Regulatory compliance for Insurance Web Aggregators in India

Regulatory compliance for Insurance Web Aggregators in India. Recent years have seen a quick digital transformation in the Indian insurance industry. The emergence of Insurance Web Aggregators (IWAs), digital platforms that enable consumers to compare and comprehend insurance plans from different insurers, is one of the significant advancements. By offering a single interface for comparing premium prices, features, benefits, conditions, and exclusions across various policies, these aggregators help users make well-informed decisions. The Insurance Regulatory and Development Authority of India (IRDAI) regulates their activities through the Insurance Web Aggregators Regulations, 2017. The legal and operational framework for licensing, compliance, and supervision of IWAs in India is defined by these regulations.
The Role of Insurance Web Aggregators
Insurance Web Aggregators serve as online middlemen. They offer a neutral platform for disseminating policy information, but they do not sell insurance directly or manage underwriting. They compile information from several carriers and organize it in a way that allows users to compare and select the best option for their needs. This encourages transparency, reduces information asymmetry, and increases competition among insurers. Web aggregators have given consumers more power by transferring control over the insurance purchase procedure from agents to consumers, making the process much easier.
Regulatory Oversight by IRDAI
Under its mandate to regulate and develop the insurance industry, the IRDAI created the Insurance Web Aggregators Regulations, 2017, to govern the licensing, operations, compliance, and ethical behaviour of web aggregators. IWAs are regulated to operate fairly, impartially, transparently, and without conflicts of interest. Additionally, the rules specify financial, personnel, and technological eligibility criteria, codes of behaviour, reporting requirements, complaint resolution processes, and renewal terms.
Eligibility Criteria for Insurance Web Aggregator Registration
Legal Structure and Exclusive Business Object
To apply for a certificate of registration, the applicant must be a “person” as defined under Regulation 2(k), which includes companies registered under the Companies Act, LLPs, or any other legal entities recognized by law. The applicant’s Memorandum of Association (MoA) or equivalent constitutional document must declare that the sole objective is to engage in web aggregation of insurance products. This ensures that the entity is entirely focused on its intermediary role and not diluted by other commercial activities.
Restriction on Other Intermediary Roles
To preserve the neutrality and independence of web aggregators, the IRDAI strictly prohibits applicants from being involved in any other form of insurance intermediation. This includes roles such as insurance agents, corporate agents, TPAs, surveyors, loss assessors, micro-insurance agents, or insurance marketing firms. The entity should also not have any referral agreements with insurers. This restriction is aimed at preventing conflict of interest, where a web aggregator might promote a particular insurer for financial benefit.
Limitations on Group Entities
Generally, IRDAI permits only one certificate of registration for insurance intermediation within a group. If a group entity is already holding a license for another intermediary role, the Authority may still consider the web aggregator application on its own merit, provided there is no conflict of interest and the functions remain distinct. The definition of “group” follows the meaning assigned in the IRDAI (Investment) Regulations, 2017 and any directions issued from time to time.
Website and Digital Infrastructure
The applicant must operate a dedicated and functional website designed specifically for web aggregation purposes. This website must meet the technical, security, and content standards specified by IRDAI. The site should facilitate fair and unbiased comparison, offer a user-friendly interface, ensure data privacy, and must be free from promotional biases.
Qualification of Principal Officer
The applicant must appoint a Principal Officer who fulfills the qualifications outlined in Form C of Schedule I, which typically includes a graduate or postgraduate degree, relevant professional certifications, and training in insurance. The Principal Officer must also pass the IRDAI examination and is primarily responsible for ensuring compliance with regulatory obligations and managing day-to-day affairs.
Fit and Proper Criteria for Key Persons
IRDAI mandates that the Principal Officer, Directors, Shareholders, Partners, and other Key Management Personnel (KMPs) must meet the Fit and Proper criteria outlined in Form D of Schedule I. These criteria assess the individual’s financial integrity, reputation, competence, and regulatory history. This ensures that only trustworthy and competent individuals are involved in managing the IWA.
Qualification of Authorised Verifiers
Authorised Verifiers (employees who assist in insurance solicitation) must undergo the prescribed training and pass the qualifying examination as specified under Form T of Schedule VI. Their role is to communicate with prospective customers, explain insurance products, and ensure that only compliant, authorized staff interact with the public.
Regulatory History and Application Integrity
The applicant must not have had their previous application rejected or withdrawn in the preceding financial year. Similarly, if any foreign or Indian promoter of the applicant exited a previous insurance venture in the past two years, a waiting period is generally imposed unless waived by IRDAI in public interest. This prevents re-entry through backdoor routes by previously disqualified or non-compliant actors.
