Irda tightens rules for websites vending insurance products

As per Irdas draft guidelines,companies will now need to have a minimum net worth of Rs 10 lakh,and they will have to register themselves with Irda to become eligible for providing information related to the insurance sector on their websites.

Starting February 2012,web aggregators would not be allowed any sponsored content on their website. They will not be allowed to use any rating,ranking,endorsement or bestsellers of insurance products. There would be cap of Rs 1 lakh on the fee paid by the insurance companies to the web aggregators. To plug the gap of paying fee via other means such as training,infrastructure development,Irda has disallowed reimbursement of expenses by insurers.

They will get remunerations only if leads provided by them result in sale,which is capped at 25 per cent of the total commission payable on the first-year premium. The current industry average per lead is around Rs 100. From February,it would come down to Rs 10.

These guidelines will result in the end of insurance aggregation in India. Under these conditions it does not make any sense for us to function as aggregators in the market anymore,said Yashish Dahiya,CEO,Policy Bazaar.