The head of Sanhab Company, the body in charge of managing the online database of insurance industry, says startups are not obliged to connect to the regulatory body’s central API gateway.
"According to the agreement we had with the National Virtual Space Center, the gateway operation has become optional. We welcomed the measure as it helps the gateway gradually enhance its service…it also paves the ground for more efficient usage in future,” Risknews.ir quoted Meysam Asgari as saying.
The official added that efforts are being made to develop the gateway in a way that it meets startup demands by offering a wide range of features.
"The insurance landscape differs from banking. In insurance we have traditional agents who have long interacted with people at the community level to attract customers. Therefore, the introduction of technology for insurance sales agents, who are the more traditional segment of the insurance industry is vital."
Sales networks of insurance companies have valid concerns about the performance of online platforms and claim that their activities are illegal. On the other hand, online insurance businesses have usually complained that insurance regulations offer better and more diverse conditions for traditional operations.
Asgari recalled that the Central Insurance company of Iran has said it wants to increase competition as much as possible in the insurance business space.
The CII mandated online brokers to access their insurance service through the insurance switch using their insurance APIs. Implementation of this project was assigned to Rahbord Negar Amitis Company, in which the CII holds a majority stake, granting it full authority to provide the services.
An API gateway is a management tool that sits between a client and a collection of backend services. It functions as a reverse proxy to accept all application programming interface (API) calls, aggregate services required to fulfill them and return the appropriate result.
Claims of Monopoly
However, insurance companies have protested to the extent that three major online insurance brokerage companies, with a substantial share in online insurance, filed complaints with the National Competition Council in July last year. The three claim that the provision of exclusive API services “is a clear case of monopolization”.
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 key auto insurance segment).
Traditional players in the insurance market backed the CII, say online brokers are disruptive and create 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.
The Competition Council last month dismissed complaints by online insurers and ruled in favor of the CII in introducing Amitis as the only gateway connecting insurance companies with online brokers and other service-providing startups.
According to the council’s ruling, the obligation of insurance companies to use the insurance switch for online sales, used by online brokers to access insurance sales services, is in line with the CII supervisory mandate.
This means that the insurance switch handles the sale of insurance policies and collection of premium by insurance companies or their representatives, while online marketing and sales for insurance companies or their agents are carried out by online brokers.
The CII, as the supervisory authority is responsible for regulations and oversight, and therefore its move to establish the switch communication has no inherent connection with insurance operations and sales.
