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Register Your Insurance Broker License With Us

Recently, the term "insurance" has been used a lot, particularly in light of the global COVID-19 epidemic that is still running strong. The public's understanding of the significance of insurance has only grown as medical costs have skyrocketed to absurd levels. In addition, the Indian insurance market is expanding steadily, and brokers are widely available. The term "insurance brokers" is most frequently used to describe these brokers. These intermediaries serve as the link between the general public and insurance firms.

An insurance broker license is granted to a competent and experienced person or business operating via one of its directors, partners, or employees who is knowledgeable about insurance-related regulations and possesses an adequate understanding of insurance products. They question people about whether they need insurance. An insurance broker serves as a go-between for an insurance company and a person looking to purchase an insurance policy, providing expert help to both parties.

Who is an Insurance Broker?

It is a common misconception that insurance brokers and agents are interchangeable. Nonetheless, there are a few points when the two diverge. A specialist who represents clients and makes sure they have the greatest insurance plan for their needs is known as an insurance broker. In contrast, an insurance agent receives a commission for recommending the company's goods to clients.

Nevertheless, it should be remembered that the insurance business is represented by the insurance agent. Additionally, the agent is authorised to close insurance sales deals because they are the company's representative. This is not an option available to insurance brokers; instead, they must turn over the account to the insurance agent or the business.

What is Insurance Broker License?

The Insurance Regulatory and Development Authority also known as IRDAI regulates and operates the insurance broker license. IRDA also oversees the duties and operations of the Insurance Broker License. An insurance broker is a person or corporation registered with the IRDA and provides insurance advising services. It assists the customer in the process of obtaining insurance coverage from an insurer. An insurance broker is a competent, knowledgeable and professional who works with the goal of providing insurance coverage. An insurance broker works as an agent between the clients who are looking to purchase an insurance policy and the insurance company. According to these rules, an Insurance Broker License should fall into either of the following classifications:

  • Direct Insurance Broker License - Capital Required: Rs 75 Lakh
  • Composite Insurance Broker License - Capital Required: Rs 5 Crore
  • Reinsurance broker license - Capital required: Rs 4 crore

Who can Apply for an Insurance Broker License?

The following people or organisations can apply for an Insurance Broker License:

  • Any company that has incorporated under the Companies Act, 2013.
  • Any legally recognised co-operative society founded in accordance with the Co-operative Societies Act of 1912 or any other comparable legislation.
  • Any LLP that has been registered under the Limited Liability Partnership Act of 2008.
  • Any other individual recognised by the authority.

If an application for an Insurance Broker License is an LLP registered under the Act, none of the following may be a partner in the same:

  • Entity that is not a resident.
  • Any foreign limited liability partnership registered under foreign legislation.
  • Anyone living outside of India.

Types of Insurance Brokers

Here are the types of insurance brokers in India:

1. Direct Insurance Broker

Direct brokers are licensed by the IRDAI or the Insurance Regulatory and Development Authority of India and are knowledgeable about their client's insurance needs in order to explain and arrange them with insurers. A direct broker advises on the most suited policy and its terms and conditions.

These brokers follow the directions supplied by their clients. They must also keep themselves up to speed on specific knowledge of the insurance markets, manage insurance records, and aid with claim negotiations. The minimum capital needed for registration is Rs. 75 lakhs, with a net worth of Rs. 50 lakhs.

2. Composite Insurance Broker

Composite brokers combine the functions of direct brokers with reinsurance brokers; therefore, they play two roles. Composite brokers must have at least Rs. 5 crores in capital and maintain a net worth of 50% of the minimum capital requirement.

3. Reinsurance Broker

Reinsurance is insurance for the insurance firms. A reinsurance broker negotiates reinsurance contracts between direct insurers and reinsurers. Because he/she works on behalf of both parties, he/she is contractually bound to both. These brokers negotiate contracts in addition to determining the best insurance for each customer they serve. The minimum capital needed for registration is Rs. 4 crores, with a net worth of 50% of this amount.

Eligibility Criteria in Terms of Corporate Structure

  • Any partnership firm that is registered under the Limited Liability Partnership Act, 2008.
  • Any co-operative society registered under the Co-operative Society Act of 1912.
  • Any business incorporated under the Companies Act of 2013 or previous Companies Act.
  • Any other individual recognised by the IRDAI to conduct insurance broker activity.

