Every Insurance Marketing Firm (IMF) licensed by the IRDAI to operate in the insurance market must appoint a Principal Officer (PO) as its legal representative. The appointed PO represents the IMF in all its legal proceedings and formal representations.
The IRDAI has laid down guidelines regarding the appointment of a PO in IMF. There is a proper procedure that an IMF must follow while appointing its PO.
In this article, we have explained the entire framework for the appointment of a Principal Officer in an Insurance Marketing Firm. If you are planning to start an IMF, going through this article is recommended.
A Principal Officer, abbreviated as PO, refers to the designated executive at an IMF responsible for ensuring compliance with all regulatory guidelines mandated by Insurance Regulatory and Development Authority of India (IRDAI).
The POs are appointed in accordance with the IRDAI (Registration of Insurance Marketing Firm) Regulations, 2015.
To become a PO of an IMF, a person must meet all the rules set by the IRDAI. These rules include IRDAI PO qualifications, work experience, training, III examination, and fit and proper criteria.
Only after meeting all these requirements can a person become a PO of an IMF. Let us understand these requirements one by one, in a detailed manner, in the next section.
The core eligibility criteria for becoming an IRDAI Principal Officer at an IMF is defined below:
Every Insurance Marketing Firm can appoint a PO only if he or she meets any one of the eligibility conditions prescribed by the IRDAI. These are:
Associate or Fellow of the Insurance Institute of India, Mumbai
Associate or Fellow of the Institute of Actuaries of India
Associate or Fellow of the Chartered Insurance Institute, London
Postgraduate qualification from the Institute of Insurance and Risk Management, Hyderabad
Graduate with at least 2 years of insurance experience before the year in which the application is made
Graduate with at least 5 years of experience in the financial services sector before the year in which the application is made
MBA or an equivalent qualification from an institution or university recognized by the UGC, AICTE, any State Government, or the Government of India
Associate or Fellow of the Institute of Chartered Accountants of India, New Delhi
Associate or Fellow of the Institute of Cost Accountants of India, Kolkata
Executive or Professional qualification from the Institute of Company Secretaries of India, New Delhi
Any other qualification specified by the IRDAI from time to time
Principal Officer eligibility criteria for the IMF include undergoing the required 50 hours of IMF training. He or she must receive training from an institution recognized by the Authority. The PO must also pass the examination conducted at the end of the training period. The examination is conducted by the Insurance Institute of India, which is an insurance examination body recognized by the IRDAI.
Only if the PO of IMF has any one of the following educational qualifications can he or she undergo 25 hours of training and appear for the examination:
Associate or Fellow of the Insurance Institute of India, Mumbai
Associate or Fellow of the Institute of Actuaries of India
Associate or Fellow of the Chartered Insurance Institute, London
Postgraduate qualification from the Institute of Insurance and Risk Management, Hyderabad
The IMF must follow the training methodology and examination procedure applicable to the Principal Officer, as specified in the Third Schedule of the IRDAI Regulations.
Suppose the Principal Officer has undergone training and passed the respective examination required for the post of a PO in any of the following:
Insurance Broking Company
Corporate Agent
Web Aggregator
In such cases, the IRDAI will exempt the Officer from the training and examination requirements to become the Principal Officer of the Insurance Marketing Firm.
However, this exemption will apply only if the training and examination were undertaken within a period of five years preceding the date of application as PO of the IMF.
The fit & proper criteria for the PO of an IMF is as follows:
The Authority will consider the Principal Officer of the Insurance Marketing Firm as a fit and proper individual only if he or she fulfills the following conditions:
Has financial integrity
Is devoid of any convictions or civil liabilities
Is competent in his duties dispensation
Has a good reputation and character
Is efficient in his work and works honestly
Does not suffer from any disqualification for acting as an intermediary under the IRDAI Act, as amended from time to time
The IRDAI may consider a Principal Officer as not fit and proper in the following cases:
If a court of law has convicted the PO, the IMF or its full-time director or managing partner for any criminal offence involving moral turpitude, economic offence, fraud or other serious offences as considered by the Authority.
If an order for winding up has been passed against the IMF.
If the PO, the IMF, its full-time director or managing partner has been declared insolvent and has not been discharged.
If the Authority or any other regulatory authority has passed an order restraining, prohibiting or debarring the Principal Officer, the IMF, its director or managing partner from insurance solicitation or related service activities.
In such cases, the disqualification continues for one year after the expiry of the period mentioned in the order.
If the PO or the Insurance Marketing Firm is financially unsound.
The PO may also be declared not fit and proper for any other reason recorded in writing by the Authority.
The IMF PO must submit the Fit and Proper Form prescribed by the IRDAI along with the application for grant of a new IMF registration, together with the required supporting documents.
Also Read: Role of Principal Officer in IMF
A PO must be appointed by an IMF with due care as he/she serves as the key managerial person responsible for regulatory compliance. He/she acts as the official point of contact between the IMF and the IRDAI. To become eligible, a PO must meet the prescribed qualification and experience requirements laid down by the Authority. In addition, he/she is generally required to undergo 50 hours of training, or 25 hours in certain cases where the candidate holds specified professional qualifications, and must also pass the Insurance Institute of India (III) examination unless exempted under the regulations.
Further, the PO must satisfy the IRDAI fit and proper criteria and submit the required Fit and Proper Form at the time of IMF registration. Therefore, appointing a qualified and compliant Principal Officer is a quintessential requirement for IMF’s lawful functioning
For more information about the Insurance Marketing Firm and its registration process, connect with our consultants at Registrationwala.
Q1. Does an IMF PO need to take the III examination?
A. Yes, an IMF PO needs to mandatorily take Insurance Institute of India (III) examination and pass it. They must score at least 50% to pass the examination.
Q2. Which regulations govern the IMF POs?
A. The IMF POs are primarily governed by the IRDAI (Registration of Insurance Marketing Firm) Regulations, 2015.
Q3. Which institute conducts examinations for IMF POs?
A. Examinations for IMF POs are conducted by the Insurance Institute of India (III), which is based in Mumbai.
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, telecom, 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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