Insurance Broker License in India
As per the Insurance Regulatory and Development Authority of India (Insurance Brokers) Regulations, 2018, an insurance broker is referred to a business entity who implements their knowledge about the insurance industry to act as an intermediary between those who are seeking insurance policies and those who are selling it.
However, in order to become an insurance broker, one needs to obtain an Insurance Broker license.
Insurance Broker license is the authorized issued by the Insurance Regulatory and development authority of India that has formulated laws for any entity looking for becoming an insurance broker in India. The applicant entity becomes bound by those rules once it obtains the broker license for insurance solicitation and procurement.
Types of Insurance Brokers in the Indian Insurance Sector
To become a licensed insurance agent or an insurance broker, you need to know about the types of insurance brokers that are present. Categorically, one can split them into three types:
Type 1 : Direct Insurance Broker
Direct insurance brokers are those who act as an intermediary between reinsurers and the customers after getting an insurance broker license. They help the clients in risk management, claim consultancy, get insurance coverage, for remuneration or fees. Also it provides insurance advisory services as they have detailed and updated knowledge of the market.
For getting e-insurance policies and claims they help their clients. Other than this, they get the information of the client's business and share it to the insurer. Help the client to choose the best policy, tell them different quotations, open their e-payment account and complete the e-insurance policies of the clients. The direct brokers work on the behalf of clients to provide insurance services.
Direct Broker (life): Life Insurance Brokers are the most sought after among the brokers in India. They provide insurance and risk management services to clients that are seeking life insurance policies in India.
Direct Broker (general): General life insurance broker license is issued to a property insurance broker. Licenses for auto insurance and health insurance are issued in this regard.
Direct Broker (Life & general): This insurance broker certificate is issued to those that engage with both life and general insurance policies.
Type 2 : Reinsurance Broker
Reinsurance brokers are those entities that after getting the IRDA broker registration, act as an intermediary between reinsurers and insurers. They have knowledge of the insurance industry and they maintain a database of the reinsurance market. Also, they advise the insurance company about the international and reinsurance markets.
They communicate records of insurance companies to the reinsurance company. Their services include risk management, negotiating on behalf of reinsurers, collecting and remitting premiums. Along with this, they employed a qualified broker person to solicit insurance policies.
To enhance the market capacity of the insurers they select reinsurance companies and assist insurers with claim settlement. The reinsurance brokers comply with the laws and regulations of the regions.
Type 3 : Composite Insurance Broker
Composite Brokers, as the name subject is an amalgamation of direct and reinsurance brokers. They provide direct insurance and reinsurance services in India. To clients they offer advice on right insurance cover and terms and conditions of the policy.
Provide services such as insurance consultancy, risk management, maintaining proper records, and negotiating claims on behalf of clients. These are all the services that are provided by a composite broker.