Insurance Web Aggregator

IFSCA (Insurance Web Aggregator) Regulations, 2022

IFSCA (Insurance Web Aggregator) Regulations

Before the internet era, purchasing an insurance policy was a tedious process. There was a lack of awareness about the insurance policies available and what each insurance policy had to offer. One had to completely rely upon the local insurance agent hired by them for purchasing an insurance policy. Further, it was a lengthy process with frequent visits by the insurance agent to comply with the paperwork requirement. With the setting in of the western culture, people have no time to do anything so extensive and time taking. Thankfully the boom in Information Technology Sector, came to the rescue and made people more aware. The government has taken steps to make purchasing insurance policies easy by simply accessing the website of a recognized web aggregator. In this blog, we will discuss IFSCA (Insurance Web Aggregator) Regulations, 2022.

A web aggregator is an insurance intermediary which provides information about various insurance provided by different companies. Web aggregators accumulate and compile information about different insurance policies and provide it on their websites. In other words, they collect data about the various insurance policies offered by different companies and make it available on their website for any potential insurance policy buyers.

In 2017, the Insurance Regulatory Development Authority of India (IRDAI) notified the IRDAI (Insurance Web Aggregators) Regulations. Later when the International Financial Services Centre Authority (IFSCA) was established in 2020 it proposed a new regulation called the IFSCA (Insurance Web Aggregator) Regulations which came into effect on 31st January 2022. The purpose of these regulations is to provide a process for the registration and operations of Insurance Web Aggregators under the International Financial Services Centre. This will in turn bring it under the purview of the International Financial Services Centres Authority which is a statutory body for the development and regulation of financial products.

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

Following are some key provisions of the IFSCA (Insurance Web Aggregator) Regulations, 2022:

  • Eligibility criteria for registration as an Insurance Web Aggregator

Regulation 4 of the IFSCA (Insurance Web Aggregator) Regulations, 2022 prescribes the following eligibility criteria for registration as an Insurance Web Aggregator:

  1. It must be ensured that the provisions of disqualification as specified under sub-section (5) of section 42D of the Insurance Act, 1938[1] are not attracted to the Applicant, its Directors, Designated Partners, Key Managerial Personnel, Principal Officer, or Authorized Verifier.
  2. The main objective of the Applicant entity should be mentioned as the “business of web aggregation of Insurance products in the Memorandum of Association of the company, limited liability agreement of an LLP, or any other incorporation document of the Applicant.
  3. The Applicant must not be engaged in any other business apart from Web Aggregation of Insurance Policy products or Insurance broking.
  4. The Authorized Verifier should have undergone prescribed training and passed the examination as specified by the Authority.
  5.  It must be ensured that the Insurance Web Aggregator has not violated any of the obligations as specified in Shedule-15 and the Code of Conduct as specified in Schedule-16 of IFSCA (Insurance Web Aggregator) Regulations, 2022.
  6. The Applicant should have the necessary infrastructure with adequate office space, equipment, IT infrastructure, trained workforce to effectively discharge its business activities.
  7. It shall be verified by the Authority whether the Applicant or any other person directly or indirectly connected with the Applicant has been either refused any certificate or license by the Authority in the past; or has withdrawn the application during the preceding financial year from the date of application.
  8. The Principle Officer, Director(s), Promoter, Partner(s), Designated Partner, Key Management Personnel, and Controlling Shareholders must fit in the qualification and requirements specified by the Authority.
  9. The Promoters, Investors, Partners, and Controlling Shareholders of the Applicant should have a sound financial position to invest in the Applicant and that they are from a Financial Action Task Force (FATF) compliant jurisdiction or country.
  10. The Applicant must submit an undertaking that:
    • It does not have any referral arrangement with any of the Insurers,
    • It does not have any conflict of interest between the interest of policyholders and the business of its group entities engaged in insurance inter-mediation,
    • It has a designated website hosted for carrying out Insurance Web Aggregator business on a server based in India,
    • It should also maintain the capital and Net worth as per regulation 8 of this regulation as desired by the Authority;
    • It should ensure compliance with the requirements specified in regulation 6 of these regulations during the currency of the certificate of registration;
    • It will appoint a Principal Officer who shall be responsible for day-to-day affairs and conduct of the Insurance Web Aggregator and other qualified personnel with necessary qualifications and experience  as specified by the Authority,
  11. An Applicant registered as an Insurance Web Aggregator with the IRDAI if desirous of setting up a branch office in an IFSC,  should hold a valid certificate of registration issued by the IRDAI and obtain a ‘No-objection certificate’ from IRDAI.
  12. Any other eligibility conditions as may be specified by the Authority from time to time.
  • Consideration for Application
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Regulation 5 of the IFSCA (Insurance Web Aggregator) Regulations, 2022 prescribes the manner for consideration of an Application.

