Before filing an IRDAI application to obtain an insurance broker license, you must first make a decision regarding the type of corporate structure you want for your insurance broker firm. While making this important decision, it is necessary that you only choose an eligible business structure, as not all business structures are eligible for obtaining an insurance brokerage license.
As per the IRDAI rules, only an Limited Liability Partnership registered under the LLP Act 2008, a Company registered under the Companies Act 2013 and a Cooperative Society registered under the Cooperative Societies Act 1912 are eligible to apply for an IRDAI broker license.
Choosing an ineligible structure can result in rejection of your license application. Therefore, from the very beginning, you should ensure that your entity is registered under an eligible structure.
Yes, a co-operative society registered under Cooperative Societies Act 1912 (or any State/Multi-State Cooperative Societies law) is regarded as an eligible structure for the purpose of securing IRDAI insurance brokerage license. However, it must be noted that registering a co-operative society alone is not enough to obtain this license. There are many other eligibility conditions set forth by insurance regulator for insurance broker registration that the society must mandatorily adhere to.
This includes meeting the minimum capital requirements and infrastructure requirements as well as other regulatory conditions. Once all the mandatory requirements are fulfilled, the co-operative society can finally begin to apply for the license with IRDAI.
To obtain insurance broker licence for co-operative society, the following steps need to be followed:
Step 1: The first step is to register the cooperative society under the Co-operative Societies Act 1912 or any applicable State or Multi-State Cooperative Societies law.
Step 2: After registration for the co-operative society is done, the members must pass a resolution authorizing the filing of the IRDAI application for the license.
Step 3: After that, make sure that the co-operative society meets all the eligibility conditions that are set forth by IRDAI for the insurance broker registration.
Step 4: After that, you need to gather and prepare all documents required at the time of making an insurance brokerage license application like cooperative society registration certificate and key personnel details among others.
Step 5: Thereafter, you must file insurance broker licence application with IRDAI online in the prescribed format. Along with the application, make sure you attach all the required documents. You must also pay the IRDAI application fees.
Step 6: Once IRDAI receives your application, it will examine it carefully to verify the details. If needed, the Authority may seek additional information. If all the requirements are met, the Authority will grant the IRDAI broker licence to the cooperative society.
The benefits of obtaining an IRDAI broker license through a cooperative society are as follows:
The IRDAI allows co-operative societies to apply for and hold an Insurance Broker License. Unlike many business structures that are not eligible to obtain an IRDAI broker licence, a duly registered cooperative society is specifically recognized by the Authority as an eligible applicant for the license.
One of the advantages of obtaining a broker licence through a cooperative society is that its members can pool their resources. This makes it much easier for the society to meet the minimum paid up capital requirements and licensing fees prescribed by IRDAI.
The co-operative societies also have access to a captive and loyal customer base consisting of its own members. This feature allows them to reduce expenses related to traditional marketing as well as customer acquisition.
Another benefit is that unlike traditional corporate structures where profits are mainly distributed to external shareholders, co-operative societies can distribute surplus profits directly among their members based on their level of participation, business volume or use of services.
A co-operative society registered under Cooperative Societies Act or any other applicable law governing cooperative societies is one of the only three types of entities eligible for an IRDAI insurance broker license. The other two eligible entities are a company registered under Companies Act and a limited liability partnership registered under LLP Act.
In case you need any professional assistance in obtaining IRDAI broker registration, you can contact our experienced consultants at Registrationwala.
Q1. What is a co-operative society?
A. A co-operative society is a voluntary association of individuals who come together to meet a common goal. It prioritizes member welfare over profit-making. In India, co-operative societies are registered under the Co-operative Societies Act or any other state/multi-state law.
Q2. Can a co-operative society obtain IRDAI insurance broker registration?
A. Yes, a co-operative society is eligible to obtain IRDAI insurance brokerage registration provided that it meets all the eligibility requirements set forth by the Authority. To know more, you can connect with our experts.
Q3. What is the validity of an insurance brokerage licence issued by the IRDAI?
A. The IRDAI now issues the broker licence on a perpetual basis. This means that the license remains valid indefinitely and does not require periodic renewal, subject to payment of annual fees and continued compliance with regulatory requirements.
Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, finance and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.
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