Minimum Financial Requirements for Insurance Broker License

Direct brokers pay Rs 75 lakhs, while reinsurance registration costs Rs 4 crore. Composite brokers pay Rs 5 crore.

1. Net Worth Requirement

  • Insurance Broker License registration requires a minimum net worth of Rs 50 lakhs for direct brokers.
  • For reinsurance and composite brokers, 50% of the minimum capital is required.

2. Deposit Requirement

The applicant must deposit a specific amount with the designated bank. Make sure you deposit the cash before submitting your registration application and throughout the Insurance Broker License process.

  • Direct Broker - Rs 10 lakhs
  • Reinsurance and Composite Broker - 10% of the minimum capital required

Functions of Insurance Broker License

The functions of an insurance broker license are mentioned below:

Functions of a Direct Broker

  • Acquiring thorough knowledge about the client's company and risk management approach.
  • Getting to know the client's company and underwriting information can assist you in clarifying business-related issues to the insurer and others.
  • Making suggestions on appropriate insurance coverage and terms.
  • Having a comprehensive understanding of the available insurance marketplaces.
  • The insurer delivers a quote for the client's consideration.

Functions of a Re-Insurance Broker

  • Familiarise yourself with the client's business model and risk retention strategy.
  • Maintaining clean and healthy records of the insurer's operations.
  • Giving advice on insurance coverage and the many types of insurance covers available in the international insurance and reinsurance markets.
  • Creating a database of accessible reinsurance markets, including solvency ratings for individual reinsurers.
  • To safeguard reinsurance, we provide risk management services.
  • Negotiating with a reinsurer on the client's behalf.

Functions of a Composite Broker

  • The composite broker performs all of the tasks of the direct broker and the reinsurance broker.

Documents Required for Insurance Broker License

The following are the essential documents that an applicant must provide, together with the information stated in Form C of Schedule I of the IRDA (Insurance Broker) Regulations, 2018:

  • To apply for an insurance broker license, fill out Form B and include a copy of the MOA and AOA.
  • Additionally, Form G of Schedule I should include information on the Principal Officer and if they meet the necessary requirements.
  • Furthermore, check that all relevant preparation requirements are met before submitting the application.
  • A written confirmation from the principal official stating that they, together with directors, accomplices, and other senior administrative staff, are not subject to the exclusions outlined in Section 42 D of the Act.
  • Complete details on directors/accomplices, marketers, and other important administrative personnel.
  • List at least two certified agents and their talents. This is crucial since they will be responsible for all insurance requests and acquisitions following enlisting.
  • Bank account details.
  • Details of Principal Bankers and Statutory Advisors.

Procedure to Apply for Insurance Broker Registration

The procedure to apply for Insurance broker registration is mentioned below:

  • To apply for an Insurance Broker License, candidates must complete Form B in Schedule I of the rules, submit a non-refundable application fee, and provide all relevant documents.
  • If the authority has any questions after reviewing an application for an Insurance Broker License, they may request further information, documents, or consent from the applicant.
  • Candidates must supply requested data, reports, or explanations within 30 days of communication.
  • If an applicant meets all of the requirements for an Insurance Broker License, the authority will provide in-principle permission for registration.
  • After receiving basic clearance, candidates must agree to additional requirements and submit their insurance broker license expenses to the authority online.
  • If the authority is satisfied that all the prerequisites expressed in the Act, guidelines, Rules, rules, fliers, and so on are fulfilled by the candidate, along with the conditions expressed in the basic level approval declaration, it will give a Certificate of Registration in Form J recommended in plan 1.

Insurance Broker License Fee

The fee for the Insurance Broker License is submitted in Schedule I of Form D.

Non-Refundable Application Fees

  • For Direct Broker - Rs. 25,000
  • For Reinsurance Broker - Rs. 50,000
  • For Composite Broker - Rs. 75,000

Registration Fees for Fresh Registration

  • For Direct Broker - Rs. 50,000
  • For Reinsurance Broker - Rs. 1,50,000
  • For Composite Broker - Rs. 2,50,000

Renewal Fees for a Period of 3 Years

  • For Direct Broker - Rs. 1,00,000
  • For Reinsurance Broker - Rs. 3,00,000
  • For Composite Broker - Rs. 5,00,000

Insurance Broker License Validity and Renewal

The insurance broker license certificate is valid for three years after it is issued. At least one month before the date of its expiration, an application for the renewal of a registered insurance broker license is submitted.

