Understanding the Types of IRDAI License: A Comprehensive Guide

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Understanding the Types of IRDAI License: A Comprehensive Guide

The insurance market has different parts as per the demographics. For instance in metro cities, you will find big finance institutes, private, and public banks in every area. In rural areas, you see regional rural banks (RRBs), cooperatives, commercial banks, and self-help groups. 

All these entities required licenses issued by the authority to provide their services to people. Here in this article, different types of financial institution certifications and their eligibility criteria discuss. Read this comprehensive guide to know the requirements for obtaining licenses.

Types of IRDAI License:

1. Insurance Marketing Firm License

The RBI launched the IMF as a distribution channel in 2015. It creates a one-stop solution for the individual so that they get different financial offerings at various stages in life. The Insurance Marketing Firm should register under the IRDAI. An IMF can sell a maximum of 2 policies each, life, health, and general insurance along with Agricultural Insurance Company of India, and Export Credit Guarantee Corporation Ltd.

To provide the service of IMF a company should have an IRDAI license and fulfill the following criteria:

• The applicant's net worth should not be less than Rs. 10 lakhs.
• If the applicant is applying for an insurance marketing firm in a particular district then the net worth must be Rs. 5 lakhs.
• The aggregate holding of equity and shares by foreign investors should not exceed 49% of contribution or paid-up capital.
• The Director, Principal Officer, and Shareholder should not be disqualified by any law.
• Must satisfy the FIT and PROPER tests.
• The name must include the words ‘Insurance Marketing Firm’.

2. Insurance Broker License

An Insurance Broker is a person who can be a direct broker, reinsurance broker, or composite broker. And to provide the services, they required an IRDAI license issued by an authority. The following are the criteria for every insurance broker:

• Direct Brokers: These are the ones who help their clients get insurance coverage, claim consultancy, and risk management services for remuneration or fees. They required a minimum capital of Rs. 75 lakhs with an application fee of Rs. 50 thousand.
• Composite Insurance Broker: As per the IRDA, the composite broker will register by the authority. They solicit and arrange insurance and re-insurance for their clients in India or abroad. They required a minimum capital of Rs. 4 crores with application fees of 1.5 lakhs
• Re-insurance Broker: A reinsurance broker's functions are similar to direct brokers but with only one difference direct broker help clients in buying the policy and a reinsurance broker work with insurers to sell reinsurers. They required a capital of 5 crore and an application fee of 2.5 lakhs.

3. Corporate Agent License

A corporate agent can be an organization or company which represents an insurance company. They sell the policies of insurance companies and to work as a corporate agent, one must acquire a license. The agent can sell insurance policies of each, life, health, or general. Along with this, they have to follow several guidelines:

1. The minimum net worth capital or contribution is required of Rs. 50 lakhs.
2. The applicant should not be disqualified under any law
3. As per the authority, the Principal Officet must be graduated and complete a minimum of 50 hours of practical training of syllabus and then preparation. 
4. The applicant must acquire office space, equipment, and a trained workforce to complete their activities effectively.
5. The principal officer and employees should not break the code of conduct prescribed by the authority to obtain the corporate agent license. 
6. The key person must satisfy the proper criteria.

4. Insurance Repository Registration

An insurance repository company registered under the Companies Act, 2013. It is a public company to which the certificate is granted by IRDA. The license has been provided for the management of data on insurance products and services.

The information in the repository is stored in a digital format on behalf of the insurance companies. It makes the holding of policies easy which are issued online. To do all the activities, the insurance repository required a license and for that, it should fulfill the following criteria. 

• Only the public limited can apply for the insurance repository license 
• The applicant's name must contain the “insurance repository” to show the area of the company’s work.
• The object must undertake changes, modifications, and revisions in e-insurance policies. 
• The net worth of the applicant must be Rs. 25 crores.
• The applicant and its promoters must have the knowledge and experience of the sector.
• They must have the financial and organizational strengths to execute the project.
• The applicant should not have foreign direct investment.

5. Insurance Company License

An insurance company license gives the authority to the company to sell every type of insurance product. The state insurance commissioner will issue the license including, life, health, or general insurance. If anyone wants to sell the policy in another state then they required a license for each particular state. Below are some criteria which should be fulfilled to get the license.

1. Must be an LLP registered under the LLP Act, 2008.
2. Any company which is an insurance provider before the commencement of the act provides a maximum of 26% of paid-up capital is allowed to hold a foreign company.
3. The business paid-up capital must be rs. 200 crores.
4. Documents must show proof of payment of a non-refundable fee of Rs. 5 lacks.

How Registrationwala Can Help You?

At Registrationwala, we help businesses to obtain IRDAI licenses in different categories. We assist businesses in the following manner: 

• File the application
• Draft the documents
• Follow up with the Authority

In the end, we ensure that the process doesn’t take much time and you get the license quickly. So, if want to acquire an IRDAI license in any category mentioned above reach out to us and we will help you in every possible way.

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