Why Insurance Self Networking Platform—ISNP—Is a Top Secret of IRDAI?

In April 2017, the regulator mooted the Insurance Self Networking Platform (ISNP) to facilitate e-commerce in the insurance business. However, four years down the line, there is not much information available about the ISNP itself, or insurance companies, brokers, and corporate agents, who are participants of ISNP, how they are regulated, if at all, and what business they are doing. There is no official information about the way they are being authorised to sell or service insurance policies through the platform. Further, nobody knows, how many insurance companies, brokers and corporate agents have applied, how many applications have been rejected and on what basis and what are duties and responsibility of those on-boarded on ISNP towards insurance consumers. Except for developing a portal, https://isnp.irda.gov.in/, the IRDAI has kept mum on everything ISNP. In fact, as per our sources, except a few in IRDAI, nobody knows anything about ISNP and what exactly is taking place under this platform. 

The portal states, "IRDAI is facilitating the promotion of e-commerce in insurance space which will lower the cost of transacting insurance business and bring higher efficiencies and greater reach. E-commerce is seen as an effective medium to increase insurance penetration and bring financial inclusion in a cost-efficient manner." 

However, there is no information available about entities registered on the ISNP portal, and what business is being carried out by them. Further, there is absolutely no information about what systems are in place, what are the activities permitted by IRDAI for these entities to carry out business under ISNP and how this is being regulated, if at all.  As per our information, as of now there are about 50 insurance broking companies, who applied and were granted approval for ISNP by IRDAI. There are many, who have applied but not received any approval from IRDAI, while some others are still waiting for the permission from the regulator to get onboard ISNP.

Since insurance policy buyers are not aware of the intermediaries who have been authorised by IRDAI to sell insurance through these ISNPs, they may become victims of unscrupulous entities who are mopping up business using the ISNP name. Plus, there could be many, who are doing some business, under cover, and are being allowed by IRDAI. This issue assumes significance in view of the increasing online cyber frauds, especially in the insurance sector. Insurance companies, their intermediaries or those pretending to be either of them may also perpetrate frauds upon unsuspecting customers. However, the insurance regulator has not shared any names associated or authorised by it with ISNP. Further, there is no consumer grievance redressal mechanism available for policyholders on the ISNP portal.

Interestingly, IRDAI’s portal for policyholders https://www.policyholder.gov.in, asks customers to be extra careful while buying the policy. “It is worth taking care of a few crucial aspects during this process. Mis-selling by insurers and their intermediaries is something you have to be cautious about. IRDAI keeps a tab on unethical practices by entities selling insurance based on unfounded promises. Your insurance company and intermediary have to act according to the code of conduct prescribed by IRDAI, the industry councils and the relevant recognized professional association,” it says.

However, this caution seems to have escaped the ISNP portal.  Earlier on 12 April 2017, IRDAI issued a circular on filing of online application for ISNP as per its guidelines on insurance e-commerce published on 9 March 2017. "Insurance companies, brokers and corporate agents can sell and service insurance policies through this platform," the circular says. According to IRDAI, the ISNP can offer several services to insurance policy holders. This includes, issuance and crediting of the policy document or certificates of insurance, proposal form and medical reports, organising medical check-up and submission of medical reports as well as issuance of endorsement. 

Under ISNP, policyholders are allowed to access e-insurance account (eIA), which contains policy documents in electronic format. IRDAI authorised four entities to open EIAs for policyholders. These include, NSDL Database Management Ltd, Central Insurance Repository Ltd, Karvy Insurance Repository Ltd and CAMS Repository Services Ltd.  Before transacting on ISNP, it is mandatory for customers to have an eIA. An insurer or insurance intermediary like brokers, corporate agents, and web aggregators, who are registered with ISNP are required to facilitate opening of eIA of the customer within 15 days of issuing the policy. 

As per Section 4 of the Right to Information (RTI) Act, the IRDAI being a public authority is mandated to publish suo moto information like the ISNP portal. However, the insurance regulator has not shared information on ISNP under RTI as well.  We requested senior officials from IRDAI, including its chairman, to share all details of ISNP, names and businesses allowed for entities registered on ISNP and what the supervisory and regulatory measures undertaken by IRDAI are, for these registered entities on ISNP. However, till writing this story, there is no response from any official from IRDAI. We will update this article as and when we receive any reply from them.