The Central Insurance company of Iran has warned four major online insurance selling platforms to stop offering illegal discounts.
The CII notified Azki, Bimeh Bazar, iToll and Bimeh.com to remove unauthorized discount offers from their websites within three days or face legal consequences, the CII website reported.
Insurers can offer up to 2.5% discount but policies are being offered at considerably lower rates via some applications and websites. Underselling third-party auto policies, which in Iran pays for damage or injury to third parties, recently disrupted the insurance industry prompting objections by firms unable or unwilling to keep up with the unfair competition.
Reacting to the warning, iToll platform issued a statement saying that all the discounts offered are in accord with regulations.
"As per the law, insurance policies can be offered at 2.5% lower rates via online platforms and with permission from the insurance companies…iToll has agreements with insurance companies on the 2.5% discount and is offering no extra discount."
In recent years hundreds of startups and knowledge-based companies have opened in Iran with some offering insurance services. These firms account for 96% of the total online sales. They are recognized as knowledge-based firms by the government and have an estimated 5 trillion rials in investment.
The High Council of Insurance earlier ordered companies to acquire official permit from the CII for online sales. It announced a framework for regulating the activities of online insurance agents according to which an “Official Online Broker License" allows them to operate on behalf of insurance companies, offer price comparisons and make online billings.
7 Companies Penalized
However, disputes have emerged over the collaboration process between online platforms and the insurers.
Last June, the CII banned seven companies from selling third-party auto insurance because of their failure to meet CII demand for cutting ties with unauthorized applications.
The regulatory body of the industry has announced that it wants startups to handle 10% of the domestic insurance market.
Insurance companies in Iran generated 1,005 trillion rials ($3.86 billion) from 63 million policies during the 11 months to Feb. 21 – up 38.7% in premium revenue and 4% in the total number of policies sold.
CII data show that third-party auto policies accounted for the largest share of the premium with nearly one-third (34.8%) of the total income.
Premium from third-party auto insurance reached 350 trillion rials ($1.34 billion), up 46.7% on the same period last year.
