EghtesadOnline: The Central Insurance company of Iran, the supervisory and regulatory body of insurance industry, has notified insurance companies to improve their performance and take action against agents violating online sales and marketing regulations.
"Insurance companies are required to curb violation of rules on collaborating with insurance startups…a number of agents have reportedly shared access credentials [of corresponding sales and supervision platforms] with online insurance startups," reads a letter from Mehrdad Rezaei, head of the CII office for supervision, Risknews reported.
Insurance agents and online startups are among key issues of the industry in recent years. The regulator recently announced two pieces of regulations that prompted agents and startups to adopt a new technique to sustain close and mutual ties: requiring insurance startups to obtain an official license if they want to sell insurance polies, and obliging insurance companies to digitize third-party auto insurance policies.
Back in May, the CII told insurance firms to transfer the process of sale, renewal, and claims of personal auto policies to an online platform. Insurance companies are required to provide agents and representatives access credentials to online platforms to support their business.
The High Council of Insurance earlier mandated companies to acquire official permits from the CII for selling insurance policies online. The council announced a framework for regulating the activities of online insurance agents according to which an “Official Online Broker License" allows policy sellers to function on behalf of insurance companies, offer price comparisons and make online billings.
The measure was aimed to address Iranian Insurers Syndicate's concerns over the negative impact of authorizing online sales, especially regarding the impact it would have on traditional insurance sales networks.
By accessing insurance companies' sale platforms, online startups can sell insurance without obtaining official licenses. By doing so agents find new sources of income when business is slow.
An estimated 32,245 insurance agents are active in the country. Data from the CII show that personal vehicle insurance (known as third-party insurance) account for almost 39% of the total premium.
The regulator of the insurance industry too seems to be facing challenges in trying to satisfy all the market players.
Defining rules regarding the work of insurance startups was aimed at addressing Iranian Insurers Syndicate's concerns over the negative impact of online sales, especially regarding the negative impact it would have on traditional sales networks.
Digitalization of third party vehicle insurance was aimed to support customers. It was a right move towards boosting the efficiency of insurance companies and pushing them towards embracing advanced technology.
The CII has stated in unambiguous terms that it supports development of insurance startups. Gholamreza Soleimani, the CII boss, said that the regulator wants startups to handle 10% of Iran’s insurance market.
The regulator has not prohibited insurers from working with startups. In fact agents are allowed to sign deals with startups, but the deal needs to be fully in accord with CII requirements about prices, upholding buyers' rights and protecting policyholders' personal and confidential data.