The Central Insurance company of Iran's recent decision to ban companies from selling policies via unauthorized websites has created a stir.
CEOs of major but unauthorized insurance applications, namely Asan Pardakht, Bimeh Bazar, Bimito and AzKi, in a letter to the regulator (CII) recalled their concerted efforts to function in line with rules and urged it to reverse its decision, Aiin.ir, a local media outlet covering insurance industry issues, reported on Sunday.
The CII on Thursday warned insurance companies and agents against offering services to unauthorized applications and websites.
As per a notice published by Risknews, as of June 22 insurers who 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 certain categories.
The warning comes after the CII received complaints of illegal operations by some insurance company agents. Agents and online startups have been under the limelight in recent years.
"Signatories of the letter were among the first applications that applied for receiving online brokerage license from the CII. Unlike companies affiliated to insurance firms, we have not been able to obtain operating legal permits," the letter said.
The High Council of Insurance earlier ordered companies to acquire official permits from the CII for selling policies online. It 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 official license.
Key Players
In recent years hundreds of startups and knowledge-based companies have opened in Iran with some offering insurance services. Such firms account for 96% of the total online sales. They are recognized as knowledge-based firms by the government and have attracted more than 5 trillion rials in investment.
"Almost 500 experts and developers are working on major tech-based projects in our companies, which help increase the penetration ratio of insurance services," the letter went on to say.
In light of the support the regulatory body has given and its efforts to promote deregulation in recent years, the CEOs called on the CII to revoke its decision soon.
The regulator now seems to be facing real challenges in trying to please market stakeholders across the board.
Initially rules for insurance startups were set to address the concerns of the Iranian Insurers Syndicate over the negative impact of online sales, especially regarding the potential negative impact it would have on traditional sales networks.
Supporting startups and paving the way for innovative services also was a logical and inevitable decision. It also was a timely move to boost the efficiency of insurance companies and push them to embrace advanced technology.
The CII has said in unambiguous terms that it supports and will continue to support the development of insurance startups. Gholamreza Soleimani, the CII boss, said it wants startups to handle 10% of the domestic insurance market. However, traditional insurers seem to be reluctant to share the market with the newcomers.
