IRDAI has imposed a fine of Rs.1.11 crore on Policybazaar.com for violating various regulatory norms such as extending special offers to prospective customers, running advertisement on its website and sharing personal information of customers with companies other than insurers.
IRDAI found that the web aggregator had floated an offer titled ‘Navratra Offer’ in which it extended monetary incentives, complementary wellness benefits, OPD consultations and so on to its prospective customers.
Further, the insurance regulator also found that the company had displayed advertisement of various products on its website. Web aggregator norms do not allow companies to advertise on their website. Further, the company had not maintained any record of advertisements it published on its website.
IRDAI also found that the web aggregator had shared the personal information of customers with a company other than insurer.
Web aggregators compile and provide information on insurance policies of various companies on a website. IRDAI norms say that web aggregators have to provide unbiased information of insurance products like whole life insurance, term plan, health insurance, endowment, annuity on their portals.
These online distributors can charge an annual fee of Rs,50,000 per product for displaying its feature on their websites. They also charge for services at fixed rates for any other outsourcing work like collection of premiums from customers, telemarketing and advertisement. Apart from this, web aggregators can also charge commission in line with other insurance intermediaries such as agents and brokers.