  1. An Applicant wanting to operate as an Insurance Web Aggregator shall submit an application Form as per the format prescribed in Schedule -1 along with the specified application fee.
  2. The Application Form should be accompanied by the documents prescribed in Schedule-2 in such manner and within such period as may be specified by the Authority.
  3. If the Applicant wishes to carry out Insurance Outsourcing and Insurance Telemarketing activities then it shall specifically mention the same in the application form.
  4. If the Authority deems it necessary, it may require the Applicant to furnish additional documents or information for consideration and processing of the application.
  5. An Applicant must on its own bring to the notice of the Authority any information which may have a bearing on the consideration of the application.
  • Conditions for Grant of Registration

The registration or renewal of registration shall be granted to an Insurance Web Aggregator subject to the following conditions;

  1. The business should be carried on exclusively for the purpose for which the registration has been granted and in the manner specified by the regulations.
  2. Compliance with the provisions of the Insurance Act, 1938, IFSCA Act, 2019, and any other applicable laws and instructions issued by the Authority from time to time must be ensured.
  3. Compliance with relevant Know Your Customer (KYC) and Anti-Money Laundering guidelines issued by the Authority from time to time is mandatory.
  4. It is the responsibility of the Insurance Web Aggregator to inform the Authority in writing of any material change in the information already submitted or any renewal of the previously submitted information which was found to be false or misleading.
  5. Adequate steps must be taken for redressal of grievance of policyholders within 14 days of the receipt of the complaints from policyholders.
  6. Insurance Web Aggregators should solicit and procure a reasonable number of insurance policies commensurate with their resources and the number of Authorized Verifiers engaged by them.
  7. Under no circumstances, multi-level marketing for solicitation and procuring insurance business shall be undertaken by Insurance Web Aggregators.
  8. Compliance with the Code of Conduct as specified in Schedule-16 is mandatory.
  9. Insurance Web Aggregator is required to maintain records and books of accounts in the manner specified in these regulations.
  10. Any other condition as may be imposed by the Authority from time to time.
  • Procedure for issuance of a certificate
  1. On being satisfied that the Applicant fulfils all the eligibility criteria as specified in Regulation 4, the Authority shall issue an in-principle approval to the Applicant for compliance with the requirements of minimum capital infusion, training requirements of the principal officer, professional indemnity policy, and such other requirements as considered necessary by the Authority for issuance of Certificate within 45 days from the date of such in-principle approval. If the applicant believes that it will not be able to comply with such requirements within 45 days it can make an application for an extension of time to the Chairperson of the Authority however, such application should be made at least 7 days before the expiry of the 45 days period. The Chairperson shall after examining the application, communicate its decision in writing to the applicant. Extension of time granted by the Chairperson shall not extend beyond 90 days from the date of such in-principal approval.
  2. On being satisfied that the Applicant has fulfilled all the compliance under the provisions of applicable Acts, regulations, circulars, and guidelines, the Authority may issue a Certificate of Registration in the format specified in Schedule-2 stating the category under which the registration is granted.
  3. Unless revoked or cancelled by the Authority, the Certificate of Registration granted under sub-regulation (2) shall be valid for 3 years from the date of issuance unless revoked or cancelled by the Authority. However, the certificate granted by the Authority for setting up a branch office in an IFSC for the first time shall be valid till the expiry of the certificate of registration issued by the IRDAI. Thereafter, the registration granted shall be valid for a period co-terminus with the expiry of the certificate of registration issued by the IRDAI.
  4. All deficiencies in the Application shall be communicated to the Applicant giving 30 days to rectify it so that a certificate of registration can be granted.
  5. On failure to rectify the deficiencies in the Application within the time prescribed, the Authority may refuse to grant registration and the same shall be communicated to the Applicant giving reasons in writing for such refusal. The Applicant is allowed to make written submissions to such communication refusing the grant of registration.
  6. The Insurance Web Aggregator should commence business within 6 months from the date of the grant of certificate of Registration by the Authority. If the Insurance Web Aggregator is not able to commence its business within the specified period of 6 months, it shall make an application for an extension of time to the Chairperson of the Authority at least 30 days before the expiry of such period. The Chairperson of the Authority shall examine the application and communicate its decision in writing. The extension of time cannot be granted beyond 9 months from the date of grant of the certificate of registration.
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Functions of Insurance Web Aggregators under IFSCA (Insurance Web Aggregator) Regulations

The functions of the Insurance Web Aggregator have been prescribed from Regulation 19 to 22 of IFSCA (Insurance Web Aggregator) Regulations. The functions are as follows:

  • Regulation 19- Display the product comparison on its website in such a manner as specified in Schedule-11

