POSP App Development: Build for Indian Insurance
AI Summary: POSP app development supports insurance distribution under an insurer or authorised intermediary. The app must respect the Point of Sales Person role and permitted product scope rather than imply independent broking authority. Agent onboarding, training records, quote and policy integrations, commissions, customer servicing and audit trails form the core operational platform. |
A Point of Sales Person (POSP) is IRDAI's simplest insurance distribution role. After short training and an exam, an individual can sell a defined set of simple, pre-underwritten products such as motor, personal accident, travel, home and term life. Insurance brokers, corporate agents and insurers use POSP networks to reach customers through local agents, dealers and shopkeepers. Almost all of that work now happens in an app.
A POSP app is more than a quote-and-pay screen. It has to recruit and train POSPs, certify them, give each one a POS code, limit them to the products IRDAI allows, tag every policy to the POSP who sold it, and keep records an inspector can check. This guide covers the IRDAI rules, who can run a POSP network, the lifecycle and architecture, key integrations, the compliance features to build, and what drives cost.
For the wider licensing picture, see our Fintech Licensing Requirements 2026 guide. If you are building a consumer comparison site instead, read our guide to insurance marketplace development under IRDAI's web aggregator rules.
POSP app development: What IRDAI allows a POSP to do
IRDAI has two sets of POSP rules: the Master Circular on Point of Sales Products and Persons – Life Insurance, and the Guidelines on Point of Sales Person for non-life and health insurers.
Topic | Life insurance (POSP-LI) | Non-life and health |
Identity | PAN or Aadhaar | Aadhaar or PAN |
Eligibility | At least 18 years old, 10th standard pass | At least 10th standard pass |
Training and exam | 15 hours of in-house training by the insurer or intermediary, followed by an exam and certificate | Training and online exam as specified in the guidelines, with a certificate on passing |
Appointment | Appointment letter within 15 days of passing, with a POS code | Engaged by an insurer or an insurance intermediary |
Products | POS-Life products: pure term (with or without return of premium), non-linked non-participating endowment, immediate annuity, non-linked fixed-benefit health; plus micro insurance | Motor package and third-party (two-wheeler, private car, commercial vehicle), personal accident, travel, home, and other products IRDAI approves |
Tagging | POS code on proposal and policy | POSP's Aadhaar or PAN on proposal and policy; policies prefixed "POS –" |
Accountability | Insurer or intermediary responsible for the POSP's conduct | Insurer or intermediary responsible for the POSP's conduct |
A few rules shape the product directly:
Products are pre-underwritten. POS-Life products use non-medical underwriting only, and every benefit is fixed and disclosed upfront. IRDAI publishes a list of products approved for POSPs. Your catalogue must show POSPs only products approved for that channel.
A POSP represents one principal. Under the non-life guidelines, a POSP can represent an insurance company or an insurance intermediary. A POSP engaged by an intermediary can sell POS-Life products of all insurers that intermediary is authorised to place.
Commission flows through the intermediary. For life products, when a POSP is engaged by an intermediary, the insurer pays no commission to the POSP; it goes to the intermediary, which then pays its POSPs under its own arrangement.
Records last five years. Life training and exam records must be kept for at least five years from the end of the financial year in which they happen.
IRDAI has revised its distribution rules several times, so confirm the current training mechanism for each line with your insurer or intermediary partner before you hard-code it.
Who can run a POSP network: choose your route
Only an insurer or an IRDAI-registered insurance intermediary can engage POSPs. A technology company cannot appoint POSPs on its own.
Route | Who engages POSPs | What you build | Fit |
Insurer-run POSP channel | The insurer | Single-insurer POSP app tied to its policy admin systems | Insurers adding an agency-light channel |
Broker-run POSP network | An IRDAI-registered insurance broker | Multi-insurer quote, compare and issue app for POSPs | Brokers and insurtechs with their own broker licence |
Corporate agent or IMF | A registered corporate agent or Insurance Marketing Firm | POSP tools limited to the agent's tie-up insurers | Banks, NBFCs, dealers and distribution companies |
Technology partner | A licensed broker, corporate agent or insurer you contract with | White-label or custom POSP platform operated under their licence | SaaS companies, dealer networks, fintech apps without an IRDAI licence |
Getting your own intermediary registration
Owning a broker, corporate agent or IMF registration gives you control over insurer tie-ups, products and POSP economics. IRDAI publishes the requirements for each category and its intermediary regulations, which set capital, principal officer, training, conduct and reporting requirements. You also inherit the intermediary's obligations under IRDAI's Information and Cyber Security Guidelines, 2023. Registration takes time, so many teams start on the partner route and apply in parallel.