Application Process for Grant of Certificate of Registration
Application Filing
The application must be submitted in Form A along with the necessary documents specified in Form B of Schedule I. The application must be accompanied by a non-refundable fee of Rs.10,000 plus applicable taxes. Payment can be made via Demand Draft or through recognized electronic fund transfers to IRDAI’s account.
Declaration of Activities
If the applicant seeks to undertake outsourcing or telemarketing, this must be explicitly stated in the application. These activities require additional scrutiny as they involve third-party interaction with customer data and insurance-related communications.
Completeness and Clarification Process
IRDAI may reject incomplete applications. However, before doing so, the applicant is granted an opportunity to rectify the deficiencies within 30 days. If the applicant fails to comply, the application is returned, and a new application must be filed. The Authority may also request additional clarifications and may summon the Principal Officer for personal representation. 
Evaluation and Consideration of Application by IRDAI
IRDAI evaluates whether granting a certificate is in the interest of policyholders and aligns with the objectives of promoting a transparent insurance market. The following are key evaluation criteria:
Fulfilment of Eligibility Norms
The applicant must comply with all conditions under Regulation 3, including legal form, exclusive business object, personnel qualifications, and absence of regulatory conflicts.
Absence of Disqualification
IRDAI checks whether any Directors or KMPs are disqualified under Section 42D(5) of the Insurance Act, 1938, which includes convictions for offenses involving fraud or moral turpitude, insolvency, and previous professional misconduct.
Previous Regulatory Rejections
If any person connected to the applicant was previously denied a license or registration by IRDAI, it may negatively impact the current application, unless justified. 
Procedure for Grant of Certificate of Registration
Upon being satisfied that the applicant meets all conditions and the registration is in public interest, IRDAI grants the Certificate of Registration as per Form E of Schedule I.
Subject to Conditions
The registration is conditional, meaning the IWA must continuously comply with the code of conduct, operational guidelines, and reporting requirements issued by the Authority. Violations can lead to suspension, cancellation, or penalties.
Re-application Restrictions
If a registration issued under older regulations was cancelled, surrendered, or not renewed, a new application can be made only after a one-year cooling-off period, unless IRDAI permits otherwise. 
Conditions for Maintaining Certificate of Registration
Permissible Scope of Activities
The IWA is allowed to solicit only those insurance products as mentioned in Regulation 26. Any deviation—such as misrepresentation, bundling, or unauthorized sales will be treated as a regulatory violation.
Legal Compliance
The IWA must comply with all applicable laws including the Insurance Act, 1938, the IRDA Act, 1999, and all regulations, circulars, and guidelines issued by IRDAI from time to time. Non-compliance may lead to audits, penalties, or cancellation of registration.
Duty to Inform
If any of the information previously submitted is found to be false, misleading, or if there is any material change (such as change in control, management, or ownership), the IWA must inform IRDAI in writing without delay.
Grievance Redressal System
IWAs must have a functional grievance redressal mechanism and resolve policyholder complaints within 14 days of receipt. They must also report the number and nature of complaints to IRDAI in the prescribed format.
Reasonable Business Activity
Web Aggregators are expected to solicit and procure a reasonable number of policies based on their manpower and operational capabilities. This ensures that registration is not misused or retained only for name-sake.
Record Maintenance and Tagging
The IWA must maintain comprehensive records policy-wise and verifier-wise and ensure that every policy is tagged to the verifier who facilitated it. These records must be accessible to IRDAI for audit or investigation.
Compliance with Code of Conduct
All personnel, including the Principal Officer, Directors, and Authorised Verifiers, must adhere strictly to the IRDAI Code of Conduct as prescribed in Form W of Schedule VIII. This includes honesty, transparency, consumer protection, and ethical behaviour.
Authority to Investigate
IRDAI may appoint an investigating authority at any time to examine the aggregator’s books, records, website content, or solicitation practices. Failure to cooperate with such investigations may result in regulatory action.
Conclusion
Insurance Web Aggregators represent the future of insurance intermediation in India. By providing a transparent, comparative, and user-friendly interface, they make insurance products accessible and understandable to the masses. However, their critical role demands robust regulation and oversight. The IRDAI (Insurance Web Aggregators) Regulations, 2017 provide a comprehensive legal structure that ensures ethical, transparent, and professional operation of these digital intermediaries. With strict eligibility requirements, ongoing compliance obligations, and regulatory checks, these guidelines uphold the integrity of the insurance market and ensure that IWAs serve the best interests of policyholders.

