The Indian insurance regulator, on 13th May, in a gazette notification, proposed new rules for websites that allow individuals to compare a range of general and life insurance policies, and then purchase a suitable policy. These new rules are not to cause any disruption but to reduce vagueness only.
Despite everything, the news rules bring the following three significant changes:
1. As per the first rule, insurance web aggregators are now allowed to sell on their respective portals. ULIPs (Unit-linked Insurance Plans), earlier, were not allowed to be sold by the aggregators.
2. As per the second rule, the newly proposed ticket size is 1.5 Lakh, which was 50K earlier, which gives a boost to various life insurance policies.
3. The third rule allows remunerations on zero-commission policies too, e.g. term plans (through rewards).
Let’s understand the role of an insurance web aggregator here:
Who are Insurance Aggregators?
Insurance aggregators provide a platform to compare various insurance policies in the same category, typically aiming at buying one that suits the needs of an individual. The platform aims at enhancing the user experience by either letting individuals compare policies right there or redirect them to the website of that particular insurer.
Although the primary aim of these websites is to let the customers make their choices based on a thorough comparison, the comparison criterion includes basic common factors, such as insurance premium and sum assured. Policy Bazaar is one such platform that facilitates customers choose from a wide range of policies in each category of insurance, viz. Health Insurance, Motor Insurance, Home Insurance, Life Insurance, and other Investment Plans.
What altered Remunerations say?
The IRDA of India has brought in new changes for insurance aggregators keeping in view the remunerations issue. These companies are now eligible for renewal commissions too, in case of a non-life insurance policy, such as motor insurance, health insurance, and home insurance. The efiling income tax associated with health insurance remains the same, i.e. under section 80D of the Income Tax Act, 1961.
Life insurance policies are still not considered as per the remuneration issue, as these policies are long-term agreements.