How To Start A Insurance Brokerage Firm In India?

Schedule I Form (Form B) and other required documents, as well as the application fee, must be sent to the Insurance Regulatory Development Authority of India (IRDAI).

DOCUMENTATION REQUIREMENTS

At least two directors/partners must sign the declaration and the application form.
In the case of a company, the Memorandum and Articles of Association, or in the case of a partnership firm, the Partnership Deed.
The auditor has duly reviewed and validated a detailed statement of the company’s shareholding pattern, which includes the names of the shareholders, the number of shares held, share certificate numbers, and folio numbers.
Individual shareholders’ IT returns for the previous three years, coupled with their net worth certificates and affidavits proving the source of invested funds
The shareholder firm’s board of directors passed a resolution on the investment in the company.
If the shareholding company is an NBFC (non-banking finance company), the RBI NA will issue a No Objection Certificate.
Detailed CV and documented testimonials, including the Principal Officer’s training certificate.
The qualifications and training of the individuals, as well as their testimonies and training certifications.
List of people in charge of obtaining insurance business, together with their references.
Revenue account, profit and loss account, and balance sheet projections for the following three years.
Affidavit stating that you have not been disqualified under Section 42 D of the Insurance Act.
The company’s directors and staff agree not to hold any directorships or employment in any other insurance firm.
Any director/employee who does not hold an agency/surveyor/TPA license must sign an undertaking.
Assurance that no one related to the applicant has ever been denied a license by the authorities.
The Principal Officer swears that the code of conduct will not be broken.
Undertaking that the applicant is not involved in any other company save the purposes stated in the MOA/Partnership Deed.

POINTS TO CHECK

Whether the organization complies with the minimum capital requirements as set forth in the Regulations.
Is the Fixed Deposit of 20% of the initial capital made in a scheduled bank?
The principal officer possesses the necessary qualifications, has passed the Brokers exam, and has undergone the necessary training.
At least two people with the necessary qualifications and training are hired by the company.
It has the necessary infrastructure and skilled personnel to operate an insurance brokerage firm.
The people in charge of obtaining insurance business are qualified and well-trained.
Two directors should sign the declaration that is part of the application format.
Payment of the required fee, as determined by the kind of insurance broker, by demand draft payable in Hyderabad, as required by Schedule II of the IRDA (Insurance Brokers) Regulations, 2002.
The Registrar of Companies has produced a printed copy of the Memorandum and Articles of Association. Regulation 9(2) (H) of the IRDA’s (Insurance Brokers) Regulations, 2002 shall be the major goals of the Memorandum and Articles of Association. (It must be verified that the MOA/principal AOA’s objectives are strictly limited to insurance brokerage activity.) Furthermore, the capital clause prohibits the corporation from having capital in any form other than equity, and there shall be no voting power differentiation.)
The applicant should take steps to ensure that the training requirements outlined in regulation 9 (2) are met (F). The training requirement set forth in section 9 (2) (F) of the IRDA (Insurance Brokers) Regulations, 2002 must be met before any application for a license can be considered.
In a broking firm that meets Regulation 9’s standards, one Principal Officer must be present.
(1) The applicant certifies that the Principal Officer has not broken the code of conduct set forth in Schedule III of the IRDA (Insurance Brokers) Regulations, 2002, and that no complaint has been filed against him as of the date. (2) The Principal Officer is appointed only to carry out the activities of an Insurance Broker under Regulation 2 (1) (k) and is not a director, employee, or agent of any other insurance-related or other company, either full-time or part-time.
Information on whether any person linked with the application company holds an insurance agency or insurance surveyor’s license in his or her role as a director, shareholder, promoter, key management staff, or employee. If so, please provide all relevant information. According to the rules, no agent or surveyor can act as a broker. The applicant should take steps to close the agencies and provide documentation to the Authority to prove it.
All of the directors’ CVs are detailed, showcasing their history and current activity.
Detailed CVs and attested copies of testimonials of the principal officer’s and key management personnel’s educational qualifications.
The applicant (directors, principal officer, key management staff, and employees of the company) must provide an affidavit, duly notarized, verifying that none of the disqualifications stated under sub-section 42 D of the Insurance Act, 1938 apply to them.
List of all present and proposed shareholders of the application company.
Employees who will be in charge of seeking and obtaining insurance business, as well as their qualifications
Details of statutory auditors and principal bankers, as well as the applicant’s bank account number.
If the shareholder is a firm or a group of firms, determine whether they are Non-Banking Finance Companies. If yes, send a Reserve Bank of India No Objection Certificate for marketing and investing in Applicant Company. If not, a certificate from the statutory auditors is required.
Provide the Board Resolution made by it/them in promoting and investing in Applicant Company if the shareholder is a firm/firms.
If the shareholder is a firm or a group of firms, send an audited annual report, a three-year balance sheet, and verified copies of income tax returns.
Individual promoters must present certified copies of their income tax returns, balance sheets duly certified by auditors for the last three years, and net worth certificates certified by CA.
Explain the applicant company’s current activities in detail.
Clarification on how the applicant company intends to handle its existing clients, business, and liabilities after it enters the insurance broking sector.
The company’s name must include the terms ‘Insurance Broker’ or ‘Insurance Broking’ to indicate its line of business, which is insurance broking.
Details of the registered office’s infrastructure, including ownership/lease agreement paperwork for office space/equipment/trained manpower, and future plans for creating branch offices in other locations across the country, as well as the projected time frame with images of the premises.
The revenue account, the profit and loss account, and the balance sheet for the projected three years are drawn from projections of administrative expenses, salaries and wages, and other expenses.
The organization chart depicts the company’s many functions, such as IT, underwriting, risk assessment, claims settlement, marketing, accounts, and back office.
List of experienced employees with good knowledge and experience working in the fields of risk assessment, underwriting, and claims management, etc., who have been inducted from a general and life insurance background. To the Authority, submit a complete CV, copies of educational qualifications, and appointment/joining letters for the candidates who have been chosen.
Any involvement by any other Regulatory Authority on the Promoters / Management / Applicant Company as of the date must be declared by the applicant.
Confirmation that the contents of Circular Ref: 063/IRDA/Memo/07-08, dated March 18, 2008, have been followed ( if applicable)
Any other information relevant to the kind of services given by the applicant for the growth and marketing of the insurance business should be recorded.
Following the completion of the prerequisites, the applicant must appear before the Authority for a presentation of business plans related to the application.
The applicant business must present a document, fully attested by the auditors, detailing the names of the shareholders, the number of shares owned, the percentage of shares held, share certificate numbers, folio numbers, and other information, as well as its authorized and paid-up capital position.
The applicant company must present a certificate from the auditors detailing its current resource deployment.
A bank certificate showing the current balance in the applicant company’s account must be submitted.
The company’s directors/employees must provide an undertaking that none of the company’s directors/employees are directors/employees of, or represent, any other insurance-related firm.
The Director and Principal Officer must sign an agreement stating that the broking premises, including branch locations, shall be utilized solely for the broking company.
Take out a single FD in accordance with Regulation 22 for a minimum term of three years for a sum equal to 20% of the initial capital and submit a letter from the bank stating that the Authority has a lien on the FD and that no amount shall be released without the Authority’s prior permission, and no loan shall be released against it.
To achieve compliance with Regulation 10, the minimum Paid Up Capital for Direct Brokers, Reinsurance Brokers, and Composite Brokers will be Rs.50, Rs.200, and Rs.250 lakhs, respectively.
After receiving in principle approval, the applicant must present documentation of surrender of agency licenses/corporate agency licenses, as well as confirmation from insurers. (When appropriate)

