made it easy to choose the best policy among the available ones.  All thanks to the newly efficient technology with the help of which the concept of Insurance Web Aggregator became possible. They give the true information regarding the different available policies on their website. They are governed by different laws, and IFSCA (Insurance Web Aggregator) Regulations, 2022 is one of them. As per the laws, it is mandatory to obtain an Insurance Web Aggregator License to run this business of IWAs. Hence, if you want to start this business, you must be aware of certain laws related to IWAs.  

What is the IFSCA (Insurance Web Aggregator) Regulations, 2022? 

In the year 2020, the International Financial Services Centre Authority (IFSCA) was established under the International Financial Services Centre Authority Act of 2019. It proposes that there should be a regulation for the Insurance Web Aggregators, and on the basis of that proposal, IFSCA (Insurance Web Aggregator) Regulations, 2022 came into force. This regulation was made under section 28(1), section 12 and section 13 of the IFSCA Act. Also, section 42D and 42E of the Insurance Act of 1938 has equally contributed. This is a law that is applicable to all the Insurance Web Aggregators. 

Key Provisions of the IFSCA (Insurance Web Aggregator) Regulations, 2022

These IFSCA (Insurance Web Aggregator) Regulations, 2022, have many conditions which must be followed by the Insurance Web Aggregators. Some of the key provisions of this regulation are given below for reference of the Insurance Web Aggregators as well as for the customers of IWAs: 

Applicability and Objective 

• It will be applicable to all the Insurance Web Aggregators 
• The main aim of this regulation is to establish a proper system for the registration of Insurance Web Aggregators 
• Set up a system for the oppression of the Insurance Web Aggregators  
• Make the management better 
• Hassle-free registration procedure 

Eligibility Criteria Under IFSCA Regulations of 2022

• Must have a registered entity to start the business of the Insurance Web Aggregators and the MOA of the entity must contain that the particular entity will do the business of Insurance Web Aggregators
• The applicant must not be involved in any other business activities other than the IWAs
• The principal officer leading this business venture must possess qualifications and training relevant to the insurance industry. Additionally, the applicant must meet the specific conditions outlined in Form C, Form D, Form V, and Form W, as stipulated in the regulations governing Insurance Web Aggregators.
• To operate as an Insurance Web Aggregator, the applicant must also have a minimum paid-up capital of Rs. 25 lakhs. This financial requirement ensures the entity’s financial stability and capability to conduct its business in this field.

Procedure to Get Insurance Web Aggregators License 

The first step in the process is to apply for a non-objection certificate from the Insurance Regulatory and Development Authority of India to use the term “Insurance Web Aggregator.” Once you receive this certificate, you need to set up a company or LLP for your business. After incorporation, appoint a principal officer and ensure they complete the required training. Next, open a bank account for your entity and deposit a fixed amount of Rs. 25 lakhs as paid-up capital into this account. 

Subsequently, submit an online application for the Insurance Web Aggregator License to the IRDA and upload all necessary documents. The IRDA will then review your application and may either raise inquiries or grant the license. If they raise inquiries, you must address them within 30 days, as failure to do so within this timeframe could lead to the application being rejected.

Conditions for Grant of License 

• Must carry on the business of Insurance Web Aggregators as per the terms and conditions on which the license has been issued by the competent authorities 
• Must comply with the provisions, rules and regulations of the applicable laws 
• Compliance with KYC norms is compulsory 
• Must follow the laws of the government for the anti-money laundering-related rules and regulations 
• Must inform the authorities in writing regarding the changes happening in the business
• Must solve the grievances of the policyholders 
• Compliance with the code of conduct policy is necessary 
• IWA must keep a record of the accounts and bookkeeping 

Summary of the IFSCA (Insurance Web Aggregator) Regulations

IFSCA (Insurance Web Aggregator) Regulations, 2022 contain many rules and regulations that need to be followed by the Insurance Web Aggregators. Some of the key regulations of the IFSCA (Insurance Web Aggregator) Regulations, 2022 are mentioned below in the table: 

Conclusion 

The IFSCA (Insurance Web Aggregator) Regulations, 2022, represent a significant development in the insurance industry, ushering in a new era of transparency and efficiency. These regulations were established under the International Financial Services Centre Authority Act of 2019 and are designed to govern Insurance Web Aggregators (IWAs). Key provisions include the eligibility criteria for obtaining an IWA license, a hassle-free registration procedure, and strict compliance with various legal and ethical standards. Only the bare reading of the IFSCA (Insurance Web Aggregator) Regulations, 2022 is not going to help you out if you are thinking about entering into the business of Insurance Web Aggregators. You have to take the help of an expert to set up this business because experience in implementing the law is very necessary.