The Central Insurance company of Iran Thursday warned insurance companies and agents against offering services through unauthorized applications and websites.
As per a notice published by Risknews, as of June 22, insurance companies that fail to meet the new regulations will be penalized as per law, which allows the regulator to bar CEOs of noncomplying companies and suspend their operation in specific categories.
The warning comes after the CII received complaints of illegal operations by some insurance agents. Agents and online startups have been under the limelight in recent years.
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.
However, by accessing insurance companies' sale portals, online startups can sell insurance without obtaining official license. By doing so, agents find new sources of income when business is slow.
In recent years hundreds of startups and knowledge-based companies have opened in Iran with some offering insurance services, namely Bime Click, Bime Bazar, Bimito, and Fast Bime.
Discounts
The CII also warned insurance companies over underselling third-party auto insurance. Insurers can offer up to 2.5% discount but policies are being sold at considerably lower prices in some of the applications and websites.
Underselling third-party auto policies, which in Iran provides coverage for damage or injury to third parties, had recently disrupted the insurance market prompting objections by firms unable or unwilling to keep up with the competition.
Iranian insurance companies generated 817.3 trillion rials ($3.4 billion) in premium income in the last fiscal year (March 2020-21) posting 37.8% growth compared to the year before.
Third-party vehicle insurance topped the list alone generating one-third of the premium income. Insurance companies sold 24.7 million third-party auto insurance policies last year worth 274 trillion rials ($1.15b) – up 33.5% and 36% growth in premium income and the total policies sold.
