As an insurance broker, you can have a bit more freedom compared to insurance agents. This is because insurance agents are tied down to one specific company whereas it is not the case for brokers. Brokers can sell more products from multiple companies thereby increasing the income greatly. With a top-notch Sibro software, you can keep track of policies and claims of every client and ensure them that they are getting the right plan for them at a reasonable price.
Wondering to kickstart your career in the insurance field? Read further and decide if you are eligible to acquire an insurance broker license in India.
Recently, in 2018, Insurance Regulatory and Development Authority (IRDA) updated the Insurance Broker Regulations and so Insurance Broker Registration can be done as follows:
- The financial requirement for Direct Insurance Broker License is of Rs. 75 lakhs.
- The financial requirement for Composite Insurance Broker License is of Rs. 5 crores.
- The financial requirement for Reinsurance Broker License is of Rs. 4 crores.
During the time of registration, a direct insurance broker must maintain 50 lakh whereas composite and reinsurance broker must maintain 50% of the minimum financial requirement.
According to IRDAI Regulations, the insurance broker license applicants can be any one from the following.
- Any company listed under the Companies Act, 2013 or 1956.
- Any LLP registered under the Limited Liability Partnership (LLP) Act, 2008. Both partners should not be (1) any individual residing outside India (2) Foreign LLP enrolled under Foreign Country Laws (3) Non-resident entity.
- Any registered co-operative society generated under the Co-operative Societies Act, 1912 or any similar laws.
- Any individual recognized by the Authority.
By this time, I hope you have got clarity on who can apply for insurance broker license. Followed by that, let’s look at a few more criteria to be satisfied.
- The entity name should contain a word ‘Broker’ or ‘Broking.’
- If the capital pay holds any foreign capital, it should not exceed 26% of the total paid-up capital.
- The principal officer must have basic qualification, undergone training, and cleared the broker’s exam.
- The company must involve at least two persons with adequate qualifications and training.
- Insurance broking should be the chief aim of Memorandum of Association.
Documents required to apply for insurance broker license:
Following are the documents to be submitted as mentioned in the Form C of Schedule I of the IRDA Regulations.
- The Insurance Broker License application and other mandatory documents to be submitted in Form B.
- A photocopy of the Memorandum of Association (MOA) and the Articles of Association (AOA) of the company.
- The applicant should submit information about a Principal officer such as qualifications, training compliance, and other criteria as mentioned in Form G of Schedule 1.
- A written declaration of the Principal officer along with the directors/partners and required managers, confirming that they don’t abide by any disqualifications as mentioned in Section 42D of the Act.
- Complete details of every director/partner, promoter, and important managerial personnel.
- Current bank account details.
- List of minimum two qualified brokers and their qualifications.
- List of all shareholders of the applicant company; present as well as proposed. If the shareholder is a company, provide the Board Resolution passed by the company in investing and promoting the applicant company.
- Information regarding the Principal Bankers and the statutory auditors.
- Balance sheet of the company.
- Details of infrastructure like IT infra, equipment, office space, and the workforce.
- Other documents as required.
Presently, insurance industry is becoming intensely complex and more competitive. Sales rate is based on intimate knowledge of your customer including their personal and financial information. It also requires you to track leads, create follow ups, and manage better communication with customers. Get yourself a professional CRM software and stay out of competitors!