How can I become an insurance broker in India?

A bachelor’s or master’s degree is required, as well as any equivalent qualifications such as being a fellow or associate of the Insurance Institute of India/Insurance Institute of Risk Management/Insurance Brokers Association of India.
Engage in any insurance consultancy or reinsurance activity for a period of seven years prior to submitting an application. Being a principal underwriter or manager in any Indian nationalized enterprise.
The Insurance Regulatory Authority of India requires that you have completed sufficient hours of academic and practical training.
After you’ve completed your course, you’ll need to pass the National Insurance Academy’s exam.

How do I become a insurance broker?

The applicant should submit an application for the type of insurance broker business he or she want to operate.
Form B- Schedule I of the regulations must be used to apply for an Insurance Broker License.
The application must be accompanied by the documentation listed in the regulations’ FORM-C Schedule I.
An application must be filed along with the fees indicated in FORM D- Schedule I of the Insurance Regulations in order for the certificate of registration to be granted. The following are the fees that must be paid in order to apply for an insurance broker:
Aside from that, there are fees that must be paid in order to meet the registration requirements:
Direct Broker: Rs. 50,000/- if the application is new and an in-principle approval is granted. The fees for renewal of registration will be Rs 1,00,000/- for a three-year term.
Re-insurance Broker: Rs. 1,50,000/- if the application is new and an in-principle approval is granted. If the registration needs to be renewed, the renewal price is Rs. 3,00,000/- for three years.
In the case of a fresh application, a composite broker would be paid Rs.2,50,000/- when an in-principle approval is granted.
If the registration needs to be renewed, the renewal price is Rs. 5,00,000/- for three years.
The required fee would be paid for the duration of the certificate of registration’s validity.
Fees must be paid in cash or by demand draft (DD) payable to the Insurance Regulatory and Development Authority of India, Hyderabad.
The applicant must submit these documents within 30 days of getting notification from the authority if they are necessary.
If the authority believes that all of the required information complies with the Insurance broker license, the applicant will be given an in-principle approval to comply with the certificate of registration requirements.
If the applicant has followed all of the laws and regulations, the authority will issue the certificate.
When the applicant is satisfied that the code of conduct will be followed, the applicant will be issued a certificate of registration as an Insurance Broker License.
The broker who applies for a certificate of registration may also apply for other IRDAI registrations. After granting the certificate of registration for the first occasion, such other registration would be allowed to the applicant.
If the certificate of registration has been canceled/ repealed owing to a change in law or held by a Securities Appellate Tribunal or any court of law, the applicant can submit a fresh application. An application under this can only be made to the relevant authority after one year.
If the authorities believes the applicant has not met the necessary standards, the application for beginning an insurance business may be refused.
Within 30 days of receiving notification of the rejection, the authority must communicate its refusal to grant the application for an insurance broker license.
After a year has passed since the application was rejected, the applicant can submit a new application.