Recent years have seen a quick digital transformation in the Indian insurance industry. The emergence of Insurance Web Aggregators (IWAs), digital platforms that enable consumers to compare and comprehend insurance plans from different insurers, is one of the significant advancements. By offering a single interface for comparing premium prices, features, benefits, conditions, and exclusions across various policies, these aggregators help users make well-informed decisions. The Insurance Regulatory and Development Authority of India (IRDAI) regulates their activities through the Insurance Web Aggregators Regulations, 2017. The legal and operational framework for licensing, compliance, and supervision of IWAs in India is defined by these regulations.

The Role of Insurance Web Aggregators

Insurance Web Aggregators serve as online middlemen. They offer a neutral platform for disseminating policy information, but they do not sell insurance directly or manage underwriting. They compile information from several carriers and organize it in a way that allows users to compare and select the best option for their needs. This encourages transparency, reduces information asymmetry, and increases competition among insurers. Web aggregators have given consumers more power by transferring control over the insurance purchase procedure from agents to consumers, making the process much easier.

Regulatory Oversight by IRDAI

Under its mandate to regulate and develop the insurance industry, the IRDAI created the Insurance Web Aggregators Regulations, 2017, to govern the licensing, operations, compliance, and ethical behaviour of web aggregators. IWAs are regulated to operate fairly, impartially, transparently, and without conflicts of interest. Additionally, the rules specify financial, personnel, and technological eligibility criteria, codes of behaviour, reporting requirements, complaint resolution processes, and renewal terms.

Eligibility Criteria for Insurance Web Aggregator Registration

Legal Structure and Exclusive Business Object

To apply for a certificate of registration, the applicant must be a “person” as defined under Regulation 2(k), which includes companies registered under the Companies Act, LLPs, or any other legal entities recognized by law. The applicant’s Memorandum of Association (MoA) or equivalent constitutional document must declare that the sole objective is to engage in web aggregation of insurance products. This ensures that the entity is entirely focused on its intermediary role and not diluted by other commercial activities.

Restriction on Other Intermediary Roles

To preserve the neutrality and independence of web aggregators, the IRDAI strictly prohibits applicants from being involved in any other form of insurance intermediation. This includes roles such as insurance agents, corporate agents, TPAs, surveyors, loss assessors, micro-insurance agents, or insurance marketing firms. The entity should also not have any referral agreements with insurers. This restriction is aimed at preventing conflict of interest, where a web aggregator might promote a particular insurer for financial benefit.

Limitations on Group Entities

Generally, IRDAI permits only one certificate of registration for insurance intermediation within a group. If a group entity is already holding a license for another intermediary role, the Authority may still consider the web aggregator application on its own merit, provided there is no conflict of interest and the functions remain distinct. The definition of “group” follows the meaning assigned in the IRDAI (Investment) Regulations, 2017 and any directions issued from time to time.

Website and Digital Infrastructure

The applicant must operate a dedicated and functional website designed specifically for web aggregation purposes. This website must meet the technical, security, and content standards specified by IRDAI. The site should facilitate fair and unbiased comparison, offer a user-friendly interface, ensure data privacy, and must be free from promotional biases.

Qualification of Principal Officer

The applicant must appoint a Principal Officer who fulfills the qualifications outlined in Form C of Schedule I, which typically includes a graduate or postgraduate degree, relevant professional certifications, and training in insurance. The Principal Officer must also pass the IRDAI examination and is primarily responsible for ensuring compliance with regulatory obligations and managing day-to-day affairs.

Fit and Proper Criteria for Key Persons

IRDAI mandates that the Principal Officer, Directors, Shareholders, Partners, and other Key Management Personnel (KMPs) must meet the Fit and Proper criteria outlined in Form D of Schedule I. These criteria assess the individual’s financial integrity, reputation, competence, and regulatory history. This ensures that only trustworthy and competent individuals are involved in managing the IWA.

Qualification of Authorised Verifiers

Authorised Verifiers (employees who assist in insurance solicitation) must undergo the prescribed training and pass the qualifying examination as specified under Form T of Schedule VI. Their role is to communicate with prospective customers, explain insurance products, and ensure that only compliant, authorized staff interact with the public.

Regulatory History and Application Integrity

The applicant must not have had their previous application rejected or withdrawn in the preceding financial year. Similarly, if any foreign or Indian promoter of the applicant exited a previous insurance venture in the past two years, a waiting period is generally imposed unless waived by IRDAI in public interest. This prevents re-entry through backdoor routes by previously disqualified or non-compliant actors.

