Consumers are set to benefit as Irda’s draft guidelines for insurance

ONLINE AGGREGATORS

Irda's directive, your gain

Consumers are set to benefit as Irda's draft guidelines for insurance websites assure more accurate information and restrict the use of clients' personal details.

PREETI KULKARNI 

    If you've been planning to buy life insurance but can't zero in on the product with the least premium, your best bet would be the Internet. A few clicks of the mouse across aggregator websites and you can have all the information you need, ranging from the policies' features to their cost. Such websites broaden the choice for the buyer by allowing him to compare products from different insurers. The customer is bound to get the best deal, right? Well, not always. 
    "Many portals are not making the effort to update the policy details, resulting in outdated information being passed on to the users," says Rahul Aggarwal, CEO, click2insure.in. For consumers, it means that what they see isn't necessarily what they will get. They may be latching on to the wrong product. 
    This, besides several other problems related to aggregator sites, has led the Insurance Regulatory and Development Authority (Irda) to come out with draft norms for these outfits. Another major issue is that some of the aggregators pass on clients' or even visitors' contact details and other vital information to brokers and service providers for a fee. In fact, most web aggregators merely act as lead generators, who pass on this information. For instance, if the visitor has expressed his or her preference for some product after comparison, they pass the information on to the insurance company. If the aggregator site sells your personal details to a third party, your name could land in a database. This could mean that you are flooded with a lot of spam: calls, SMSes and e-mails. 
    "Many aggregators simply sell the information to insurers, who then contact the customers to make their sales pitch," says Aggarwal. Concurs Mahavir Chopra, head, ebusiness, medimanage.com, a health insurance aggregator: "Today, some websites sell leads to anyone who wants to buy them. The regulations regarding privacy of the customer are not very clear. How the contact information of the customer is used is also not clear," he adds. 
    To begin with, all aggregator sites will have to register with Irda. This will mean closer scrutiny by the regulator and it will also help protect the rights of the consumer. Secondly, all sites will have to provide the latest information on features and premium rates. "The price comparisons shall have to be up to date and reflect a true picture of the products," states the Irda circular proposing the draft guidelines. The insurers will also have to provide information on all policies from all insurers in a particular segment. So, an aggregator will not be able to push only those policies that earn it a fatter commission. The Irda has also placed a ceiling on the commission itself. It cannot be more than 25% of the total commission paid on the policy in the first year. Also, it will be payable only on actual sales, not for providing leads. There is also a restriction on the number of brokers and insurers with whom the aggregator can share information on potential customers. After all, it's important that the aggregator transmit your personal details to other agencies in a responsible manner. "If the guidelines are implemented, the fee will 
    be linked to actual sales and, thus, they will pass on this information to fewer insurers," says Aggarwal. 
    "The norms could help filter out aggregators who lack credibility. At the same time, it could regulate the quality of information being provided to the customers who are trying to analyse options, as well as the data that is being passed to lead buyers," says Chopra. 
    Once these norms are implemented, you could buy insurance products with the satisfaction that comes from dealing with regulated entities. "For a customer, it is a win-win situation. It's a free service; you can compare price and features; it's non-intrusive, and the decision need not be taken under pressure from an agent trying to coax you into buying," says Deepak Yohannan, CEO, myinsuranceclub.com. Adds Karanvir Singh, director, sales and distribution, Max Bupa: "Buying health insurance, especially for the first time, calls for research on the available products and their suitability." To that end, web aggregators play an important role of providing objective information. Now, under Irda's supervision, they will become better.