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Qualification Requirements for Insurance Broker License in Indi

• Posted by Rakesh Kumar Feb 19 - Filed in Business - #insurance broker license  #broker license  - 37 views

  Qualification Requirements for Insurance Broker License in India

   

  

   

  Insurance Brokers are corporate entities that behave as an intermediary between the Insurers and the Insured. They facilitate the policy to the needful Insured from the capable Insurance Companies. To run a business like an Insurance Broker, the applicant must apply for the requisite permit from the IRDAI. The IRDAI has prescribed certain requirements for getting an Insurance Broker License in India.The Insurance Broker License validity is typically of three years, after which the licensee can apply for the License renewal procedure.

   The Broker must get registered with the IRDAI by registering on the portal. The portal will generate a username and password and send it to the applicant on his registered email id. But before applying for the Insurance Broker certification, the applicant must observe the Insurance Broker License requirements per the IRDAI's directives. Let us see them one by one.

  Eligible Corporates as Insurance Brokers

  The following can be registered under the Insurance Broker License:

  • Company: registered under the Companies Act of 2013
  • Limited Liability Partnership: registered under the Limited Liability Partnership Act of 2008
  • Cooperative Society: registered under the Cooperative Societies Act of 1912
  • Individual/Company: permitted to conduct business as an Insurance Broker in India

   

  Capital Requirements for Insurance Broker License

  To apply for Insurance Broker License in India, the applicant must conform to the capital requirements as required by the IRDAI:

  • For Direct Brokers, the required capital is Rs. 75 Lakhs
  • For Reinsurance Brokers, the required capital is Rs. 4 Crores
  • For Composite Brokers, the required capital is Rs. 5 Crores

   

  How must an Insurance Broker maintain his Net Worth?

  Let us explain the meaning of net worth here. The net worth is defined as the cumulative bank bond that must be maintained by an Insurance Broker applying before applying for the requisite license. The proper meaning is defined in the Companies Act 2013. 

  • A Direct Broker applicant must maintain a capital of 50 Lakhs as per the IRDAI norms. 
  • A Reinsurance Broker applicant must maintain a capital of 200 Lakhs as per the IRDAI norms. 
  • A Composite Broker applicant must maintain a capital of 250 Lakhs as per the IRDAI norms. 

  The net worth of an Insurance Broker must be maintained at all times during the registration certificate procedure and not fall below the following:

  • 50 lakh rupees for the Direct Broker
  • 50% of the minimum capital contribution specified under Regulation 19(1) for the Reinsurance as well as Composite Broker Act

  If the Broker falls for non-compliance with the stated regulations, it must immediately restore the net worth to the given limits above compliance. The Broker must also submit to the Authority a net worth certificate. Such a certificate must be authenticated by an Auditor every half-year.

   

  Deposit Maintenance at Banks

  Before the commencement of the Broker Business, every Broker applicant must ensure the deposit's maintenance with the scheduled bank. The deposited sum must be:

  • 10 Lakh Rupees for a Direct Broker
  • And 10% of the minimum contribution for Reinsurance as well as the Composite Broker. The Authority will not permit the release of fixed deposits to Brokers without its prior written permission.

   

  Office Facility of an Insurance Broker

  The Insurance Broker License applicant must build the necessary infrastructure for dispensing the brokering services to the Insurers as well as the Insured:

  • Adequate Office Space
  • Equipment
  • Trained Manpower
  • IT Infrastructure

  For more on the Insurance Broker eligibility requirements, as well as License renewal, you can refer to the IRDAI experts at Registrationwala.