The insurance sector in India is rapidly growing at a rate of 15% annually. This sector provides rewarding remuneration to insurance companies, insurance web aggregators, insurance brokers, and those directly or indirectly associated with it. Insurance brokers play a crucial role as intermediaries between clients and insurance providers, facilitating smooth transactions and ensuring clients receive the best-suited policies.
An insurance broker is a professional who represents customers, ensuring they get the best insurance policy suited to their needs. Unlike insurance agents, who represent insurance companies and complete insurance sales transactions, brokers work on behalf of clients and act as advisors in the decision-making process.
According to IRDAI (Insurance Regulatory and Development Authority of India), there are three types of insurance brokers:
• Role: Sells insurance policies directly to clients.
• Commission: Earns a commission from the insurance company upon policy procurement.
• Capital Requirement: Minimum INR 75 lakhs.
• Role: Acts as an intermediary between insurance companies and reinsurers.
• Capital Requirement: Minimum INR 4 crore.
• Role: Functions as both a direct and reinsurance broker.
• Capital Requirement: Minimum INR 5 crore.
The following entities can apply for an insurance broker license:
• Companies registered under the Companies Act, 2013.
• LLPs registered under the Limited Liability Partnership Act, 2008.
• Registered Co-operative Societies.
• Any other person/entity recognized by IRDAI.
• Submit Form B as per Schedule I of Insurance Broker Regulations, 2018.
• Pay applicable fees:
o Direct Broker: INR 25,000
o Reinsurance Broker: INR 50,000
o Composite Broker: INR 75,000
• IRDAI may request additional documents, which must be submitted within 30 days.
• The license is valid for three years from the date of issuance, subject to compliance with regulations.
• Apply at least 30 days before expiry.
• Renewal fees:
o Direct Broker: INR 1,00,000
o Reinsurance Broker: INR 3,00,000
o Composite Broker: INR 5,00,000
• Form B of Schedule I.
• Memorandum & Articles of Association.
• Fit and Proper Declaration (Form G of Schedule I).
• Details of directors, promoters, and key personnel.
• Infrastructure details of the business.
• Statutory auditor and bank details.
An insurance broker license application may be rejected if:
• The applicant fails to meet formal requirements.
• The submitted documents are incomplete.
• Regulatory norms are not followed.
Reapplication can only be made one year after rejection.
• Validity: Three years.
• Renewal Application: At least 30 days before expiry.
• Late submission fees:
o INR 100 for applications within the 30-day period.
o INR 750 if applied within 60 days after expiry.
o Applications after 90 days are rejected.
| Broker Type | Application Fee | In-principal Approval Fee | Renewal Fee (3 Years) |
|---|---|---|---|
| Direct Broker | ₹25,000 | ₹50,000 | ₹1,00,000 |
| Reinsurance Broker | ₹50,000 | ₹1,50,000 | ₹3,00,000 |
| Composite Broker | ₹75,000 | ₹2,50,000 | ₹5,00,000 |
• Training & Examination: Few months.
• Application Processing: 1-2 weeks.
• Overall Process Completion: Up to 12 months.
To ensure smooth operations and avoid penalties, insurance brokers must adhere to regulatory compliance measures set by IRDAI. This includes:
• Annual Compliance Reports: Submission of financial statements and regulatory adherence reports.
• Periodic Audits: Conducting internal and external audits to assess risk and compliance standards.
• Training & Certification: Ensuring employees and key personnel undertake mandatory training programs.
Failure to comply with these regulations may result in penalties, suspension, or cancellation of the broker license. Staying updated with IRDAI notifications and amendments is crucial for maintaining a valid license.
This guide provides a structured and detailed approach to insurance broker licensing in India, helping individuals and businesses navigate the regulatory framework efficiently.
At ReturnFilings.com, we provide end-to-end support for obtaining an insurance broker license. Our services include:
a. Regulatory Roadmap – Guidance on application procedures.
b. Application Filing – Assistance in preparing and submitting applications.
c. Document Management – Secure handling of required documents.
d. Regulatory Compliance – Ensuring compliance with IRDAI regulations.
e. Reminders & Checklists – Keeping track of deadlines and submission dates.
For professional assistance, reach out to us on email: info@returnfilings.com or on whatsapp: https://wa.me/919910123091.
