Some Essential Dos and Don’ts of an ISNP

Ashish M. Shaji

24 Mar, 2022

Years ago the Insurance regulatory body introduced the concept of Insurance Self-Networking Platform to bring in e-commerce in the insurance business. The idea of ISNP aimed to achieve two pronged objectives first, to expand the insurance business rapidly and to lower the transacting cost relating to insurance policies. ISNP set the stage for insurance brokers, firms and corporate agents to sell and service policies through e-commerce with the permission of IRDAI^[1].

ISNP- An electronic Platform

Insurance Self Network Platform also called ISNP, is an electronic platform which has been formed to conduct insurance e-commerce activities with the permission of IRDAI. It assists insurance brokers or firms to sell insurance policies in a cost efficient manner. It also helps them to reach a wider number of people.

The insurance regulatory authority had issued guidelines in this regard and the objective behind setting out these guidelines revolved around standardizing e-commerce rules across various entities who sell insurance online. So anyone desirous of selling insurance digitally needs to set up the insurance self-network platform (ISNP). They must also abide by the rules set out in this regard. Only those entities can sell policies on this online platform who are recognised by IRDAI like insurance intermediaries. Insurance intermediaries can include distributors such as corporate agents, web aggregators and insurance marketing firms. As agents are tied to one insurer, they can use the digital platform of the insurer to sell the policies online.

Different services offered on ISNP

Various services are offered on this digital platform, such as:

• Issuance and crediting the policy document, certificate of insurance etc;
• Endorsement issuance;
• Change in T&C of the policy;
• Collecting of renewal premium and remittance to insurers;
• Name or address change;
• Assignment registration;
• Loan against policy;
• Fund switching/premium redirection;
• Surrender, withdrawal, maturity, return benefit;
• Loan against policy;
• Extension of cover;
• Conducting medical check-up and submission of the medical report;
• Revival/policy cancellation;
• Other service operations as it is for specific products.

Essential Requirements to set up ISNP

The following essential requirements should be met in order to set up ISNP:

• The applicant must prove that the digital platform is able to automate the process and ensure data privacy at all times;
• The applicant must have a web or mobile platform to sell and service insurance policies across life as well as non-life insurance companies;
• An applicant who is an insurer shall only enrol insurance intermediaries on its ISNP. Further, an applicant who is an insurance intermediary shall enrol insurers only and cannot enrol any other insurance intermediary or agent;
• If an applicant enrols unregistered insurer or insurance intermediary, then the regulatory authority shall have the power to cancel the permission given to the applicant.

Dos and Don’ts for ISNP applicant

The ISNP applicant shall follow the Dos and Don’ts at all times as specified below:

Dos–

• At the time of providing insurance proposal to the client, the applicant needs to provide its summary in an electronic format. This should be done before the terms of the contract expires;
• The applicant shall provide an e-copy of the insurance policy to the client. This ensures that the information is stored and reproduced as and when required;
• The applicant must furnish all information about its insurance business whenever asked;
• ISNPs should have proper internal mechanisms for reviewing, monitoring and evaluating its controls, systems, safeguards etc.;
• IRDA may require from ISNP administrator to furnish returns on a periodical basis;
• Put in place board approved fraud detection policies and process;
• An insurer needs to maintain record, supervision over its ISNP in accordance to the guidelines of IRDA;
• Reporting to the IRDAI if there has been any action taken by the government or regulatory authority;
• The applicants’ CEO needs to file an annual compliance certificate to submit that the guidelines laid out in respect of ISNPs has been followed.

Donts–

There are certain activities that the applicant is not permitted to undertake. Such activities have been specified below:

• Conducting activities that show that the applicant is discriminating against certain policy holders;
• Manipulating of the insurance business by the applicant in a way that is profitable for him but against the best interests of the insurance policy holders;
• Engaging in unfair trade practices whereby discrimination is evident against a particular insurance company or policy holder;
• Accepting redirected internet traffic from those websites that do not form a part of the insurance domain;
• Violating the code of conduct in any manner;
• Not adhering to the orders of IRDA;
• Offering discounts or incentives that are not approved by the regulatory authority, IRDA;
• Disbursing cashback or such other promotional benefits by payment gateway companies or other entities;
• Defaulting or contravening any requirements under the IRDA Act 1999 or any rules and regulations made thereunder.

Conclusion

Insurance companies, intermediaries, etc. setting up an Insurance Self Network Platform (ISNP) for selling and servicing insurance products must adhere to the obligations mentioned above in order to function smoothly.

Read our Article:IRDAI Guidelines to Surety Insurance Contracts: An Overview