Overview of Insurance Company Licence | Eligibility & Procedure
The ability to buy and sell insurance products is granted by holding an insurance company licence. The state insurance commissioner is in charge of issuing the licence to purchase and offer various types of insurance, such as life and disability, health, vehicle, and worker's compensation. Anyone who resides in one state but sells insurance in nearby states is required to have a licence from each state. Although it is not necessary to work with an enrolled office to obtain the licence, it is necessary once you plan to work together.
Prior to 1999, the 1938 Insurance Act and the Controller of Insurance managed our nation's insurance industry. However, the creation of IRDA has significantly altered the insurance industry. People became aware of the need for licence renewal in the sector of insurance companies as a result of the development of IRDA. The insurance industry's earlier regulations were out of date and irrelevant.
Before applying for an insurance company licence, it is required that all components get a Certificate from the Authority. The IRDA can provide the licence required for several forms of insurance, such as life insurance, fire insurance, marine insurance, etc. In any case, it is important to keep in mind that the life insurance industry will not merge with any other type of insurance industry.
Scope of IRDA
India's insurance business is governed by the Insurance Regulatory and Development Authority of India (IRDAI), a central body. In addition, the organisation monitors India's insurance industry regulation. This oversight body ensures that there is a healthy balance between insurance companies and policyholders. The fact that your business will deal in financial items makes having an insurance licence crucial. Insurance contracts ensure the policyholder's financial security in the event of a certain incident. Therefore, these places are frequently restricted. Thus, obtaining an IRDA licence is necessary before opening an insurance company.
Documents Required to Obtain Insurance Company License
The document needed to apply for an insurance company licence:
Application for Registration of Insurance Company License
The candidate will submit an application in Form IRDAI/R2 for the issuance of a certificate of registration once the authority acknowledges the demand application. The application will include the supporting information:
The type of insurance products, the level of actuarial, bookkeeping, and other expert specialists in the administration, as well as the association structure, will all be taken into consideration by the authority after receiving the application. The certificate will be given to the applicant in Form IRDAI/R£ once the authority has completed its investigation and is satisfied. If the Authority doesn't feel satisfied with the information provided by the applicant for the purpose of acquiring an insurance company licence, they may reject the application.
Within thirty days of the day the order of rejection entered into effect with the reason for rejection, the candidate will be informed of their rejection. Within 30 days of receiving the discharge order, a candidate may speak with SAT.
The candidate who has been granted a licence to operate an insurance firm must start doing business within a year of receiving the licence.
Registration Procedure for Obtaining an Insurance Company License
The steps involved in registering for an insurance company licence are:-
Circumstances under which an applicant is not eligible to file an application under IRDAI/R1
Conditions that prevent an applicant from submitting an IRDAI/R1 application:
Suspension of Certificate of Insurance Company License
Some of the actions will results in the suspension of the certificate of insurance company license are discussed below:
Renewal of IRDA Licenses in India
Form IRDA/R5 is used by applicants who have insurance licences to submit their applications. This application needs to be turned in before the year is over. The following records must be provided with a renewal application as evidence of renewal:
The authority will accept the application if the insurance firm does not renew by December 31 of each year. On the other hand, the applicant will incur a penalty equal to 10% of the total amount owing if payments are not made on time.
The charge will be deposited into the Reserve Bank of India's account held by the Insurance Regulatory and Development Authority of India.
Certificate in duplicate - Additionally, the insurance firm may request a duplicate certificate from the IRDAI. A Rs 5000 application fee and an IRDA/R4 application must be submitted by the applicant.
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Why Corpbiz for Insurance Company License?
Corpbiz services assist you and your businesses in obtaining the necessary licenses to operate in the insurance industry. Below are the services offered by Corpbiz in getting an insurance company license:
We'll put you in touch with an expert in insurance licences who can offer quick, top-notch assistance. We follow up with each jurisdiction as your licence renewal or application is finalised, post the photos of your business licence to your online portfolio, and mail you the originals. Through our safe portal, you'll also have complete access to your insurance licence portfolio.
Frequently Asked Questions
The ability to buy and sell insurance products is granted by holding an insurance company licence. The state insurance commissioner is in charge of issuing the licence to purchase and offer various types of insurance, such as life and disability, health, vehicle, and worker's compensation.
The plan of action for obtaining an insurance licence from IRDA,
The procedure for having insurance products approved by IRDA, and
The process for appointing an insurance intermediary.
The applicant is a business registered under the Companies Act of 2013 and is certified by MOA and AOA.
Information on the directors, including name, address, and profession
Certified copy of the Indian promoters' and foreign investors' annual reports for the last five years
Certified copy of the shareholding contract between the applicant's foreign investors and Indian promoters
The approved five years business strategy from the Board of Directors.
The Insurance Regulatory and Development Authority of India (IRDAI), which was established in 1999 under the administrative law known as the Insurance Regulatory and Development Authority Act, 1999, is the primary regulator for insurance in India.
If an insurance agent suffers from any of the disqualifications listed in subsection (4) of section 42 of the Act at any time during the validity of the licence, the designated person may revoke the insurance agent's licence and recover the licence and the identity card that was previously issued from him..
"Insurance Repository" refers to an organisation created in accordance with the Companies Act of 1956. It is an organisation that has received a certificate of enrolment from the Insurance Regulatory and Development Authority (IRDA) for maintaining information on protection arrangements for its insurers in an electronic format. The Insurance Repositories allow holding protection arrangements that are communicated electronically to be unwound.
In India's life coverage sector, LIC had a restricting infrastructure in place from 1956 to 1999. The Malhotra Committee Report's recommendations led to the creation of the Insurance Regulatory and Development Authority (IRDA) in 1999. IRDA is a self-governing organisation that develops and manages the country's protection industry.
In 1996, the Insurance Regulatory Authority was established as an interim authority. The Insurance Regulatory and Development Authority (IRDA) Act was approved in 1999, and on April 19th, 2000, the Indian IRDA attained self-sufficient status.
In 1996, the Insurance Regulatory Authority was established as an interim authority. The Insurance Regulatory and Development Authority (IRDA) Act was approved in 1999, and on April 19th, 2000, the Indian IRDA attained self-sufficient status.
A company that provides financial assurance to insurance companies is known as a reinsurer. Reinsurers tackle risks that are too big for insurance companies to handle on their own and allow backup plans to get more business (endorse more approaches) than they would otherwise have the opportunity to.
The purpose of maintaining an insurance repository is to elegantly provide policyholders with the simplicity to maintain insurance policies in electronic format as well as to quickly and accurately accept updates, adjustments, or revisions to the protection arrangement. Additionally, the shop serves as a one-stop shop for some approach administration necessities. The Insurance store structure also achieves efficiency and simplicity in the issue and support of insurance policies.
The IRDAI must receive an application in the form IRDAI/R1 for the issuing of a demand for the registration application from a candidate seeking to licence an insurance firm.
According to the plans, the government is scrapping the Insurance Act's requirement that reinsurers have a minimum capital of Rs. 200 crores and life, general, and health insurance companies with a minimum capital of Rs. 100 crore.
Compared to other industries, working for an insurance firm or independent agency offers more job stability. You can start repaying your college debts right away and begin accumulating savings for the future.