IRDAI Proposes Norms for Selling Insurance Through E-Commerce

Regulator IRDAI on Tuesday proposed norms for selling and servicing of insurance policies through e-commerce platform with a view to increase insurance penetration in the country in a cost-effective manner. "The Insurance Self-Network Platform will undertake Insurance e-commerce activities in India such as selling and servicing of insurance products," IRDAI said in regulations on insurance e-commerce.

The Insurance Regulatory and Development Authority of India (IRDAI) said promotion of e-commerce in insurance space 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," it said.

The draft defines participants who can set up the Insurance Self-Network Platform. These include entities granted certificate of registration by IRDAI such as insurers, insurance intermediaries, insurance agents and any other entity recognised by the Authority. It also lays down the procedure for grant of permission for establishing an Insurance Self-Network Platform. The pricing of the product would be decided by the insurer.

The exposure draft also covers the items to be displayed prominently on the internet web-site and the mobile app. Further, it stipulate the features of the products that are disclosed on the web-site and the mobile app or both. Further, 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, it said.

As regards privacy of personal information, the draft said the "onus is being placed" on the Insurance Self-Network Platform to keep the personal information collected during the course of the business transaction confidential and prevent its misuse. The Insurance Self-Network Platform may also provide for Display of online customer reviews, seller ratings.

Also, the Insurance Self-Network Platform shall have a pro-active fraud detection policy which is approved by the Board of Directors, the draft said on which public comments have been invited till June 20.