Insurance Broker Regulation, 2018 For the insurance sector financial year 2017-2018 brought in...
This article is all about the ecommerce insurance ISNP –Insurance Self Regulatory Networking Platform. Insurance Self Regulatory Networking Platform means an electronic platform set-up by the applicant with the permission of the Authority. The registration and licensing of Ecommerce Insurance Agents are covered in the IRDA Insurance License.
The ISNP are set up by an insurer or insurance intermediaries like Brokers, Corporate Agents, and web aggregators.
According to IRDA definition section 3, the following terms are defined as follows:
In India, we can see developments in the Insurance Regulatory Development Authority of India. The recent developments of IRDAI are:
This development has brought introduced a new concept in the Insurance business. This new business is the Ecommerce Insurance.
What is Ecommerce Insurance Guidelines?
The IRDA issued guidelines on the Ecommerce Insurance (as Ecommerce Guidelines) on March 9, 2017. This regulated the establishment of Insurance Self Regulatory Network-ISNP by insurers and insurance intermediaries (other than insurance agents) to sell and service insurance policies.
The ecommerce is seen as an effective medium to increase the insurance business and financial inclusion effectively.
The ecommerce guidelines are set out the procedures for granting permission to establish am ISNP to undertake ecommerce insurance activities in India.
ISNP is the electronic platform for the sale or service of the insurance policies.
ISNP’s must be registered, and the legal entities must be allowed, to sell the insurance products online. The existing insurance policy companies who have established their own ISNP’S or insurance portals, for selling & servicing insurance products, they can continue, provided the current insurers, or insurance intermediaries, have registered themselves under the requirements of the Ecommerce guidelines within 3 months and have obtained the necessary approvals from IRDA.
The products of insurance must be sold in electronic form, following the principles of IRDAI.
The ecommerce guidelines have recognised the payments of premiums in the form of e-wallets. There can be no cash backs, promotional discounts or incentives, strictly prohibited by IRDA in the code of conduct.
The ISNP’s are strictly prohibited from accepting the redirected internet traffic, references other than from market participants.
Market Participants must ensure compliances of the Section 64VB (1) of the Act.
The fees, charges, payments, which are allowed under IRDAI as commission remuneration, rewards to Insurance Agents/Intermediaries, it can be paid or shared between the market participants in order to use an ISNP.
It means that the adverse findings related to the ISNP after the annual review of its controls, systems, and procedures. It must be reported to the IRDAI.
The insurers desiring to undertake ecommerce insurance activities file the form-1. The application submitted shall be decided within 60 days from the date of submission by the applicant. If notice is served, the applicant will get 15 days to complete the application.
The applicant must submit the information, clarification or personal representation regarding the matters relating to ISNP for undertaking ecommerce insurance activities in India.
The permission shall be granted only after ISNP has subjected to the conditions provided by IRDA, 1999 and Insurance Act, 1983 and guidelines and circulars issued from time to time.
The certificate of registration for an ISNP is valid until the certificate is valid for the insurance intermediaries. This means there permission is dependent on the continuance of the business of insurer intermediaries.
Till the time privacy of data is allowed.
The following minimum requirements have to be ensured by the ISNP for undertaking the ecommerce insurance activities, in India, by the applicant:
The applicant ISNP shall ensure regular website &mobile or both the person.
The applicant ISNP shall show his legal name and his other details on the website
Proper disclosure of the features shall be made by the ISNP about the insurance product.
It shall mention the details of the product and about the intended customers who can buy the product.
Complete details on the product change and renewal procedures to the customer. The benefits attached to it.
The product shall be shown as in the compliance which is approved by the Authority.
The products sold by ISNP shall get the requisite commission, fees etc.
The compliance of KYC norms
Within 15 days of issuing policies, the e-insurance account shall be made.
The payment of premium can through debit card/credit card/ net banking etc.
On completion of payment of premium or sale of the policy, the e-receipt shall be generated.
Data security is the duty of every applicant’s ISNP.
It can be concluded that that idea of providing registration to ecommerce insurance applicants ISNP in the IRDA Insurance License category, is the secured way for the Authority to keep monitoring. The IRDA will regularly monitor and checks the insurance activities enrolled as ISNP- insurance self networking platform, on the internet. As per the recent Google survey, 200 million people prefer to purchase and renew their policies online. The increased online access of the ecommerce platforms, the IRDA stated that the ecommerce insurance guidelines are part of the developmental mandate, and it promotes ecommerce in the cyberspace.
Read our article:What is an Insurance Self Network Platform (ISNP)?