Types of Insurance Brokers in India

Insurance Broker License

Types of Insurance Brokers in India

As per the Insurance Brokers regulations issued by the IRDAI (Insurance Regulatory and Development Authority of India in 2018, an Insurance Broker is defined as a business entity that implements their skills and knowledge about the insurance industry and acts as an intermediary between the seeking insurance policy seeking clients and insurance companies, to become an insurance broker, you must have a license to operate in the insurance market.

An insurance Broker License or IBL is formally defined as the legal approval issued by the IRDAI, which formulates laws for any business entity to become an insurance broker in India. These laws bound the applicant after obtaining the IBL for insurance solicitation and procurement.

Who can be an Insurance Broker in India?

An Insurance Brokerage Firm must contain the terms' Insurance Broker',' Insurance Brokers', or 'Insurance Broking' in its registered name. The words reflect their line of activity and enable the public to differentiate insurance brokers registered with the Insurance Regulatory and Development Authority of India (IRDAI) from other non-registered insurance-related entities.

Types of Insurance Brokers

There are three categories of insurance brokers mentioned below: 

Direct Insurance Broker 

A direct broker is a type of Insurance Broker registered under the IRDAI who solicits and arranges insurance business for its clients with insurers located in India or provides claim consultancy, Risk Management services, or other similar services as permitted under the IRDAI (Insurance Brokers) Regulations of 2018 for remuneration or a fee. 

Duties of a Direct Insurance Broker (DIB)

According to the IRDAI regulations, Direct Insurance Brokers can be further classified into three categories:

Reinsurance Broker

A reinsurance broker is a type of insurance Broker registered under the Authority who solicits and arranges reinsurance for its clients with insurers or reinsurers with reinsurers or insurers located in India or abroad; and/or provides claims consultancy, Risk Management services, or other similar services as permitted under IRDAI (Insurance Brokers) Regulations of 2018 for remuneration and/or a fee. 

Duties of a Reinsurance Broker (RB)

Composite Broker 

A composite broker is a type of insurance broker, registered under the Authority, who solicits and arranges the Insurance and/or reinsurance for its clients with insurers and/or reinsurers located in India and/or abroad; and/or provides claims consultancy, Risk Management services or other similar services as permitted under IRDAI (Insurance Brokers) Regulations of 2018 for remuneration and/or a fee. 

Duties of a Composite Broker (CB)

A composite broker can carry out any of the duties mentioned in the direct broker or the reinsurance broker dutied list above.

To know more about the type of Insurance Broker licenses in India, connect with the IRDAI experts at Registrationwala.

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