Insurance broker license is availed by those individuals or firms who wish to sell insurance products of other Insurance companies. The issuance authority of the insurance broker license in India is the Insurance Regulatory and Development Authority, aka IRDA. This article will reveal the list of the documents required for the insurance broker license.
Overview on Insurance Broker License under Bylaws
The rules and the provisions for such license are drafted by the Insurance Advisory Committee under the view of the” Insurance Regulatory and Development Authority Act, 1999. The primary objective behind drafting these regulations to supervise the actions of the insurance broker and make sure that they are working under the bylaws.
Primary Role of an Insurance Broker
The primary role of an insurance broker is to offer the best suitable insurance plan to the willing customers as per their needs. In short, they help them to pick the right product to maximize benefits. The insurance brokers act as an intermediary among the potential customer and the insurance company. In general, the insurance brokers have a deep understanding related to insurance-oriented product and services. To avail of an insurance broker license in India, one has to make file a detailed application to the IRDA.
Eligible Candidates for the Insurance Broker License
- Company operating under the provisions of Companies Act, 2013.
- Any registered co-operative society established under the regulations of the Co-operative Societies Act, 1912.
- LLP operating under the LLP Act, 2008.
- Any other individual posses required certification from the authority. Note: if a person is a registered LLP then the following person cannot be a partner of the same;
- Non-resident entity
- Foreign LLP operating under foreign country laws
- Person residing outside India
Applicant willing to undertake brokering activities need to file a comprehensive application for the same and attached it with the compulsory document. The section below would explain documents required for the insurance broker license.
Documents Required For the Insurance Broker License
The following section exhibits the list of documents required to avail insurance broker license. Keep in mind that the given list encloses the particular documents mentioned in Form C of Schedule I of the IRDA regulations.
- Application related to the Insurance Broker License and other compulsory documentation to be submitted in Form B.
- Xerox of MOA and AOA of the organization.
- The applicant should provide the details regarding a Principal Officer in terms of training compliance, qualifications, and other criteria as cited in Form G of Schedule 1.
- A written declaration rendered by the principal officer, partners, and directors, regarding their acceptance to the provisions cited under the Section 42D of the Act,
- Comprehensive details regarding the promoter, director, and other managerial personnel.
- Bank account details such as account number, IFSC code, etc.
- Particular related to two qualified brokers as well as their qualifications.
- List of all shareholders associated with the company. If the organization is acting as a shareholder then furnish board resolution verified by the company.
- Particulars related to the statutory auditors and principal bankers.
- Company’s balance sheet.
- Particulars related to the infrastructure of the company such as equipment, IT infra, workforce, and area of the business premises.
- Other documents as included in the form.
So, these is the complete list of documents required for the insurance broker license
Brief on Application Procedure and Fee Structure
After gathering the said documents, the applicant needs to apply Form B as given in Schedule I of the IRDA regulations with the authority. The application will go along with non-refundable fees with the above-mentioned documents. The authority will then conduct an in-depth evaluation of the application to pinpoint the possible loopholes in the same. If authority manages to detect any issue then it will intimate the applicant for the same and ask them to take required actions to eliminate the disparities.
On the contrary, if the authority finds the application error-less on every aspect then they will grant the in-principle approval for the registration. Keep in mind that in-principal approval is not equivalent to a registration certificate. Instead, it acts as a provisional approval to conduct brokering related activities for a certain timeframe. During this timeframe, the authority undertakes an evaluation take to examine the applicant’s performance and look out for possible violations of the bylaws. If they found everything legit under the limit of compliances, then they will issue the registration certificate.
Coming to the fee structure of the said license, the direct broker has to bear a sum of Rs 25,000 as a fee for application which is non-refundable. Similarly, the applicants like reinsurance and the composite broker have to pay fees up to 50,000 and 75,000 respectively to avail a license. The authority has laid down the different fees structure for the new applicant seeking the license. The authority demands the fees of Rs 50,000, 1.5 lakh, and 2.5 lakh from Direct, reinsurance, and composite broker respectively for issuing new license. The license remains active for three years and after that applicant can apply for the renewal.
An applicant needs to submit a long list of documents for obtaining the insurance broker license in India. If you are about to make a business decision regarding the same then you must follow the above guideline precisely. Arrange the documents following the given bylaws. In case if you find it hard to cope up with the compliance requirement, then talk to CorpBiz‘s expert without any second thought. The help seekers can connect with our professional through several modes of communication that include online chat as well.
Read our article:Step by Step Procedure for Insurance Broker License