Step by Step Guide for Registering as Insurance Broker with IRDAI

Step-by-Step Guide for Registering as Insurance Broker with IRDAI

An insurance broker represents consumers in their search for coverage and can sell policies from several different insurance companies for a commission. Unlike captive and independent agents, who represent one or more insurance companies, a broker’s primary duty is to the client.

In Bharat (India), The Insurance Regulatory and Development Authority of India (IRDAI, the Insurance Regulator) is a statutory body under the jurisdiction of the Ministry of Finance, Government of India, and is tasked with regulating and licensing the insurance and re-insurance industries in India. Insurance Brokers are a separate licensed regulated category as per IRDAI that are regulated, supervised, and registered with IRDAI.

Here are the quick requirements to Register as an Insurance Broker in India:

1. Understanding Broker Categories:

Insurance brokers in India fall into five categories:
Direct Broker (Life)
Direct Broker (General)
Direct Broker (Life & General)
Reinsurance Broker
Composite Broker

2. Eligibility Criteria:

Eligible entities include companies under the Companies Act 2013, LLPs under LLP Act 2008, co-operative societies under the Co-operative Societies Act 1912, and other recognized entities.
Capital requirements:
Direct Broker: ₹75 Lakhs
Reinsurance Broker: ₹4 Crore
Composite Broker: ₹5 Crore

3. Net Worth Requirements:

Net worth based on the Companies Act 2013.
Direct Broker: ₹50 Lakhs
Reinsurance Broker (50% of the minimum capital)
Composite Broker (50% of the minimum capital)

4. Deposit Requirements:

Direct Broker: ₹10 Lakhs
Reinsurance/Composite Broker: 10% of minimum capital/contribution.

5. Infrastructure Requirements:

Adequate office space, equipment, trained personnel, and IT infrastructure.

6. Qualification:

At least two qualified individuals with relevant training.The principal officer must meet the necessary qualifications.

7. Purpose of Business:

The primary objective must be insurance brokering.

8. Professional Indemnity Insurance:

Maintain professional indemnity insurance throughout registration.

9. Application Process:

Apply online via the IRDAI portal.
Pay the required fees.
Direct Broker: ₹25,000
Reinsurance Broker: ₹50,000
Composite Broker: ₹75,000

10. Documents Required:

• Memorandum and Articles of Association
• Principal officer details
• Fit and Proper certification
• Infrastructure details
• Statutory auditors’ and bankers information

11. Certificate Validity:

Valid for three years from the issue date.

12. License Renewal:

• Apply for renewal 30 days before expiry.
• Late renewal fees apply after expiry.
• Renewal is not possible after 90 days of expiry.

13. Compliance and Conduct:

1. Adhere to IRDAI rules and regulations.
2. Handle client grievances promptly.
3. Maintain proper records and books of accounts.

14. Rejection:

Application may be rejected if requirements are not met.

15. Additional Registrations:

Apply for additional registrations after obtaining the initial broker’s license.

16. Further Information:

The authority i.e., IRDAI may request additional documents or information.

17. Compliance Reporting:

Submit a net worth certificate every six months.

18. Foreign Investment:

Foreign investors are allowed in insurance broker businesses.

19. Declaration:

Declare any disqualifications under the Act.

For complete and up-to-date information, please refer to the Insurance Regulatory and Development Authority of India (IRDAI) (Insurance Brokers) Regulations, 2018, available at www.irdai.gov.in.

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