Insurance Broker License: Everything you need to know

 Read this blog to know the finer points to become a licensed insurance agent by obtaining IRDA registration for insurance brokers.

Insurance policies are in high demand right now. The uncertainty that’s already so high in this world, got even higher because of the pandemic. It made people rush towards insurance policies and entrepreneurs rush towards the insurance broker license. It’s through this license, that insurance brokers emerge; they provide assistance to people to make the right choice. An insurance broker has the duty to:

1. Watch over the current insurance and reinsurance market.
2. providing people with making the right choice in the matter of choosing insurance policies.
3. Assisting in the repayment or premiums and much more.

But, getting the insurance broker certificate or  license isn’t that easy. There are many nuances that you must know beforehand before applying for it. Thus, through this article, we will provide you everything that you need to know about IRDA broker registration.

What is an Insurance broker?

First, let’s answer the most obvious question – what is the meaning of an insurance broker. In simple terms, a broker is someone with a lot of knowledge of insurance policies and the current industry. An insurance broker can either be a person or a company that implements the said knowledge to act as an intermediate between customers, insurance companies and reinsurance companies.

Based on the type of intermediary you want to become an insurance broker for, you have three choices.

What are the different types of insurance brokers?

To become a licensed insurance agent, you need to know what type of broker you want to become. For that, you have three choices:

1. Direct insurance broker: A direct insurance broker is an individual or an organization that acts as an intermediary between insurance companies and customers. It’s through them that customers most often buy insurance policies. A direct insurance broker’s duty is to:
   1. Providing customers advice in choosing the right insurance policy.
   2. Keeping an eye on the current insurance market.
   3. Assisting customers in registering their E insurance account.
2. Reinsurance brokers: Insurance companies act as customers in this case. To protect their financial stability, such companies reach out to reinsurers. Reinsurers are companies that provide risk management services to insurance companies in case the insurance amount and the risk associated with it is high. A reinsurance broker thus, acts as an intermediate between an insurance company and a reinsurance company. The duties of the one who has gotten insurance broker registration to become a reinsurance broker are as follows:
   1. Conducting research on the state of reinsurance market
   2. Helping solicit reinsurance product
   3. Negotiating on behalf of reinsurance companies
3. Composite Brokers: As the name suggests, composite insurance brokers are hybrids. They become insurance agent online in order to serve both the customers and the insurance companies.

What does it take to become eligible for Insurance Broker License in India?

To acquire the license, you need to be someone who can be more than just a company that can bear the insurance broker license cost, you need to have:

1. The right minimum paid up capital.
2. The right net worth.
3. Ability to pay the right deposit.

Additionally, you need to either a company, LLP or a cooperative society to apply for the license.

Minimum capital requirement:

1. Direct Brokers: INR 50 lakh
2. Composite Brokers: INR 4 Crores
3. Reinsurance brokers: INR 5 Crores

Net worth Requirement:

1. Direct Brokers: INR 50 lakh
2. Composite Brokers: 50 percent of minimum capital
3. Reinsurance brokers: 50 percent of minimum capital

Deposit requirement:

Deposit requirement comes to light when the applicant has to pay the insurance broker license cost to a scheduled bank. Following is the required deposit for the brokers:

1. Direct Brokers: INR 10 Lakh
2. Composite Brokers: 50 percent of minimum capital
3. Reinsurance brokers: 50 percent of minimum capital.

Along with having the business entity to conduct the insurance broker business and the right financial stability to support it, possessing insurance broker qualifications is also mandatory.

Procedure to obtain the Insurance Broker License

Following are the steps one is required to follow after fulfilling the insurance broker license requirements in order to obtain the license:

1. Complete the required qualification
2. File the application FORM B
3. Submit the required documentations
4. Assessment will be initiated by the IRDA
5. If the applicant has taken all the correct steps and possesses the correct qualifications, IRDA wastes no time issuing them the Insurance broker license.

License going to be expired ?  apply now for insurance broker license renewal

Documents required to obtain the Insurance broker license

Following are the documents that are part of the Insurance broker requirements to obtain the license:

1. Registration certification of the LLP, society or the company
2. MOA / Society Deed / LLP agreement that provides information regarding the applicant’s objective.
3. Details pertaining to the Principal Officer
4. Declaration that the applicant doesn’t come in the list of entities not allowed to apply for the license.
5. List of two insurance agents with the required qualification
6. List of shareholders
7. Bank Account details
8. Board resolution’s copy
9. Society’s, Company’s or LLP’s Balance sheet

Conclusion

Uncertainty has given rise to the need of insurance policies. As a license insurance agent, you can cater to that need. If you’re ready to move forward with the steps to obtain the insurance broker license, get in touch with us. Make the process easy and get the best results in the minimum time.

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Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.