Insurance is subject to the principle of utmost good faith, which makes it convenient for the people to conduct the business online, as both the parties have absolute duties to disclose all the material facts, otherwise any contract concluded is void. Online insurance policies have almost same rules and regulations as that of any other type of insurance policy.
Online information about the product will be more reliable as the insurance regulatory and development authority (IDRA) will soon be regulating the information providers. The online insurance information- providers, are termed as web- aggregators, you will have to obtain permission from the IDRA as per the draft guidelines.
The use of internet is growing rapidly in India. Buyers of insurance products increasingly access/ visit website to know the feature and to compare prices of the products offered by different insurers. This has led to the emergence of dedicated websites known as- web aggregators, offering information on insurance products. The concept of web aggregator is of online enquiry or shopping where a client could get information and premium quotes on all types of policies across insurance companies at one point.
To regulate the activities of these insurance companies and prevent them from being speculative and force them to act on sound actuarial principles, the life insurance company’s act was passed in 1912. But this act discriminates between Indian insurance companies and foreign companies.
A subject listed in the concurrent list in the seventh schedule to the constitution of India where both centre and state can legislate. Insurance sector has gone through a number of phases by allowing privet insurance companies to solicit insurance and also allowing foreign direct investment of up to 26%, the insurance sector has been a booming market.
However, the largest life insurance company in India is still owned by the government. Insurance is included in the union list, wherein, the subjects included in this list are, of the legislative competence of the centre. The central legislature is empowered to regulate the insurance industry in India and hence the law in this regard is uniform throughout the territories of India.
The development and growth of the insurance industry in India has gone through three dist inch stages. The insurance regulator, IDRA, has mentioned that it will commission a study to analyse the cost of the regulations that it has enforced the insurers and thus the impact on the cost of insurance policies. Over the last few years, there has been a spate of regulations by IRDA and this study will provide quantitative evidence to the impact of the regulations and if the regulator has over- regulated.
The government understands which area of regulation concerns business most but does not know what the total impact of regulations on business. Since year 2004, there has been an incredible 387 separate updates to regulations that have a business impact. A further 265 new pieces of regulations could be implemented in the coming year.