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Become an Insurance Broker with Insurance Broker License

An insurance broker is a person or a business entity who implements their knowledge of insurance to act as an intermediary between customers and insurance companies. Insurance broker license is the required permit to become one. Consult with our experts for insurance broker license.

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Insurance Broker License process

Step 1
Get qualified
Step 2
Application filing
Step 3
Application Assessment
Step 4
fee submission
Step 5
Grant of Insurance broker license

Insurance Broker License in India

What is Insurance Broker License?

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.

 

Rules for grant of Insurance Broking License in India

 

Rules-for-grant-of-Insurance-Broking-License-in-India

Following are the rules associated with the IRDA broking license

  1. The certified insurance broker, upon obtaining this insurance broker certificate, must only solicit insurance broker services in India;
  2. After getting insurance license, the broker must comply to the provisions of IRDA Act, 1999, its regulations and other instructions issued by the authority;
  3. If the applicant has provided any information to the IRDA that later turns out to be false, it is up to the broker to clarify that information;
  4. The broker must address the grievances of the clients within 14 days;
  5. The Insurance broker must only procure as many insurance policies as it can provide services for in an efficient manner;
  6. Those with the broker license for insurance must maintain a record in the prescribed format in which it will capture the details of all the policies sold;
  7. The insurance brokerage license holder must not engage with multi-marketing services at any cost;
  8. The Licensed Insurance Broker must comply with all the points mentioned in the Code of Conduct;
  9. The insurance broker must maintain a book accounts as per the specifications of the IRDA regulations.

Thus, to become an insurance broker, an online application has to be filed. That application is provided by the IRDA portal. Registrationwala is a team of professional business license consultants. They will hold your hand as you walk through the process of acquiring the insurance broker license.

 

What are the types of Insurance Brokers?

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 an insurance broker into three types:

What-are-the-types-of-Insurance-Brokers

  • Direct Insurance Brokers: They require the Direct Insurance Broker License.
  • Reinsurance Brokers: They require the Reinsurance Broker License.
  • Composite Insurance brokers: They require the composite insurance broker license.

Direct Insurance Brokers

Direct insurance brokers are those who after getting the insurance broker register, act as an intermediary between reinsurers and the customers. It provides the following services:

  • Getting info of the client’s business
  • Communicating client’s information to the insurer
  • Rendering advice pertaining for insurance policies and terms
  • Maintaining knowledge of the insurance market
  • Submitting quotations for the consideration of the client
  • Provide risk assessment details to the insurance company
  • Acting on behalf of clients to provide insurance services
  • Assisting clients with their premium payments
  • Helping clients with opening their E-payment accounts
  • Aiding in the issuance of e-insurance policies

 

As per the IRDA regulations for an insurance broker, the Direct brokers are further categorized in three categories:

  1. Direct Broker (life): Life Insurance Brokers are the most sought after among the insurance brokers in India. They provide insurance and risk management services to clients that are seeking life insurance policies in India.
  2. Direct Broker (general): General life insurance broker license is issued to a property insurance broker. Licenses such as auto insurance broker license and health insurance broker license are issued in this regard.
  3. Direct Broker (Life & general): This insurance broker certificate is issued to those that engage with both life and general insurance policies.

 

Reinsurance Brokers

Reinsurance brokers are those entities that after getting the IRDA broker registration, provide act as an intermediary between reinsurers and insurers. They provide services such as:

  • Understanding the business philosophy of the insurance company
  • Communicating the records of the insurance company to the reinsurance company
  • Advising the insurance companies on international insurance and reinsurance markets
  • Maintaining a reinsurance market database
  • Providing risk management services
  • Selecting and recommending reinsurers
  • Negotiating with the reinsurers on insurer’s behalf
  • Employing a Broker Qualified person to aid with the solicitation of insurance policies
  • Acting as per the directions of insurance companies
  • Collecting and remitting premiums
  • Assisting with claim settlements
  • Selecting reinsurance companies for the insurers
  • enhancing market capacity for the insurers
  • Providing loss advise
  • Maintaining knowledge about inward and outward insurance business
  • Collecting and remitting funds
  • Complying with the laws and regulations of the region

Composite Brokers

Composite Brokers, as the name subject are an amalgamation of direct and reinsurance brokers. They provide direct insurance and reinsurance services in India. 