Building for a licensed partner
On the partner route, the licensed entity engages the POSPs and is responsible for their conduct, so expect it to require its own branding on POSP communications, control over training content and exams, access to all records, and approval of every product and payout rule. Design the platform as multi-tenant from day one if you plan to serve more than one partner.
The POSP lifecycle your app must support
Recruit: lead capture, referral tracking and eligibility pre-check (age, education, identity).
Onboard: PAN and Aadhaar-based identity checks, bank account verification for payouts, document upload, consent, agreement e-sign.
Train: the required training hours delivered and tracked, with time-on-module evidence.
Examine and certify: online exam, pass or fail logic, certificate generation.
Appoint: appointment letter and POS code issued within the required window.
Sell: quote, compare, propose, pay and issue for permitted products only.
Service: renewals, endorsements, claims assistance, customer communication.
Pay: payout calculation from intermediary revenue, statements, tax deductions, disputes.
Monitor and exit: conduct reviews, complaint linkage, suspension, termination and record retention.
Reference architecture
Module | Responsibilities |
POSP onboarding | Identity and KYC, eligibility rules, document vault, agreements, bank verification |
Learning management | Training content, hour tracking, exam engine, certificates, refresher modules |
POSP registry | POS codes, status (trainee, certified, appointed, suspended), principal mapping, hierarchy (POSP, team lead, branch) |
Product catalogue | Insurer products tagged by line and POS eligibility, per-POSP and per-region availability |
Quote and issuance | Insurer API orchestration for quotes, proposals, payment links and policy PDFs |
Customer and policy store | Customers, policies, renewals, endorsements, documents, POS code tagging |
Payments | Premium collection to the insurer, receipts and acknowledgements |
Payout engine | Intermediary revenue reconciliation, POSP payout rules, statements, holds and clawbacks |
CRM and engagement | Leads, renewals, reminders, WhatsApp and SMS templates |
Compliance and reporting | Training and exam records, policy-to-POSP reports, half-yearly returns data, audit trail |
Admin | Maker-checker approvals, role-based access, partner tenant configuration |
Two design choices pay off later. First, keep the product eligibility rules in configuration, not code, because insurers add and withdraw POS products. Second, make the POS code a first-class key across policies, payments and payouts, so every rupee and every policy traces back to one certified POSP.
Key APIs and integrations
Insurer APIs: quote, proposal, payment and policy issuance APIs for motor, health, travel, personal accident and term products. Each insurer differs in data models, so build an adapter layer that normalises them. Our guide to integrating the Policybazaar API shows how aggregated insurance APIs are structured.
Motor data: vehicle registration lookups where your insurer partners support them, to prefill motor quotes.
KYC: PAN verification, Aadhaar-based eKYC or offline verification, and CKYC where insurers need it for customers. See our explainer on CKYC and unified KYC.
Payments: UPI, cards and payment links that settle to the insurer, with webhooks for policy issuance.
Bank verification: penny-drop for POSP payout accounts.
E-sign: POSP agreements and, where applicable, proposal forms.
Communications: SMS, email and WhatsApp for policy delivery and renewal reminders.
Compliance features to build
Training, exam and certification records
Store training sessions, time spent, exam attempts, scores and certificates against each POSP, and keep them for at least five years. Generate appointment letters only once the exam is passed, and enforce the 15-day appointment window for life POSPs with alerts.
Product restriction engine
A POSP must only see and sell approved POS products. Enforce this on the server, not only in the interface: every quote request should check the POSP's certification status, line of business and the product's POS eligibility. Block sums assured or features outside POS parameters; for example, POS-Life endowment products cap the sum assured at ₹10 lakh per insurer.
POS code tagging
Every proposal and policy must carry the POSP's identifier (the POS code for life, Aadhaar or PAN-based tagging under the non-life guidelines). Pass it to the insurer on every proposal and check it on the issued policy. Mismatches should open an operations ticket.
