As part of the IRDA’s developmental mandate, the Authority is facilitating the promotion of e-commerce in insurance space which will lower the cost of transacting insurance business and bring higher efficiencies and greater reach. e-commerce is seen as an effective medium to increase insurance penetration and bring financial inclusion in a cost-efficient manner. As a result the Authority proposes to issue draft regulations on insurance e-commerce. The salient features of the draft regulations are as under:
1. Introduction of an Insurance Self-Network Platform which is a technology platform is proposed.
2. The draft regulations define participants who can set up the Insurance Self-Network Platform and these include entities granted certificate of registration by IRDA such as insurers, insurance intermediaries, insurance agents and any other entity recognized by the Authority.
3. The Platform used by an insurance agent would be treated as that of an Insurer and the insurer shall be responsible for complying with the requirements spelt out in the regulations.
4. The Insurance Self-Network Platform will undertake Insurance e-commerce activities in India such as selling and servicing of insurance products.
5. The draft regulations lay down the procedure for grant of permission for establishing an Insurance Self-Network Platform. This includes filing of application, furnishing of information & clarifications, grant of permission and conditions thereof.
6. The permission granted shall be co-terminus with the expiry of the certificate of registration at the first instance. The procedure for renewal of permission is also specified.
7. The draft regulations also stipulate Internal monitoring, review and evaluation of systems & controls.
8. A review of the controls, systems, procedures and safeguards put in place by the insurance Self-Network platform, shall be carried out, atleast once a year, by an external certified information system auditor (CISA) at their cost.
9. The scope of such external audit shall be as prescribed by the Authority from time to time.
10.In addition the participant shall ensure compliance to information security management system standard of the International Organization for Standardization or the International Electro-technical Commission or its equivalent at all times by having an annual review of the systems.
11.The participant shall place the report of the CISA auditor and the information security management system before the Board or its sub-committee for their observations.
12.The draft regulations propose a code of conduct for the Insurance Self-Network Platform and its obligations.
13.The second part of the regulations deals with operational issues.
14.It proposes that the Insurance Self-Network Platform to be available as regular internet web-site (desktop and mobile) or as a mobile app or both
15.It also expressly states that the Insurance Self-Network Platform shall enlist only those participants that are granted certificate of registration by the Authority.
16.If any unregistered participant is enlisted by the Insurance Self-Network Platform, then it will be seen as a very serious violation which shall lead to cancellation of permission of that Insurance Self-Network Platform.
17.The draft regulations also cover the items to be displayed prominently on the internet web-site and the mobile app.
18.The draft regulations also stipulate the features of the products that are disclosed on the web-site and the mobile app or both.
19.In addition disclosures and pre-sales solicitation process are also stipulated in the draft regulations.
20.The proposed regulations proposes that all products which are approved under the Product Approval Regulations/ Guidelines and permitted by the respective regulations can be offered through the Insurance Self-Network Platform.
21.All such products shall be pre-fixed with the letter “i-” to distinguish them from regular products.
22.No refilling of products shall be necessary and the products shall be sold in accordance with IRDAI (Issuance of e-insurance policies) Regulations, 2016.
23.The pricing of the product shall be decided by the insurer.
24.The insurer may offer differential pricing when sold through the Insurance Self-Network Platform.
25.The product sold through the Insurance Self Network Platform shall be entitled to commission or remuneration or reward as specified under the IRDAI (Payment of commission, remuneration or reward to insurance agents and insurance intermediaries) Regulations, 2016
26.A proposal form for insurance business transacted on the Insurance Self- Network Platform shall not carry wet/ physical signature and instead an electronic signature or digital signature or single factor authentication such as One Time Password, PAN Card & Date of birth authentication shall suffice.
27.The proposal form similar to that approved under the Product Approval Regulations/ Guidelines may be used for underwriting of risk.
28.Electronic ACR by online authentication through login id and password shall be recognised for an Agent / insurance intermediary for the purposes of selling an insurance policy.
29.Compliance to the KYC/ AML guidelines issued by the Authority can be undertaken using e-KYC facility offered by UIDAI or e-PAN facility offered by NSDL or any other facility recognized by the Authority.
30.Creation of an e-insurance account in accordance with the IRDA Guideline No. IRDA/ INT/ GDL/ INSRE/ 111/ 05/ 2015 dated 29th May, 2015 shall be mandatory before selling insurance policies on the Insurance Self-Network Platform.
31.The manner of payment of premiums for online sale shall be by way of credit card/ debit card/ net banking or any other electronic mode as permitted by the Reserve Bank of India from time to time through a payment gateway normally used by the insurer for online sale of insurance policies.
32.On completion of online transaction, the Policy document shall also be credited to his e-Insurance Account in accordance with IRDA Guideline No. IRDA/ INT/ GDL/ INSRE/ 111/ 05/ 2015 dated 29th May, 2015.
33.Every Insurance Self-Network Platform shall provide details of process to be followed for each type of service, turnaround times for each type of service and service charge for each type of the service.
34.The proposed regulations have also stipulated the processes and timelines for various services in the life and general insurance space.
35.As regards privacy of personal information, onus is being placed o the Insurance Self-Network Platform to keep the personal information collected during the course of the business transaction confidential and prevent its misuse.
36.Since advertisement on web-site and mobile are largely pictorial, advertisement on the web-site may contain upto 80% image.
37.The Insurance Self-Network Platform may also provide for Display of online customer reviews, seller ratings.
38.The insurers may merge all disclaimers required under the advertisements under one single link “disclaimer” and the customers can access all disclaimers together through this single link.
39.An Insurance Self-Network Platform shall have in place a mechanism to address policyholders’ grievances.
40.The Insurance Self-Network Platform shall have a pro-active fraud detection policy which is approved by the Board of Directors. The policy shall among other things shall have at the minimum Manner of detecting and identifying frauds, Follow-up mechanism for prosecuting persons who committed fraud, Cooperation amongst participants to identify frauds, Building a database of those committing frauds and sharing with other participants and any other thing which the Authority may specify.
41.Every participant shall maintain records in accordance with the IRDA Guideline No. IRDA/ INT/ GDL/ INSRE/ 111/ 05/ 2015 dated 29th May, 2015.
42.Every participant shall follow a standard operating procedure for its IT and non-IT processes for each of the activity undertaken by it and shall file an updated version incorporating the changes as and when they are undertaken.
43.The Insurance Network Platform shall immediately report to the Authority any regulatory or supervisory action taken by any Government or Regulatory Authorities with full details and the penalty, any administrative action, if any imposed and the remedial steps taken by it to prevent its recurrence.
You are requested to offer their comments/ suggestions on the proposed regulations for consideration of the same by the department. The comments/ suggestions in MS-WORD format should reach us by 20th June, 2016 in the format attached to the undersigned by e-mail at randip [at] irda [dot] gov [dot] in and to Mr. Sanjay Verma, Deputy Director by e-mail at sanjay [at] irda [dot] gov [dot] in
(Randip Singh Jagpal)
Sr. Joint Director