Eligibility Criteria for Insurance Broker License in India

There are many requirements to become an insurance broker in India. And one must adhere to every one of them in order to get insurance broker license.

Following are the insurance broker registration requirements to keep in mind before applying for the Insurance broker license.

eligibility-criteria-for-insurance-broker-license-in-india

Financial Requirements

Following is the paid-up capital contribution requirement for each type of insurance broker:

  1. For direct brokers, the minimum requirement is INR 75 Lakhs
  2. For reinsurance brokers, the minimum requirement is INR 4 Crores
  3. For composite brokers, the minimum requirement is INR 5 Crores

Net worth requirement

When the applicant is applying for an insurance broker license online, at the time he must adhere to the following net worth requirements:

  1. INR 50 Lakh for direct broker
  2. In the case of reinsurance and composite brokers, 50 per cent of minimum capital is required.

Deposit requirement

Following are the deposit requirement criteria, which comes to the surface when the applicant has to submit an amount to the scheduled bank for the insurance broker license:

  1. In the case of a Direct broker, a 10 lakh rupees deposit is required
  2. In the case of reinsurance and composite brokers, 10% of the minimum capital requirement is required.

Once you meet the insurance broker license requirements, you can move ahead with the procedure to acquire the license.

In addition to these requirements, the licensees must be capable of adhering to the different codes of conduct formulated for Insurance brokers by the Insurance Regulatory and Development Authority of India.

Corporate Requirements

  1. The applicant must be a company incorporated under Companies Act, 2013 or,
  2. An LLP registered under Limited Liability partnership Act, or
  3. A cooperative society registered under the Co-operative Society Act, 1912

Infrastructural Requirements

  1. The applicant must have adequate office space to render insurance services
  2. The applicant must have adequate manpower that matches up with the insurance policies it provides

Qualification requirements

  1. The Principal officer of the company must have the necessary Insurance Broker Training.
  2. The Principal officer should a Key management personnel of the applicant entity
  3. The Insurance Sale Person must also have adequate education

Documents Required for Insurance Broker License in India

Insurance broker requirements pertaining to the documentations that have to be submitted alongside a duly filled application are as follows:

  1. Certificate of incorporation of the company/LLP agreement or a Cooperative Society.
  2. Memorandum of Association will be required if the applicant is a company
  3. Principal officer details as per the instructions given by the IRDA. The principal officer must obtain the necessary insurance broker qualifications before applying for the license.
  4. A duly filled declaration expressing that the principal officer and his or her partners don’t come under those who are excluded from applying for the insurance broker license.
  5. List of two agents with the required insurance broker qualifications
  6. Bank account details of the company/cooperative society/LLP
  7. Shareholder’s list
  8. Principal bankers details
  9. Copy of the board resolution
  10. Balance sheet of the company.

Process of getting the Insurance Broker License in India

Following is the procedure the applicant has to adhere to in order to obtain the license to become an insurance broker.

Process-of-getting-the-Insurance-Broker-License-in-India

This insurance broker license process should be accompanied with the precise insurance license cost in India.

  1. Complete the insurance broker qualifications required for the license.
  2. Filing the application via FORM B. Use it to apply for insurance broker license.
  3. Alongside the form, documents have to be submitted
  4. The IRDA will then intimate the applicant, at which point the applicant has to adhere to the additional requirements.
  5. Submission of insurance broker license cost.
  6. Assessment of the application at the hands of IRDA. The Insurance Regulatory and Development Authority of India will conduct a thorough assessment of the application form and the documents. Only after completely being satisfied of the financial and technical eligibility of the applicant, will the Authority issue the insurance broker certification.
  7. Finally, the IRDA bestows upon the applicant, the commercial insurance broker license.

Note: Remember that you are not going to get a separate license for each type of direct insurance broker. For instance, there is no such thing as a car insurance broker license. What you will obtain is the general insurance broker license to solicit in car insurance policies.

After the issuance of the license, the applicant must adhere to all the rules and regulations and the code and conduct of the license.