Customer consent, KFD and turnaround times
For POS-Life products sold online, IRDAI requires explicit consent to the Key Features Document on a screen, with a copy emailed to the proposer. Policies should be issued, or the decision communicated, within four working days of the proposal being collected, and refunds made within seven days if the proposal is rejected. Track these timers per proposal.
Premium collection and acknowledgements
Where POSPs are allowed to collect premiums, the insurer must arrange for them to issue acknowledgements and is accountable for those acknowledgements. Prefer payment links that settle directly to the insurer, so POSPs never hold customer money, and generate an acknowledgement for every collection.
Conduct monitoring and returns
The insurer or intermediary is liable for misconduct by its POSPs, and for intermediaries, POSP conduct is considered when its registration is renewed. Build dashboards that flag unusual cancellation rates, complaint clusters and repeated proposal rejections per POSP. For life products, intermediaries provide POSP business data to insurers for half-yearly returns to IRDAI; generate those datasets from the policy store. A sales audit layer helps here; see our post on AI-based audits of insurance sales and claims.
Data and cyber security
IRDAI's 2023 cyber security guidelines apply to insurers and intermediaries, and insurers expect their distribution partners to follow equivalent controls. Plan role-based access, encryption, Aadhaar data handling that follows UIDAI rules, logging, vulnerability testing and incident response. Mask customer identifiers in the POSP interface wherever the POSP does not need them.
Cost and timeline drivers
We do not quote a fixed price because scope varies widely. The factors that move cost and time most:
Number of insurers and lines. Each insurer API integration needs mapping, testing and certification, and motor, health and life each bring different data and flows.
Route. A single-insurer channel is simpler than a multi-insurer broker platform with comparisons and payouts across insurers.
Learning management. Using an existing LMS is quicker; a built-in training and exam engine with proctoring adds work but keeps records in one system.
Payout complexity. Multi-level hierarchies, slabs, clawbacks and tax deductions are often underestimated.
Offline and assisted selling. Low-connectivity support, document capture and vernacular interfaces add effort but matter for field networks.
Partner reviews. Insurer IT security assessments and integration sign-offs often decide the launch date.
Build plan in phases
Foundation: route decision, partner or registration plan, POSP onboarding, LMS and exam, registry with POS codes.
First line of business: usually motor or personal accident with two or three insurers, payment links and policy delivery.
Compliance and payouts: POS code reconciliation, payout engine, statements, conduct dashboards and returns data.
Scale: more insurers and lines (health, term), renewals engine, CRM and analytics. Our list of must-have insurance CRM features is a useful checklist here.
FAQs
Who can appoint a POSP in India?
An insurance company or an IRDAI-registered insurance intermediary, such as an insurance broker, corporate agent or Insurance Marketing Firm. The appointing entity is responsible for the POSP's conduct.
What are the eligibility rules for a POSP?
For life insurance, a POSP must be at least 18, have passed 10th standard, provide PAN or Aadhaar, complete 15 hours of training and pass an exam. The non-life guidelines also require at least a 10th standard pass, identification by Aadhaar or PAN, and passing the specified training and exam.
Which products can a POSP sell?
Only products approved for POSPs. In life insurance these are pure term, non-linked non-participating endowment, immediate annuity and fixed-benefit health products. In non-life they are motor package and third-party, personal accident, travel and home insurance, plus anything IRDAI specifically approves.
Can a technology company run a POSP app without an IRDAI licence?
It can build and operate the technology, but POSPs must be engaged by an insurer or a registered intermediary. On the partner route, that licensed entity appoints the POSPs, owns the regulatory responsibility and usually controls training, products and payouts.
How long must training and exam records be kept?
For life POSPs, the Master Circular requires training and exam records to be kept for at least five years from the end of the financial year in which they were conducted.
Can a POSP sell policies from multiple insurers?
Yes, if the POSP is engaged by an intermediary, such as a broker, that is authorised to place business with several insurers. A POSP engaged directly by an insurer places business with that insurer.
Build your POSP platform with Fintegration
Fintegration builds insurance distribution, lending and payments platforms for fintechs and intermediaries in India and the US. We can help you design the POSP onboarding, training and certification flow, the product restriction engine, insurer API adapters and the payout engine, whether you hold your own IRDAI registration or build for a licensed partner. Talk to our team to scope your build.
