How to Run a Successful IMF: Advantages and Regulatory Dos & Don’t

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How to Run a Successful IMF: Advantages and Regulatory Dos & Don’t

An Insurance Marketing Firm (IMF) is one of the easiest insurance entities to start in India. Being a special type of insurance infrastructure, the services it provides are far beyond selling policies. It is for that reason that many entrepreneurs are gravitating towards it to start their business.

But is the inexpensiveness of the IMF license cost and the easiness of starting this business the only reason IMF is getting traction? Or are there other benefits that have made an Insurance Marketing Firm the apple of the eye for many startups? As per the IRDAI's defined legal terms, the IMF is an entity with authorization to undertake insurance solicitation activities in the market.

What you gain when you start an Insurance Marketing Firm

An IMF is like a Pandora’s box of services; opening it will let you enjoy not one, but nine different types of benefits:

1. Access to better commission and income: Considering the operative word is “marketing”, several avenues of growth become open for you. As you are not bound with the constraints of a standard insurance entity, your business can grow to great heights.

2. Healthy corporate setup: IMF, being an entity that provides services beyond just insurance policies, creates a healthy working environment where diverse services help you run a better business.

3. Establishing a Legacy: There is a legacy vacuum in the market as few have truly tapped into this business model. You can fulfill that vacuum and establish a brand that exists for a long time.

4. Provide multiple products: Setting up the IMF IRDA allows you to provide marketing and insurance services, sell policies online, or establish alliances with other service providers.

5. Leveraging channel sales: Expansion becomes possible through strategic alliances with surveyors, loss assessors, and other insurance service providers across several domains.

6. Rewards and recognition: Because you are one of the few entities with permission to market your services, you can diversify your brand and get the recognition you seek.

7. One Customer-One Advisor Model: The financial service executive and insurance service representative can serve one customer at a time, helping you render services in a reliable manner.

8. Increasing your customer base: Because there is no limit to the types of insurance services you provide, the customer base you have access to is high.

9. Cater to a diverse customer base: Whether the customer belongs to urban, semi-urban, or rural regions, you can be there to help them with all types of insurance services.

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Dos of an Insurance Marketing Firm

An IMF must provide the following categories of services per the IRDAI's directive for the Insurance Corporate Entity:

• Procure and solicit Insurance Policies: According to IRDA regulations, an IMF can procure and solicit insurance services. It can act as an intermediary, projecting itself as an Insurance Broker to mediate between the insured and the insurer.

• Provide Insurance Services: An IMF establishes strategic alliances with other intermediaries such as:

• Insurance Surveyors

• Claim Loss Assessors

• Insurance Repositories

• TPAs (Third Party Administrators)

• Offer Specialized Back-office Assistance: This includes delegating as an Approved Officer for Insurance repositories and inducting Insurance Surveyors and Loss Assessors in the firm.

• Market Financial Products: Being a marketing enterprise, the IMF can market various financial products:

• Mutual Funds (SEBI-regulated)

• Pension products (PFRDA regulations)

• Banking products sold by NBFCs (RBI regulations)

• Non-Insurance products by the Department of Posts

Don’ts for an Insurance Marketing Firm

As per regulation 11 of the Registration of Insurance Marketing Firm Regulations of 2015, every IMF must avoid the following:

• Over-solicitation: An IMF must not indulge in soliciting insurance products of more than two life, two general, and two health insurance companies at a time.

• Misinformation: Do not misinform the authorities of any change in business structure. Information disbursal must be clear and proper.

• Neglecting Grievances: An IMF must not derelict to redress customer grievances. It must swiftly act to resolve complaints within 15 days.

• Rule Violation: Do not violate IRDAI norms or conduct multi-level marketing (MLM) or insurance product solicitation.

• Non-compliance: IMF must not be non-compliant with the code of conduct related to FSE (Financial Service Executive) and Insurance Sales Persons.

• Unsecured Policies: Policies must not be left unsecured for business commensuration or based on the number of recruited salespersons.

Conclusion

If you want to provide insurance services in a way that is interactive, reliable, and isn’t bound strictly within the insurance sector, choose an Insurance Marketing Firm. To know more about the Insurance Marketing Firm registration procedure, connect with the IRDAI experts at Registrationwala.

Consult with an IMF Expert

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