Recently, the Insurance Regulatory Development Authority of India (IRDAI) has come out with their draft regulation to allow selling insurance via e-commerce portals. The move has been made in this direction to increase insurance penetration and growing financial inclusion.
This would majorly benefit customers seeking affordable insurance since sellers would incur less costs, leading to reduction in prices of products. The IRDAI has recommended self-network platforms for online sales that can be set up by insurers, brokers or entities which are legally recognized by IRDAI. This can be done either on a regular website (desktop and mobile), mobile application or both. It is entirely dependent on the seller who is responsible for servicing the product.
IRDAI has reportedly taken this move with the objective to lower cost of transaction in the business of insurance as well as to boost efficiency and reach. However, it has been noted that the insurance governance body will take into consideration feedback received by the players and then evaluate the pros and cons before implementing the regulation.
Also, as per a circular issued by IRDAI, for a particular premium amount, insurers have to issue electronic policies along with their physical copies. Apparently, the norm by IRDAI would come into effect from 1st October, 2016.