The Central Insurance company of Iran (CII), the regulatory body of the industry, has agreed to revise the operative mechanism of a controversial gateway to make it compatible with startup business models.
According to Way2pay website, senior CII officials met representatives of online insurance brokers and startups as well as officials from the Vice Presidential Office for Science and Technology last week. The meeting reportedly was successful in addressing the concerns of both sides.
The website said the CII has recognized the fundamental differences in the business models of online and traditional brokers and agents and promised startups to rewrite regulations related to the gateway in a way that it supports new businesses.
However, Majid Behzadpur, the CII head stressed that the “gateway project is here to stay because it is a crucial supervisory tool” for the CII.
The move was welcomed by insurance startups.
There has been a long dispute between the insurance regulator and online insurance companies, known as online brokers, over the gateway for online insurance operations.
The CII has recognized the fundamental differences in the business models of online and traditional brokers and agents and promised startups to rewrite regulations related to the gateway in a way that it supports new businesses
Last month the CII ordered all startups to work only with a new firm, Amitis, without contacting insurance companies or brokers. Startups protested saying that that was in breach of acceptable competition norms.
Startups 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”.
They say 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 intention was and is to set up a hub and gateway for linking applications to insurance company web services," it argued.
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 collects policyholders' records, their vehicle history and IDs of car owners (for the auto insurance sector).
Traditional players in the insurance market backed the CII, saying that online brokers are disruptive and had created financial problems for insurers. Brokers claim that some websites selling insurance policies deposit their premium money in (their own) bank accounts instead of paying it to the insurance companies and usually settle the payments after one year and that too in installments.
