Compliances for Web Aggregators in India

  • November 14, 2023
  • Registrationwala
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The compliances set by the IRDAI must be followed by all the Web Aggregators across India. The primary regulatory authority that creates regulations for Web Insurance Aggregators is the Insurance Regulatory Authority of India (IRDAI). In 2017, the authority published the rules for Insurance Web Aggregators that must be followed. So, all the Web Aggregators are governed under these regulations and also by the Insurance Act 1938 and IRDA Act, 1999. In this Article, we shared all the compliances set by IRDAI for Insurance Web Aggregators.

Code of Conduct for Web Aggregators

  • Conduct in matters relating to client relationships— every Web aggregator must:
    • Deal with the prospects with good faith and integrity.
    • Act with care and diligence.
    • Secure the confidential information shared by prospects to them and the businesses with whom they are sharing the information.
    • Avoid conflict of interest.
    • Understand the prospect and the extent of the Prospect’s awareness of risk and insurance.
    • Take security measures in confidential documents of the prospect.
  • Conduct about complaints handling — every Web Aggregator must: 
    • Have a system for recording and monitoring complaints. 
    • Websites contain details of complaints handling procedures and provide a facility for the complainant to log complaints online. 
    • Communication of customers will be acknowledged within five working days from the date of receipt of such complaint. 
    • A grievance of the customer must be resolved to the fullest satisfaction of the customer. 
    • Response letters will sent to the complainant on the resolution of the grievance, and the complainant must be informed of the further redressal procedure available to him.
    • Complaints must deal with the suitable senior level. 

Other Matters of Code of Conduct

  • Conduct in matters relating to advertising – The Web Aggregator must designate a website that contains no advertisements or any information that is prohibited under regulation. 
  • Conduct in matters relating to the receipt of remuneration – A Web Aggregator, if requested by an insured, discloses the amount of remuneration or other remuneration it receives as a result of effecting insurance for that client.
  • Conduct about matters relating to training – The Web Insurance Aggregator in India must:
    • Check that its staff is aware of and adheres to the standards expected of them by this code.
    • Check that staff is competent, suitable and have adequate training.
    • Ensure that there is a system in place to monitor the quality of advice given by its staff.
    • Ensure that members of staff are aware of legal requirements including the law of agency affecting their activities, and only handle classes of business in which they are competent.
    • Draw the attention of the client to Section 41 of the Act, which prohibits rebating and sharing of commission. 
    • A Web Aggregator must furnish the quarterly returns in such format to the Authority within 15 days from the end of the quarter or within such time as allowed and specified by the authority from time to time.

Capital Requirements of Web Aggregators

  • The capital of the web aggregator must be issued and subscribed to in the form of Equity Shares where the Web Aggregator is a company that is registered under the Companies Act, 1956.
  • The web aggregators should not have a net worth of Rupees ten lakhs at all times.
  • Must submit a net worth certificate duly certified by a Chartered Accountant every year after the finalisation of books of accounts.
  • The aggregate holdings of equity shares or contributions of the web aggregator by a foreign company, either by itself or through its subsidiary companies or its nominees, do not exceed 26% paid-up equity capital of the Web Aggregator at any time. The calculation of foreign direct investment should not be done in the same manner as specified in the Insurance Regulatory and Development Authority Regulations, 2000 for an insurer, as amended from time to time.

Transmission of Leads to the Insurer

  • Web Aggregator must use a Lead Management System (LMS) capable of recording the full details of the visitors to the designated website of the Web Aggregator and the Leads generated including the preference of the visitor. 
  • LMS data should be shared with the Insurance companies that have signed agreements with the Web Aggregators. 
  • LMS should ensure Transparency and Accountability. 
  • Web aggregators must disclose prominently on the home page that the Prospect’s / visitor’s particulars could be shared with insurers. 
  • Web Aggregator should provide an option to select up to three insurers by the visitor, to whom the lead can be transmitted simultaneously. 
  • Web Aggregators must not transmit the data of a Prospect to Insurer(s) other than the one(s) preferred by the Prospect.
    • Provided that, if the Prospect evinces interest in buying insurance but does not prefer any Insurer, web aggregator must not transmit the lead to more than three Insurers in same class of insurance business.
  • Web aggregators must transmit the data of Prospects to the Insurer
    • Not later than three days after the visit to the website.
    • Reasonably securing the information of Prospects from unauthorized access and misuse.
    • With a reasonable level of suitability, reliability and correctness, and
    • In compliance with generally accepted I.T. security procedures.
  • Web Aggregators should deploy an Audit Firm to audit the process of LMS systems at least once in 12 months.
  • Insurers, on the conversion of lead into a policy, must post back the policy details on the LMS of the Web Aggregator from whom the lead was received.
  • The time limit for tracking the leads received on LMS of Web Aggregator by insurer for passing on the credit of the sale, is to be mutually decided by the insurer and web aggregator which must be specified in agreement entered into.

Disclosures to the Authority

  • The web aggregator must disclose to the Authority, as and when required by it, in any event not later than 30 days of a requisition, the following information, namely – 
    • any change in the information or particulars previously furnished, which have a bearing on the license granted to it.
    • the names of the clients whose insurance portfolio he/she manages or has managed.
    • Any other Information/requirement specified by the Authority from time to time.
  • The web aggregator must disclose to the Authority on his own any material change in the composition of the Web Aggregator within 30 days of such change. 
  • A Web Aggregator must take the prior approval for the following from the authority: 
    • Change of Principal Officer
    • Change in Directors or Designated Partners
    • Change in name of the company
    • Change of address of registered office / Corporate Office
    • Engaging the services of service providers or third-party vendors for the core activities of the Web Aggregator such as but not limited to:
      • Lead Management System 
      • Webhosting 
      • Other core activities 
    • Change of location of the Servers hosting the comparison website.
  • A Web Aggregator must furnish to the Authority the following information. 
    • Opening/closing of branch offices
    • list of qualified persons to solicit insurance business through Telemarketing/Distance marketing modes
    • in respect of a claim under the professional indemnity policy
    • acquiring of any property
    • Any other information as called for by the authority from time to time 


To conclude, the insurance web aggregators tie up with different insurance companies and display the information of policies on their websites. As per the IRDAI, the information must be up-to-date which helps the prospects to make the right decision. Similarly, different compliances have been shared by the Insurance Regulatory Authority of India (IRDAI) on their official website. All the web aggregators have to follow these guidelines and if any aggregator fails to do so, then the punishment is also mentioned on the website. If you are looking to become an Insurance Web Aggregator, then reach out to Registrationwala.

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