Price Comparison Websites (PCWs) are websites that serve as a valuable tool for consumers. It facilitates the consumers while making purchases.
This article aims to give its readers an overview of PWC and its usefulness. Moreover, it also discusses in detail the regulations, limitations, measures, and the role played by the relevant authorities of the UAE.
Nevertheless, it allows them to make a well-informed decision rather than impulse buying. All such types of websites aggregate important data from various retailers and wholesalers. They present all the data to the users. There are certain standards and thus information is based on specific criteria.
Nonetheless, it offers a great degree of ease and convenience to its users. On the contrary, consumers using PCWs can sometimes lead to making decisions without fully understanding the products or services they are choosing to buy.
Such issues need to be addressed properly. This is a major concern for the protection of consumers. Henceforth, the Insurance Authority (IA) is the regulatory body of the UAE. They have introduced rules and regulations for PCW. You can also visit the Advocates and Legal Consultants here, having license to practice in DUBAI, and expert in such cases.
This definition underscores the specification that any website offers insurance premium comparison services. All such businesses should be registered with the Insurance Authority.
The new regulations introduced by the UAE government establish clear restrictions and regulations for PWCs. The enterprises and entities that engage with PCWs need to follow the requirements.
It is essential to note that insurance companies and individuals in insurance-related professions are prohibited from dealing with PCWs. They are authorized to engage with these websites.
Besides, insurance companies that collaborate with insurance brokers that are using PCWs should adhere to the prices and coverage displayed on the websites. Normally, Insurance brokers tend to work with PCWs.
They are subject to certain obligations that are outlined by the Insurance Authority. Some of the obligations are described below:
Insurance brokers are not permitted to deal with unregistered websites. Insurance brokers must not engage with PCWs who are not registered with the Insurance Authority in UAE.
They need to submit a properly signed agreement for it. Insurance brokers are required to submit a copy of the agreement between themselves and the PCW owner.
This is an agreement that contains all the terms and provisions that restrict the broker’s activities. It may limit activities including insurance policies, communication with customers, issuance of insurance certificates, and the nature of services provided. The agreement must categorically specify the referral allowance paid to the PCW.
The Insurance Authority (IA) imposes a list of restrictions on PCWs in the UAE. It is done to ensure transparency, fairness, and equal practices for all. Let us delve into the list of limitations on PCWs.
They are not allowed to engage in insurance activities. PCWs are banned from indulging in insurance-related activities. This may include insurance agents, insurance brokers, or any other insurance-related profession. It also restricts them from underwriting insurance or collecting insurance premiums.
Data handling needs to be carefully done. PCWs must refrain from storing or copying electronic data or information related to their potential clients. All the information should be electronically transferred to the relevant insurance company. There is no need to create copies.
Commission limitations are also imposed. PCWs can only charge a lump sum amount. It is considered as a referral allowance. Further, they are restricted from imposing any other commissions.
Their scope of work is limited. PCWs can only compare insurance premiums. This should be done more clearly, explicitly, and legibly state this exclusivity on their website. There is a formal way to register for PCWs. We will discuss in depth the registration Process for PCWs. Let us begin:
- Additionally, the company’s memorandum of incorporation needs to specify the overall objective of the company. This is done to provide a service for comparing insurance premium rates.
- Nevertheless, the company must submit an undertaking. They need to provide an undertaking to the relevant authority named IA. It shows the commitment to comply with the laws.
- Designate a contact person to serve the purpose. Furnish the Insurance Authority with the contact information of an employee. The employee is the one who is held responsible for communication with the concerned authorities.
- PCWs are required to renew their registrations with the Insurance Authority on an annual basis. Therefore, they need to provide certain information in detail whenever the registration renewal process takes place.
- There are adequate measures for Violations by PCWs. For instance, in a case where violations by PCWs are verified through sufficient evidence and proof the relevant authorities may take measures. Some of the prominent measures taken by IA include the following:
- They issue a warning letter. It instructs the PCW to rectify the violation within a certain time. Moreover, it prohibits the PCW from dealing with the insurance broker for a specific period.
- In the case of repeated violations, blocking the PCW temporarily is a possibility. It is done by coordinating with the Competent Authorities at the discretion of the IA.
- The IA’s regulations on Price Comparison Websites (PCWs) intend to bring more clarity, transparency, and fairness. It also makes sure compliance with insurance-related activities takes place.
- By establishing clear guidelines and restrictions, the Insurance Authority may seek to safeguard consumer rights. Besides, they maintain integrity within the insurance industry.
- NOTE: No liability is owned.Please check with the concerned lawyers, if you want to take a legal action.
