How to Get Insurance Broker License
Insurance brokers have long remained a savior for various insurance companies struggling with sales and market presence. They play a key role in filling the gaps between insurance companies and potential clients. On one hand, they serve struggling insurers to cope with market competition, on the other hand, they help insurance-seekers to pick ideal policies as per their needs. In a nutshell, brokers offer invaluable services, benefiting both companies and clients. If you or your firm want to serve the role of a broker, ascertaining how to get an insurance broker license is paramount. The article takes a deep dive into how to get insurance broker license and unfolds vital information.
Who Are Insurance Brokers And Their Types?
Before we explain how to get insurance broker license, it is important to know who is an insurance broker, what role it serves, and what are their different types.
Insurance brokers provide their services to insurer clients, helping them sell and tailor existing policies as per the demand. They also act as the company’s face when it comes to insurance selling. They help potential insurance-seekers select ideal policies, understand coverage terms, and grasp intricate matters.
They fall under the Insurance Regulatory and Development Authority of India (Insurance Brokers) Regulations, 2018, and are categorized as follows:
Direct Brokers
Direct Brokers work with individual clients or businesses to arrange insurance coverage. They fall under the IRDAI and are required to meet specific capital requirements.
Reinsurance Brokers
Reinsurance Brokers facilitate reinsurance transactions between insurance companies and reinsurance companies. They must have extensive acumen and experience with the required higher capital to apply for a reinsurance broker license.
Composite Brokers
Composite Brokers offer both direct insurance and reinsurance services to their clients. They must be licensed for both types of services, meet higher capital requirements, and possess comprehensive industry knowledge.
Eligibility Criteria for Insurance Broker License
Before rushing into the process concerning how to get insurance broker license, it is vital to ascertain the eligibility criteria as shown below:
| Criteria | Details |
| Registration with IRDAI | Must be registered with the Insurance Regulatory and Development Authority of India (IRDAI). |
| Application Submission | The application needs to be submitted online via the IRDAI portal. |
| Eligible Entities | Only entities that comply with current legislation are eligible to apply for a broker license. |
| Minimum Capital Requirements | Direct Broker: INR 75 Lakhs. Reinsurance Broker: INR 4 Crores. Composite Broker: INR 5 Crores. |
| Net Worth Requirements | Direct Broker: INR 50 Lakhs. Reinsurance Broker: 50% of capital requirements. Composite Broker: 50% of capital requirements. |
| Deposit Requirements | Direct Broker: INR 10 Lakhs. Reinsurance/Composite Broker: 10% of the minimum capital requirements. |
| Office Space and Facilities | Must have sufficient office space, equipment, trained personnel, and IT infrastructure. |
| Qualified Persons | At least two individuals must have the necessary qualifications and training. |
| Principal Officer | The Principal Officer should possess the required qualifications and experience. |
| Professional Indemnity Insurance | Professional indemnity insurance must be maintained for the duration of the registration certificate. |
Paperwork Consideration for Insurance Broker License
Documents play a key role when delving into how to get an insurance broker license. You must keep the following dossiers handy before registration.
- Infrastructure details with supporting evidence
- Principal Officer’s data (Schedule I- Form F)
- Copy of Memorandum and Articles of Association
- Training details for employees
- Fit and Proper certification (Schedule I- Form G)
- Statutory auditors’ and principal bankers’ details
- Fee remittance receipt
- Details of Directors, Partners, and Key Management Personnel
Understanding Fees, Validity, Capital, Networth, and Renewal
Keeping given numbers in mind is vital while delving into how to get insurance broker license. Doing so will simplify the registration quest and let you stay atop uncertainties:
| Category | Direct Broker (Life) | Direct Broker (General) | Direct Broker (Life & General) | Reinsurance Broker | Composite Broker |
| Capital Requirement | INR75 Lacs | INR75 Lacs | INR75 Lacs | INR4 Crore | INR5 Crore |
| Net Worth Requirement | INR50 Lacs | INR50 Lacs | INR50 Lacs | INR2 Crore | INR2.5 Crore |
| Deposit Requirement | INR10 Lacs | INR10 Lacs | INR10 Lacs | 10% of the minimum capital requirement | 10% of the minimum capital requirement |
| Fees for New Registration | INR25,000 | INR25,000 | INR25,000 | INR50,000 | INR75,000 |
| Fees After In-principal Approval | INR50,000 (New), INR1,00,000 (Renewal for 3 years) | INR50,000 (New), INR1,00,000 (Renewal for 3 years) | INR50,000 (New), INR1,00,000 (Renewal for 3 years) | INR1,50,000 (New), INR3,00,000 (Renewal for 3 years) | INR2,50,000 (New), INR5,00,000 (Renewal for 3 years) |
| Professional Indemnity Insurance | Required, to be maintained at all times during the validity of the Certificate of Registration. | Same as Direct Broker (Life) | Same as Direct Broker (Life) | Required, to be maintained at all times during the validity of the Certificate of Registration. | Required, to be maintained at all times during the validity of the Certificate of Registration. |
| Validity of Certificate | 3 years | 3 years | 3 years | 3 years | 3 years |
| Application for Renewal | Form K, 30 days before expiry, INR 100/- if late but before expiry, INR 750/- if within 60 days after expiry | Same as Direct Broker (Life) | Same as Direct Broker (Life) | Form K, 30 days before expiry, INR 100/- if late but before expiry, INR 750/- if within 60 days after expiry | Form K, 30 days before expiry, INR 100/- if late but before expiry, INR 750/- if within 60 days after expiry |
Online Process Concerning How to Get an Insurance Broker License
- Access the IRDAI portal and log in. If you are a new user, create an account with valid information.
- After creating your account, log in and go to the application section to locate Form B.
- Open Form B and fill it out with relevant information about the company, including net worth, capital, directors, partners, and other required details.
- After completing the form, upload the necessary documents in the specified format.
- Pay the applicable fee as advised.
- Once completed, the form will be forwarded to the respective IRDAI department for review. The review process may take a few days, depending on the type of license and compliance requirements.
- After thorough due diligence, the IRDAI will grant the license, provided no errors or discrepancies are found during the review.
Conclusion
Knowing how to get insurance broker license and related legalities will keep you atop process complications, leading to a hassle-free registration. Please note that IRDAI has penned down some stiff regulations concerning brokers’ registration and their functions. Thus, any non-compliance, regardless of gravity or nature, can incur harsh penalties, involving monetary fines and closure of business. So be mindful of operational norms to stay afloat and compliant.
You can also connect with a seasoned firm like Adviso, committed to ensuring client satisfaction via a splendid portfolio of services, such as global incorporation, NBFC takeover, IRDAI approvals, etc. If you wish to secure a broker license in one go, look no further than Adviso, where compliance meets excellence.
Read Our Article: A Comprehensive Guide To Life Insurance Broker License
