Iranian Insurance Brokers' Association has voiced support for the Central Insurance company of Iran's controversial decision to launch a central gateway for managing online broker operations.
In a statement the association claimed that a number of online brokers had urged the CII to stop the gateway project because it would undermine their business.
"Some websites selling insurance deposit their premium in their bank accounts instead of paying them to insurance companies…They usually settle the premiums after one year and in installments," Risknews reported.
"Such practice was deemed disruptive and created financial problems for insurance companies, as they mostly rely on premium income to pay indemnities," read the statement.
The CII has ordered all startups to work only with Amitis, without contacting insurance companies or brokers. Startups have protested saying that this is in breach of acceptable competition norms
Startups recently accused the CII of trying to create a market monopoly over all transactions made by online insurance firms and setting up the quasi-private company Amitis.
They are of the opinion that the gateways have failed to consider the basics of designing digital products and are highly insecure.
The CII, however, denies the claims. "This company [Amitis] is not for monopolizing the market. The aim is to set up a hub and gateway for linking applications to insurance company web services."
Earlier it said that based on law the gateways are developed and run by the regulator. "The gateways are responsible for receiving APIs for policy rates, sell policies and pay from applications to insurance companies. It also gathers policyholders' records, their vehicle history and IDs of car owners.
An API gateway is a management tool that sits between a client and a collection of backend services. An API gateway acts as a reverse proxy to accept all application programming interface (API) calls, aggregate services required to fulfill them and return the appropriate result.
Brokers, however, say regulatory bodies are in charge of developing supervisory tools in any industry, "They are trying to bypass insurance regulations by abusing supportive plans for knowledge-based companies."
Brokers' Association called on the Vice President for Science and Technology Sorena Sattari and Economy Minister Ehsan Khandouzi to stop the unquestionable support for knowledge-based firms as it would prepare the grounds for illegal activities.
The association also stressed that insurance companies would face hurdles if policymakers fail to prevent online brokers’ illegal operations.
Hundreds of startups and knowledge-based companies have opened in Iran and some offer insurance services. They account for almost 96% of the total online sales and are recognized as knowledge enterprises by the government with an estimated 5-trillion-rial investment.
As per insurance regulations, startups are required to get an online broker license from the CII. Currently there are 60 licensed online brokers and the CII has reportedly received some 100 applications for new licenses.
