The government has approved new rules requiring the Central Insurance company of Iran (CII) to create policy mechanisms for effectively supporting insurance startups.
"The regulatory body of the insurance industry is obliged to prepare infrastructure to smartify supervision and payments, improve creditworthiness and risk management systems, create instruments in accord with knowledge-based insurance products and a central gateway for services sold by startups," Risknews reported.
Developing rules for establishment of innovative insurance companies, is also the new function of the CII to bu undertaken in collaboration with the Vice Presidency for Science and Technology within three months.
Moreover, the CII is tasked to revise its regulations in a way that it gives more space to innovative insurance solutions, especially by knowledge-based companies.
The new measure also requires the regulator to revise regulations related to insurance company investments, especially to help ease their investment in startups.
The Economy Ministry will submit a quarterly report over the CII's performance to the Vice Presidency for Science and Tech.
There has been a long dispute between the insurance regulator and online insurance companies, known as online brokers, mostly over the CII's recent move in creating a central gateway for online insurance operations.
The CII has ordered all startups to work only with a new firm, 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”.
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 aim 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 gathers policyholders' records, their vehicle history and IDs of car owners (for the auto insurance sector).
Call to Rewrite Rules
In a recent interview, Alireza Daliri, and assistant to the Office of the Vice President for Science and Tech, stressed that the CII needs to revise its approach towards startups sooner rather than later.
"We expect all the regulatory bodies to present an unambiguous roadmap for supporting knowledge-based firms," he said.
"We are rather surprised by the CII's hasty move on launching the insurance gateway," Daliri said, "CII officials have promised to remove the obstacles."
On the other hand, insurance companies and brokers have expressed support for the CII's move saying that online brokers are disruptive and have created financial problems for insurers.
Brokers claim that some websites selling insurance policies deposit their premium in their bank accounts instead of paying them to insurance companies and usually settle the premiums after one year and that too in installments.
The 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 paves the way for illegal activities.
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.