How can I start my own insurance company in India?

To begin the process, the individual who wants to start an insurance company must first fill out Form IRDA/R1 and submit it along with the required documents, which include:

Copies of the charter documents that have been certified (Memorandum of Association and Articles of Association).
A five-year business plan that has received the Board of Directors’ approval.
All of the directors’ information was verified, including their names, addresses, and occupations.
A certified copy of the paperwork detailing the Indian promoters’ and international investors’ shareholding agreement.
Certified copy of the Indian promoters’ and foreign investors’ annual reports for the previous five years.

If all goes according to plan and the reviewing authority (IRDAI) approves the initial submission of Form IRDA/R1, the candidate can apply for the registration certificate in Form IRDA/R2.

If the application is for a Life Insurance, General Insurance, or Health Insurance business, there must be verifiable evidence that the company’s paid-up capital is at least Rs.100 crore.

If the application is for the reinsurance business, there must be documentary evidence that the business’s paid-up capital is at least Rs.200 crore.

The Indian promoters’ and foreign investors’ affidavits stating that the paid-up capital available is adequate even after the preliminary expenses are deducted.
Evidence of payment of a non-refundable fee of Rs. 5 lakh in the form of documents.
Document verifying FDI Rules compliance, assuring that the 49 percent cap on capital owned by foreign investments is respected and adhered to.
Certification as a practising Chartered Accountant or Company Secretary is essential.

If the reviewing authority is satisfied with all parts of the application, it will issue the insurance business a certificate of registration in Form IRDA/R3. If it is not pleased with the application, it may reject it and notify the applicant within 30 days of the order or rejection, together with the grounds for the rejection. The applicant has 30 days from the date he or she receives the order of rejection to file an appeal with the Securities Appellate Tribunal.

If the applicant is given a certificate of registration, he or she must begin doing business within 12 months of receiving the certificate of registration. The applicant’s registration will lapse if he or she fails to do so. If the reason for non-commencement is genuine, however, the authorities may allow the applicant a 12-month extension to do so.

How can I get IRDA Licence?

The application is reviewed and validated by IRDA before being approved or rejected. To apply for a new license, follow these steps:

Select New License from the drop-down menu. Form 1-AF (New License Application) is shown. The form’s mandatory fields are denoted with an asterisk (*).

Are insurance agencies profitable?

Many insurance companies operate with margins as low as 2% to 3%. Smaller profit margins mean that even little changes in an insurance company’s cost structure or pricing can have a big impact on the company’s ability to make money and stay afloat.

How can I get broker license in India?

You must first submit an application to the Membership Services Department in order to become a stock broker. The Compliance, Recommendation, and Membership Selection committee will review the application when it is filed. The SEBI Certificate is issued after approval, and the trading system is provided.

How do I register a brokerage firm?

APPLICATION FOR REGISTRATION AS A STOCK BROKER WITH THE SEBI

Sole proprietorship, partnership, corporation, or financial institution are examples of organizational structures.

How can I get insurance license in India?

A candidate must pass the IRDAI IC 38 pre-recruitment qualifying exam to become an Insurance Agent in India. A candidate must pass the IRDA IC 38 Exam to become a General Insurance Agent in India.

Who pays an insurance broker?

Nobody likes to put in the time and effort to obtain an insurance quote, then prepare to switch to a new insurance provider, only to discover that there is an additional fee they weren’t aware of that could have a significant impact on their decision. Hopefully, I can shed some light on how an insurance broker is compensated so that you may make better decisions. (Because personal (car and house) and commercial (business) insurance are two different beasts, I’ll be focusing on personal lines insurance in this post.) When shopping for a new insurance agency, keep in mind that each state has strong rules that govern the insurance sector and offer the framework for these various payment methods.

Compensation #1

An insurance broker might be compensated in a variety of ways. An insurance broker is often compensated by the insurance company with which they place your policy. It’s typically a percentage of the overall cost of the policy, and it’s already factored into the premium. Each company determines its own commission percentage, which is pre-approved by each state. It’s similar to how an insurance agent who isn’t a broker is compensated. You might be wondering if you can skip the insurance broker and go straight to the firm, avoiding the commission and so save money on your insurance. No, that is not the case. Even if you went straight to one of the companies, the pricing would be the same; they’d just keep the commission, and you’d be dealing with an 800 number rather than an agency, but at the same price.

Compensation #2

Many states allow a broker to charge a broker fee in addition to a commission. Typically, the only requirements for this price are that it be acceptable, stated, and accepted with a signature. For all new business, renewal business, and many service transactions, some insurance brokers levy a fee. Some insurance companies only charge a fee to new customers when they purchase their first policy.

We have chosen not to charge a broker fee and instead get compensation from the businesses we work with.