The manner specifies under Schedule 11 is as follows:

  1. The homepage of the website of the Insurance Web Aggregator must display a notice that the Prospect’s/visitor’s details could be shared with the insurers and that the information displayed on its website is of the insurers with whom it has an agreement.
  2. The information regarding the products should be authentic and be based solely on information received from insurers.
  3. No ratings, rankings, endorsements, or bestseller tags of insurance products should be displayed on the website. Further, the contents of the website should provide unbiased and factual information. No comments on insurers or their products should be made in their editorials or anywhere on their website.
  4. The comparison chart provided on the website should provide customer information in the following order: a) coverage, b) exclusions, c) benefits, d) terms, e) conditions, and f) price.
  5. Insurance Web Aggregators and Insurers may mutually work out products that are to be compared.
  6. Up-to-date product comparisons should be displayed and they should reflect a true picture of the products.
  7. The product price comparisons should be inclusive of all taxes and fees on a gross basis to enable the potential customers to choose a like comparison.
  8. The information displayed should be purely based on the information furnished to them by insurers.
  9. Any other document or information as the Authority may advise from time to time.
  • Regulation 20- Share leads by the Insurance Web Aggregator with the insurers in the manner specified in Schedule-12
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The manner provided under Schedule 12 is as follows:

  1. Lead Management Systems (LMS) should be used for recording the details of the visitors to the designated websites of the Insurance Web Aggregator including the Lead generated on the preference of the visitor.
  2. LMS data should be shared with only those Insurance companies who have signed agreements with the Insurance Web Aggregators.
  3. There should be transparency and accountability while using LMS.
  4. Insurance Web Aggregators must disclose that the Prospect’s/visitor’s details could be shared with the insurers.
  5. An option to select up to 3 insurers should be provided to the potential purchaser to whom the lead shall be transmitted simultaneously.
  6. Lead containing the date of a Prospect to Insurer(s) other than the one(s) preferred by the Prospect should not be transmitted. If any prospect shows interest in buying insurance but does not select any insurer then the Insurance Web Aggregator should not transmit the lead to more than 3 insurers in the same class of insurance business based on the need analysis of the prospect.
  7. The lead from the Prospects should be transmitted to the Insurers as has been mutually agreed between the insurers and Insurance Web Aggregator, by reasonably securing the information of Prospects from unauthorized access and misuse, and with a reasonable amount of suitability, reliability, and correctness and in compliance with the generally accepted IT security procedures.
  8. Every Insurance Web Aggregator should deploy an Audit Firm to audit the process of LMS systems at least once a year.
  9. The Audit Committee of the Board should examine the Audit Report of the Audit firm and shall take cognizance of the same in carrying out the corrective actions.
  10. On conversion of a lead into a policy, the insurer(s) must post back the policy details on the LMS of the Insurance Web Aggregator from whom the lead was received.
  11. Any other manner as the Authority may advise from time to time.
  • Regulation 21 under IFSCA (Insurance Web Aggregator) Regulations – The manner and process of the online sale of insurance should be as per the guidelines specified by the Authority. However, so far no guidelines have been specified by the Authority under this Regulation.
  • Regulation 22 under IFSCA (Insurance Web Aggregator) Regulations – Telemarketing/Distance marketing modes used by Insurance Web Aggregators for solicitation of Insurance, based on the leads generated from the website as per the instructions specified in Schedule-13.

Insurance products can be sold by telemarketing or other distance marketing mode however, Insurance Web Aggregator has to be registered as a telemarketer and it should comply with all the applicable provisions of the Insurance Act, 1938, IT Act, 2000, TRAI Act, 1997, The telecom Unsolicited Commercial Communications (Amendment) Regulations, 2008 and the rules, regulations, guidelines, circulars and any other laws applicable from time to time. No unfair denial of insurance coverage should be done to the Prospect seeking insurance. The Insurance Web Aggregator is duty-bound to consider the case on merits and as per the regulatory directions. The entire process of providing insurance by telemarketers has been provided in detail under Schedule 13 of IFSCA (Insurance Web Aggregator) Regulations.


The purpose of IFSCA (Insurance Web Aggregator) Regulations is to supervise and monitor web aggregators. It provides insurance-related information to customers easily and transparently. Due to the expanding digital footprint, there has been a rise in the demand for online insurance aggregators. This is expected to rise further with the rise in the use of the internet. After the formulation of the present IFSCA (Insurance Web Aggregator) Regulations, the activities of the insurance web aggregators have been brought under the watch of IFSCA.

Also Read:
Compliances for Insurance Web Aggregator in India
IFSCA (Appointed Actuary) Regulations 2022: An overview
What are the Major Differences between General Insurance Brokers and Web Aggregators?

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