Renewal of Insurance Broker License

  • Applications to renew an insurance broker's license must be submitted to the appropriate body thirty days before the license's expiration date. The application must be submitted using Schedule I, Form K of the rules.
  • If an application is submitted after the certificate has expired but before it actually expires, a payment of Rs. 100/-must be given together with the application.
  • The applicant must follow the same if there is a delay in submitting the application for registration renewal. The applicant should pay Rs. 750/- if this lawsuit is filed within sixty days of the registration certificate's expiration.
  • Any application that is received after the 60-day period has passed can only be reviewed one year later. The insurer is not allowed to do any kind of business or solicit any kind of business during that one-year period.
  • After the registration certificate has expired for ninety days, an insurance broker will not be eligible to apply for renewal.
  • After the certificate expires, insurance brokers must continue to do business as brokers, with the exception of serving current policyholders.
  • The application for a broker insurance certificate renewal has to be submitted exactly like a new one.
  • The applicant must be informed if their application or renewal is denied.

Get an Insurance Broker License with Corpbiz

Corpbiz provides assistance to people and organisations seeking to get an Insurance Broker License from the Insurance Regulatory and Development Authority of India, or IRDAI. Aspiring insurance brokers can receive professional advice and consultation from Corpbiz, a company that specialises in insurance rules and licensing. Moreover, Corpbiz can help with the license application preparation and completion. To make sure everything is in order and complies with regulations, we may assist with gathering and organising the necessary documents. Furthermore, we also guarantee that applicants fulfil all IRDAI-established regulatory standards.

In order to assist applicants in establishing their company structures in compliance with IRDAI requirements, we are able to provide legal and compliance services. To guarantee continuous compliance with IRDAI standards, Corpbiz may help with the development of risk management plans and offer auditing services.

Frequently Asked Questions

A broker offers a large selection of insurance from both privately held companies and the broader public under one roof. The broker is an independent person who is well-versed in almost all of the insurance products and strategies that the insurance companies provide.

The Insurance Regulatory and Development Authority (IRDA) in India has established norms that govern Insurance broker license holders' responsibilities. The IRDA issued a revised version of the Insurance Broker Regulations 2018 in 2018.

Any company registered under the Companies Act, 2013, any co-operative society formed in accordance with the Co-operative Societies Act of 1912 or any other previous law, any LLP registered under the Limited Liability Partnership Act, 2008, or any other authority recognised by the authorities.

Having a sufficient level of inclusion for any protection strategy is very fundamental. In fact, the assessment of the benefit based on advertising worth or reestablishment worth should be thoroughly considered even before concentrating on the Sum Insured with regard to any benefit or property protection. The rate corresponding to the uncovered portion of the benefit must be primarily borne by the protected in the event that the Sum Insured does not satisfy requirements.

The insurance broker license certificate is valid for three years after it is issued. At least one month before the date of its expiration, an application for the renewal of a registered insurance broker license is submitted.

The functions of a re-insurance broker include familiarising yourself with the client's business model and risk retention strategy, and maintaining clean and healthy records of the insurer's operations, providing risk management services, negotiating with a reinsurer on behalf of the client.

Underwriting refers to the process that a financially specialised co-operative uses to assess whether to grant a customer access to their product, such as protection. The risk for the protection contract is acknowledged, and the premium rate is decided upon based on the evaluation.

The insurance broker application fee is Rs. 25,000 for direct brokers, Rs. 50,000 for reinsurance brokers and Rs. 75,000 for composite brokers.

A broker-qualified person is someone who has completed the required training and passed the test and works as an employee or director of an insurance and reinsurance broker that solicits and purchases insurance business.

The applicant is required to pass at least 10th standard and shall be above 18 years of age. The Insurance Regulatory and Development Authority of India (IRDAI) must certify the application.

For a general/life insurance license, the candidate must complete 50 hours of training from a training facility that has been certified by the IRDA; for a composite license, the requirement is 75 hours of training. The IC33 test for life insurance and the IC34 exam for a general insurance license must be passed by the candidate.

Yes, you may use the Point of Sales Persons (POSP) model, which the IIRDAI created in 2015, to sell insurance plans of multiple insurance companies.

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