 

Code of Conduct – Insurance

 

Code of Conduct

 

There are 11 types of Codes of Conduct that those with Insurance broker certification must keep in mind upon commencing the business:

  1. Code of Conduct relating to client relationship: This code details how the insurance brokers must conduct themselves after landing themselves an insurance client.
  2. Code of Conduct related to sales practices: This code details the rules the insurance broker must follow when conducting sales operations within their insurance companies.
  3. Code of Conduct related to furnishing information: All insurance brokers must furnish requisite information and keep the IRDA updated.
  4. Code of Conduct for explaining the insurance contract: It is essential for all insurance brokers to be as non-ambiguous as possible when explaining the insurance services to the clients.
  5. Code of Conduct related to renewal of insurance policies: This code explains how an insurance broker must inform the insured about renewal and other similar details.
  6. Code of Conduct related to client claims: This code explains the procedure and the regulations for the broker during the time the client claims the policy.
  7. Code of Conduct related to grievances: This code details the regulations brokers have to follow while address customer complaints.
  8. Code of Conduct related to documentation: This code details the regulations in regards to the documentation procedure.
  9. Code of Conduct related to advertising: This code details the regulations of the insurance broker when advertising their services.
  10. Code of Conduct related to receipt remuneration: This code details the regulations associated with the receipt of remuneration by the customers.
  11. Code of Conduct related to training: This code details the regulations associated with the training of insurance brokers and insurance sale professionals.

The Insurance broker license validity is up to three years. Afterwards, the applicant must:

  1. Apply for the insurance broker license renewal, and
  2. Retake the insurance broker license examination.

What are the conditions of Insurance broker license renewal?

  1. The applicant must have followed the code of conduct pertaining to the insurance broker regulations to the tee.
  2. The applicant must not violate any rules mentioned in the IRDA regulations for insurance broker.
  3. The applicant must fill out the application for insurance broker license renewal as soon as the expiration of the license.

Our Assistance to obtain Insurance Broker License in India

  1. We provide end to end assistance for Insurance Broker License needs:
  2. We file your application for Insurance Broker License
  3. We submit the application
  4. We conduct the follow up with the department
  5. We provide post license services as well.

Simply put, we guide your hand through each and every step of getting Insurance Broker License in India.

Thus, reach out to us if you want to become an insurance broker in India.

Insurance Broker license: FAQs (Frequently Asked Questions)

Q1. What is an Insurance Broker?

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.

Q2. Who licenses the insurance broker?

An Insurance broker is licensed by the Insurance Regulatory and Development Authority of India.

Q3. How do I become an insurance broker?

To become an insurance broker, you need to:

  1. Establish a company
  2. Train your principal officer,
  3. And, obtain the Insurance broker license.

Q4. How to get insurance broker license in India?

The process to obtain Insurance broker license in India is as follows:

  1. Complete the insurance broker qualifications required for the license.
  2. Filing the application via FORM B. Use it to apply for insurance broker license.
  3. Alongside the form, documents have to be submitted
  4. The IRDA will then intimate the applicant, at which point the applicant has to adhere to the additional requirements.
  5. Submission of insurance broker license cost.
  6. Assessment of the application at the hands of IRDA. The Insurance Regulatory and Development Authority of India will conduct a thorough assessment of the application form and the documents. Only after completely being satisfied of the financial and technical eligibility of the applicant, will the Authority issue the insurance broker certification.
  7. Finally, the IRDA bestows upon the applicant, the commercial insurance broker license.

Q5. How can I become a Health insurance broker?

To become an health insurance broker, you must obtain the Direct Insurance broker license in India.

Q6. What are the different Insurance brokerage license requirements?

  1. The applicant must be a company, LLP or society
  2. The applicant entity must have enough space to run the business operations
  3. The applicant must involve a principal officer responsible for overseeing the functions of insurance brokerage company.

Q7. What is a principal officer in an Insurance broker company?

The Principal officer of an Insurance broker company is the personnel that understand all the regulatory, technical and market aspects of the insurance broker business.

Q8. Who can become an Insurance broker?

Following entities have the permission of the IRDA to become an Insurance brokers:

  1. A company incorporated as per the companies act, 2013
  2. An LLP incorporated as per the Limited Liability Partnership Act, 2008
  3. A Society incorporated per the Society Act, 1912

Q9. What is the IRDA license renewal fees?

The government of IRDA license renewal is as follows:

  1. Direct broker: INR 1 lakh
  2. Reinsurance broker: INR 3 Lakh
  3. Composite Broker: INR 5 Lakh

It is, in many cases, same as the IRDA license fees.

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