Why is it imperative to timely file IRDA's ISNP Compliance?

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Why is it imperative to timely file IRDA's ISNP Compliance?

In this article, we will discuss about the Insurance Self-Network Platorm's requisite guidelines for registration with the IRDAI as well as the ISNP Compliance that must be timely filed along post the registration process. Let us look at them one by one.

ISNP Guidelines IRDAI

If you want to establish an Insurance Self-Network Platform, you must satisfy the following ISNP Guidelines before filing for the IRDAI's ISNP registration application:

Business Requirement

The ISNP applicant must be any one of the following:

• Incorporated Company
• Limited Liability Partnership

The applicant must appoint a principal officer to oversee its Platform business. They must also conform to all the guidelines as per the ISNP-1.

Platform Operation and Maintenance

The ISNP applicant must prove that the portal can automate the process as well as maintain data privacy. He must not commence any insurance-related activity without registering the platform after obtaining permission from the IRDAI.

License Processing Fee

The ISNP applicant must pay the license processing fee of Rs. 10,000 plus applicable taxes. The licensing fee is non-refundable.

Compliance Period

Registered ISNPs with their insurance portals for selling servicing insurance products must continue to operate them. In addition, they must comply with the IRDAI's guidelines within three months of obtaining permission from the Regulating Authority.

ISNP Application Filing Period

Every ISNP applicant must complete the registration process within 15 days. After the said period, the incompleted application shall stand cancelled. Also, the IRDAI must decide on an ISNP application within 60 days of application submission. Post this period, they will be compelled to issue the license to the applicant Firm.

ISNP Compliance

Now let us talk about ISNP Compliances. Every licensed ISNP must timely file its annual compliance in. We have detailed these ISNP compliance for you.

Facility Monitoring by the ISNP

A registered ISNP with the IRDAI must ensure the following: 

• Integrity of the ADPS (Automatic Data Processing Systems) must be maintained
• Data Privacy must be maintained for both Insurer and Insured
• Adequate Mechanisms for Internal Reviewing, Monitoring, as well as evaluating the following of the ISNP must be accomplished:

1.Controls

2.Systems

3.Procedures

4.Safeguards

ISNP Operations Review

A newly incorporated ISNP must delegate the following review at least once a year to organizations, such as:

• External Certified Information System Auditor
• Chartered Accountants with DISA qualification
• CERT-IN Expert

The review must be held on the following by the ISNP:

• Controls
• Systems
• Procedures
• Safeguards

The Authority must prescribe the scope of an external audit for the ISNP platform from time to time.

ISNP Information Security Management System's Standards

An ISNP must comply with the IRDAI standards for setting up an Information Security Management System Standards of the following entities:

• International Organization for Standardization
• International Electro-Technical Commission
• Or equivalent Organization

It must be maintained at all times and have an annual review of the ISNP security systems.

Reports to the Company's Board 

The ISNP must submit the following reports to the Board or its sub-committee for their respective observations:

• CISA auditor report
• DISA-qualified expert report
• CERT-IN expert report
• Information Security Management System performance evaluation report

The ISNP must report any material findings to the ISNP operations or if it results in financial loss to the Insured, along with an action plan to address the issue.

 ISNP Auditing Procedure

The IRDAI reserves the power to undertake or, through an external agency, inspect the affairs of a licensed ISNP. The audit can be conducted at any time. But the IRDAI must timely notify the ISNP by issuing an auditing notice. The Authority must also specify in the notice the required documents to be furnished by the ISNP, useful during the inspection procedure.

ISNP License Renewal

An ISNP certification is valid for three years. After the period, the ISNP's certificate of Incorporation becomes invalid. For intermediaries such as Insurance Brokers or Corporate Agents, the ISNP permit is valid until it gets revoked. The platform must, therefore timely apply for the ISNP license renewal procedure with the IRDAI.

What if the ISNP License gets revoked?

A registered ISNP can dispense its duties till its certificate of registration is valid. In the case of the Insurance Company, the certificate is valid unless revoked. The IRDAI can revoke the ISNP license if it is of the view that the ISNP activities are one of the following: 

• Not in the Insured's interest
• Not conducive to the Insurance Industry's growth
• Violates the IRDAI's code of conduct for the ISNPs
• Not meet the essentials specified in the IRDAI guidelines
• Violate the provisions of any of the following legislatures:

1.Insurance Act

2.IRDA Act

3.Insurance Rules & Regulations, as well as its circulars, orders & notices

In each of these cases, the IRDAI must give an opportunity to the ISNP to be heard.

For more information on the ISNP Compliance, consult the Insurance Experts at Registrationwala.

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