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After getting an IRDA Certificate every insurance company has to follow the rules set by IRDA to start a company. These rules are made to ensure that the business will run as per the laws and doesn’t follow any wrong practices.
Similarly, every company must follow the regulations of several authorities as per the business requirement. These Rules and Regulation are set by IRDA for companies to operate in the insurance industry. To know the other Regulations, read the complete article.
The following are the reasons behind following the IRDA Regulation set by the authority:
The Insurance Regulatory and Development Authority of India (IRDAI) has managed the compliances. These compliances are present in the Insurance Act of 1938 and the Insurance Regulatory and Development Authority Act of 1999.
The IRDA Regulations for insurance companies is under the following authorities:
Below is the IRDA compliance for an insurance company which should be followed are:
Learn more: Functions of IRDA
Guidelines for E-Commerce Insurance Company
The following regulation must be fulfilled by the insurance companies to establish a business in India:
The businesses which are established outside India must file the IRDA insurance company certified copies to the authority. These copies include a balance sheet, account statement, abstract, and report.
Along with this, a statement that an auditor or qualified person has stated must be submitted because it reflects the assets possessed by the insurer as per the dates stated in the balance sheet. They have to submit an abstract of a valuation report to the authority before the due date.
These IRDA insurance company compliances are designed for those companies that have foreign investments or foreign promoters. For insurance companies, it is mandatory to file an annual report by filing all the provisions within the specified period to RBI.
The insurance companies have specific requirements related to foreign equity, that’s why foreign investors are allowed to invest in outward investment and inward investment in the insurance sector.
As per the circular, the IRDA brokerage percentage for insurance agents, brokers, and intermediaries will be based on insurer approved policy, the commission, remuneration, and reward will be decided. The commission of life insurance, health insurance, and general insurance is stated in the table below:
Life Insurance Commission
|
S.No |
Life Insurance Policy Categories |
Maximum Commission on Single Premium Payable to Insurance Broker |
|
|
All Single Premium Life Policies |
2% |
|
|
Pure Risk Policies without return of Premium |
10% |
|
|
Immediate/ Deferred Annuity |
2% |
|
|
One-year renewable group policies |
10% |
|
|
Group Pure Risk (incl Group credit) |
2% |
|
|
Group Savings Variable Life |
2% |
|
|
Group Fund based |
0.5% of the premium paid during the year or Rs 5 lakhs whichever is less |
Health Insurance (Life Insurance) Commission
|
S.No |
Category of Life Insurance Products |
Maximum Commission/ Remuneration on Single Premium Payable |
Maximum Commission/ Remuneration on Regular Premium Payable |
|
|
First-year premium |
Renewal Premium |
|||
|
|
Retail |
NA |
10% |
10% |
|
|
Group |
2% of the premium for Rs. 2 Lakhs per scheme per policy year |
NA |
NA |
|
|
Government Schemes |
0.5% of the premium for Rs. 50 thousand per scheme per policy year |
NA |
NA |
General Insurance Commission
|
S. No |
Line of Business |
Maximum commission/remuneration |
|
|
Fire |
15% |
|
|
Marine |
10% |
|
|
Miscellaneous - Retail |
15% |
|
|
Miscellaneous - Corporate/ Group |
15% |
|
S.No |
Line of Business |
Maximum commission in 1st and 2nd year |
Maximum commission in 3rd year |
|
|
Motor |
10% |
15% |
Conclusion
In last, it can conclude that IRDA Regulations are important for insurance companies to run a successful business in India. The companies can choose the compliances as per their requirements. Any company that doesn’t have a foreign holding can’t deal with the compliances of FEMA.
We at Registrationwala, help companies to get end-to-end support to apply for an IRDA Insurance broker license. Reach out to us to get complete assistance in applying for the final issuing of an insurance broker license.
What is the compliance of IRDA?
IRDA compliance is the rules and regulations set by the Insurance Regulatory and Development Authority of India (IRDAI) for businesses run in the insurance industry.
What is the role of IRDA in an insurance company?
An IRDA is an autonomous body that protects the right of policyholders. It keeps an eye on the insurance sector in India, and if found any issue then it has a right to punish the insurance companies.
How many ombudsmen are there in India?
For grievances-related issues, there are a total of 22 regional offices of the Banking ombudsman in India.
What is the role of the compliance function in insurance?
IRDA compliances are essential to check the management and business activities of insurance companies as per the law. Also, it ensures that the company operations comply with internal standards too.
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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.