Application Process for Grant of Certificate of Registration

Application Filing

The application must be submitted in Form A along with the necessary documents specified in Form B of Schedule I. The application must be accompanied by a non-refundable fee of Rs.10,000 plus applicable taxes. Payment can be made via Demand Draft or through recognized electronic fund transfers to IRDAI’s account.

Declaration of Activities

If the applicant seeks to undertake outsourcing or telemarketing, this must be explicitly stated in the application. These activities require additional scrutiny as they involve third-party interaction with customer data and insurance-related communications.

Completeness and Clarification Process

IRDAI may reject incomplete applications. However, before doing so, the applicant is granted an opportunity to rectify the deficiencies within 30 days. If the applicant fails to comply, the application is returned, and a new application must be filed. The Authority may also request additional clarifications and may summon the Principal Officer for personal representation.

Evaluation and Consideration of Application by IRDAI

IRDAI evaluates whether granting a certificate is in the interest of policyholders and aligns with the objectives of promoting a transparent insurance market. The following are key evaluation criteria:

Fulfilment of Eligibility Norms

The applicant must comply with all conditions under Regulation 3, including legal form, exclusive business object, personnel qualifications, and absence of regulatory conflicts.

Absence of Disqualification

IRDAI checks whether any Directors or KMPs are disqualified under Section 42D(5) of the Insurance Act, 1938, which includes convictions for offenses involving fraud or moral turpitude, insolvency, and previous professional misconduct.

Previous Regulatory Rejections

If any person connected to the applicant was previously denied a license or registration by IRDAI, it may negatively impact the current application, unless justified.

Procedure for Grant of Certificate of Registration

Upon being satisfied that the applicant meets all conditions and the registration is in public interest, IRDAI grants the Certificate of Registration as per Form E of Schedule I.

Subject to Conditions

The registration is conditional, meaning the IWA must continuously comply with the code of conduct, operational guidelines, and reporting requirements issued by the Authority. Violations can lead to suspension, cancellation, or penalties.

Re-application Restrictions

If a registration issued under older regulations was cancelled, surrendered, or not renewed, a new application can be made only after a one-year cooling-off period, unless IRDAI permits otherwise.

Conditions for Maintaining Certificate of Registration

Permissible Scope of Activities

The IWA is allowed to solicit only those insurance products as mentioned in Regulation 26. Any deviation—such as misrepresentation, bundling, or unauthorized sales will be treated as a regulatory violation.

Legal Compliance

The IWA must comply with all applicable laws including the Insurance Act, 1938, the IRDA Act, 1999, and all regulations, circulars, and guidelines issued by IRDAI from time to time. Non-compliance may lead to audits, penalties, or cancellation of registration.

Duty to Inform

If any of the information previously submitted is found to be false, misleading, or if there is any material change (such as change in control, management, or ownership), the IWA must inform IRDAI in writing without delay.

Grievance Redressal System

IWAs must have a functional grievance redressal mechanism and resolve policyholder complaints within 14 days of receipt. They must also report the number and nature of complaints to IRDAI in the prescribed format.

Reasonable Business Activity

Web Aggregators are expected to solicit and procure a reasonable number of policies based on their manpower and operational capabilities. This ensures that registration is not misused or retained only for name-sake.

Record Maintenance and Tagging

The IWA must maintain comprehensive records policy-wise and verifier-wise and ensure that every policy is tagged to the verifier who facilitated it. These records must be accessible to IRDAI for audit or investigation.

Compliance with Code of Conduct

All personnel, including the Principal Officer, Directors, and Authorised Verifiers, must adhere strictly to the IRDAI Code of Conduct as prescribed in Form W of Schedule VIII. This includes honesty, transparency, consumer protection, and ethical behaviour.

Authority to Investigate

IRDAI may appoint an investigating authority at any time to examine the aggregator’s books, records, website content, or solicitation practices. Failure to cooperate with such investigations may result in regulatory action.

Conclusion

Insurance Web Aggregators represent the future of insurance intermediation in India. By providing a transparent, comparative, and user-friendly interface, they make insurance products accessible and understandable to the masses. However, their critical role demands robust regulation and oversight. The IRDAI (Insurance Web Aggregators) Regulations, 2017 provide a comprehensive legal structure that ensures ethical, transparent, and professional operation of these digital intermediaries. With strict eligibility requirements, ongoing compliance obligations, and regulatory checks, these guidelines uphold the integrity of the insurance market and ensure that IWAs serve the best interests of policyholders.