New Curbs on Insurance Agents

EghtesadOnline: The Central Insurance company of Iran, the regulatory body of the market, has warned agents against receiving insurance premium stressing that premiums must be paid directly to the insurance companies.

News ID: ۷۵۱۰۷۱

23 September 2020

"As per the regulations, agents also are barred from receiving cheques from customers if the insurance policy is sold in installments…Cheques must be payable only to insurance companies," the CII website reported Tuesday.

Rules require agents to use special payment codes for bank transactions to verify payments made by customers.

The warning comes after the CII received complaints of illegal operations by some insurance agents. Differences emerged between the regulator, agents and brokers, and insurance companies after the new regulations were announced.

Two CII rules prompted agents and startups to adopt a new technique to sustain close and mutual ties: requiring insurance startups to get an official license if they want to sell insurance, and obliging insurance companies to digitize third-party auto insurance.

Back in May, the CII told insurance firms to transfer the process of sale, renewal, and claims of personal auto policies to an online platform. Insurance companies are required to provide agents and representatives access to online platforms to support their business.

Insurance companies are required to switch the entire process of sale, renewal, and claims of personal auto policies to an online platform.  The regulatory body, has plans to require insurers to convert all insurance procedures into digital format by next March when the Iranian calendar year ends.

Safeguarding Business

By accessing insurance companies' sale platforms, online startups can sell insurance without the need for official business license. By doing so agents find new income streams when business is slow.

The regulator apparently is also facing challenges in trying to satisfy all the market players.

Defining rules regarding the performance of insurance startups is aimed at addressing Iranian Insurers Syndicate's concerns regarding the (perceived) negative impact of online sales, especially regarding the impact on traditional sales networks.

Digitalization of third party vehicle insurance seeks to help support customers. It was a right move to improve the efficiency of insurance firms and push them towards innovation and advanced technology.

Iranian insurers generated 210 trillion rials ($913 million) from insurance policies in four months to July 22. Almost 105 trillion rials ($456m) was paid in claims. Personal vehicle insurance (known as third-party insurance) accounted for 39% of the total premium.