An insurance broker license is given to an expert and qualified person, or to a company acting through its directors, partners, or employees, who are knowledgeable about the laws governing insurance and have a sufficient understanding of insurance-related products. They alert people to the necessity for insurance. An insurance broker operates as a go-between for an insurance company and a customer looking to purchase an insurance policy, providing skilled sorts of assistance to both parties.
In Simple words Insurance Broker" refers to a person or a body corporate registered by the Authority as a direct broker, reinsurance broker, or composite broker, unless explicitly specified otherwise.
The Insurance Regulatory and Development Authority (IRDA) regulates and operates the Insurance Broker License. The IRDA is also in charge of the activities and operations of the Insurance Broker License.
An Insurance Broker is a person or a firm that is registered with the IRDA and provides insurance advice. It assists the consumer in obtaining insurance from a provider. An insurance broker is a skilled, expert, and professional person who works to give insurance coverage. An insurance broker acts as a liaison between the insurance business and the clients who are looking to purchase an insurance policy.
An insurance broker can be divided into three categories.
Insurance sales and acquisition allow its customers to purchase an insurance policy using its website or software while earning a fee from the insurance agency whose policy was sold.
It is a form of insurance broker license that, in exchange for payment or other considerations, arranges insurance or maybe reinsurance for its clients with reinsurers based in India or possibly elsewhere.
It is a form of insurance broker license that provides insurance for its clients with backup plans and additional reinsurers situated in India or potentially elsewhere in exchange for payment or fees.
Who is eligible to apply for an Insurance Broker License?
People that can apply for an Insurance Broker License in India include:
If the Insurance Broker License applicant is a registered LLP, none of the following can be a partner in the same.
Any other individual or company authorized to engage in activities related to an Insurance Broker
An applicant with the following minimum capital requirements may apply for registration as an insurance broker:
During the registration process for an Insurance Broker License, the Insurance Broker must have a minimum net worth of 50 Lakhs/200 Lakhs/250 Lakhs for Direct/Reinsurance/Composite Brokers
The net-worth shall not fall below: (during the period of certification)
Failure to comply with sub-regulation (1) will require the Insurance Broker to promptly reinstate their net worth to the limits outlined in sub-regulation (1) and report their compliance accordingly. The Insurance Broker must also submit a net worth certificate, duly certified by an Auditor, every six months to the Authority. This certificate ensures the Insurance Broker meets the net worth requirement following registration.
The applicant must deposit a specified amount with the designated bank. Make sure to deposit the amount before submitting the registration application and throughout the Insurance Broker License process.
Infrastructure and Office Space:
To qualify for an Insurance Broker License, the applicant must fulfill essential infrastructure requirements, including sufficient office space, equipment, trained manpower, and IT infrastructure. These facilities are necessary to efficiently carry out their insurance brokering activities.
The applicant must ensure the presence of at least two qualified individuals who have received proper training to function as insurance brokers. This requirement is essential to conduct the insurance broker business. If the applicant engages in insurance brokering for both life insurance and general insurance, the two qualified individuals must possess relevant qualifications in both domains.
Furthermore, the principal officer of the business must also possess the necessary qualifications. This includes holding the required certificate and possessing the skills essential for conducting insurance broker business.
The Principal Officer should be a key management executive, whole-time director, partner, or hold a similar position within the company, and possess the requisite experience for the role.
To receive an Insurance Broker License, all necessary documents and information must be submitted.
An applicant must submit the following documents in addition to the information specified in Form C of Schedule I of the IRDA (Insurance Broker) Regulations, 2018.
Compliance with these requirements ensures that the applicant meets the necessary criteria for obtaining an insurance broker license.
To obtain a certificate of registration as an insurance broker, the applicant must submit an application along with the specified fees mentioned in FORM D of Schedule I of the IRDAI (Insurance Brokers) Regulations. The application fees for each category of insurance broker are as follows:
In addition to the application fees, there are mandatory fees that must be paid to meet the registration requirements:
The mandatory fees are applicable for the entire validity period of the certificate of registration.
All fees must be paid through electronic means or by demand draft (DD) in favor of the Insurance Regulatory and Development Authority of India, located in Hyderabad.
The Certificate of Registration for an Insurance Brokers License, granted by the IRDAI, will remain valid for a period of three years from the date of issue, subject to any orders or regulations issued by the authority.
It is essential for an insurance broker to possess a valid certificate and be registered with the authority. Without a proper certificate and registration, they are not permitted to conduct insurance broker business. Compliance with these requirements ensures that insurance brokers operate within the legal framework and meet the necessary standards set by the regulatory authority.
For the renewal of an insurance broker license, the following guidelines must be followed:
We share the detailed and reasonable estimated costs, documents and prerequisites for the complete process before starting the process to ensure transparency.
Our team warrants hassle free documentation. We collect the necessary documents and share the relevant drafts to ensure a timely filing and delivery.
Upon collecting the necessary documents and information, we waste no time in preparation and filing of your application. development on your application is brought to your attention.
On successful completion of the case we share all the relevant documents electronically and physically along with an assurance to pay you back if something is wrong.
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