Insurance Authority Warns Against Illegal Online Sales

EghtesadOnline: Insurance companies and agents selling insurance policies via Internet are responsible for problems caused by any illegal activity in the sale process, the president of the Central Insurance of Iran company announced.

News ID: ۷۷۷۹۷۳

29 July 2017

“As per the law, only authorized brokers and agents are permitted to sell policies … but insurers need to prepare the infrastructure for selling insurance policies through innovative methods, considering  recent technological developments,” the CII website also quoted Abdolnasser Hemmati as saying on Sunday.

The statement comes after the recent growth in startups selling insurance policies online, which has raised concerns about any fraudulent activities.

CII has developed a draft version of regulations regarding marketing and selling insurance policies both online and via mobile applications. By setting the regulations, CII aims to help reduce insurers’ expenses and provide buyers with easy access to insurance services, according to Financial Tribune.

Nonetheless, Insurance firms have different approaches to digital sales and marketing.

Rasoul Tajdar, CEO of privatized Alborz Insurance Company, expressed concerns regarding online sales, as “it will result in a reduction for brokers”.

“Online sales of insurance policies might be organized in a way that no broker is affected,” he said in an interview with IBENA.

He stressed that promoting online sales requires public awareness.

Day Insurance Company, however, has shown interest in cooperating with insurance startups, though Majid Bakhtiari, Day’s CEO, also believes that a strong infrastructure is required to let information technology play a major role in the market.

Iran Insurance Company, the only fully state-owned firm, has not made any statement directly pertaining to the issue.

However, it has recently unveiled a range of electronic platforms to enhance operations, including a platform for collecting auto insurance data, electronic risk evaluation system, a core insurance platform, a new mobile application and a payment service for policyholders.

IIC’s electronic medical system known as Seda, launched earlier this year, has more than 10,400 users at present, the company’s website said.

The Economy Ministry has tasked Iran Insurance Company with promoting the use of new technologies in Iran’s insurance market.

Smart PAP Cards

Hemmati also announced a new plan to substitute the old third-party insurance policy, which is currently published on paper, with a smart card.

However, smart insurance policies still should be purchased from authorized agents and brokers, and “the procedure has nothing to do with selling them through the Internet”, Risknews quoted Hemmati as saying.

The CII’s new plan has not been implemented yet. However, a couple of startups have unveiled smart personal auto policy cards, including “Bimito”.