How to Become a Life Insurance Agent in India?

A life insurance agent is a person who only sells life insurance policies. By becoming a life insurance agent you can sell a different product that comes under life insurance such as endowment plans, ULIP, retirement plans, money-back plans, etc. To sell these policies legally, you need an IRDAI license. 

To obtain a certificate of Registration as an Indian Insurance company, the applicant has to complete three stages. Also, remember you can sell only the products of a registered insurance company. In this article, each stage is explained in detail, check the stage-wise procedure with the required documents below.

Registration Stage 1 (R1 Stage)

The application that you filed for registration will be checked on certain requirements which are stated in Sub Regulation 7 of the IRDA Regulations, 2016. These regulations are as follows:

1. Documents Required with Application

The nodal department checks the application and documents submitted in stage 1. In this stage, you required the following documents:

• Copy of Memorandum of Association and Articles of Association.
• Certified copy of the Act of Parliament.
• The name, address and occupation of the director.
• Certified copy of the annual report of Indian promoters and Foreign Investors for the last five years.
• Certified copy of the shareholders’ agreement between Indian Promoters and Foreign Investors.
• Projection of business for 5 years duly approved by the Board of Directors of the applicant.
• General track record of conduct and performance of each of the Indian Promoters and Foreign Investors.
• Record of conduct and performance of the directors and persons in management of the Indian Promoters, Foreign Investors and the applicant.
• Capital structure of the applicant.
• Ability to meet the obligation to provide life insurance to persons residing in the rural sector, workers in the unorganized sector, informal sector or economically vulnerable or backward classes of the society. With the collaboration with the IRDAI registered insurance company, you can help these persons.
• Ability to meet the obligation to underwrite insurance business in third-party risks of motor vehicles as specified by the Authority in respect of general insurance companies.
• The planned infrastructure of the applicant.
• Proposed business expansion plan for five succeeding years.

Other relevant matters for carrying out the provisions of the Act.

2. Review of Application

In the process, IRDAI can raise queries and seek clarifications/documents, if required. The submitted application review from all the perspectives financial, investment, corporate governance, solvency, actuarial, etc. So, after getting approvals from all the boards, the R1 application sent to the Board for further approval.

3. Application Submitted to Board for Approval

When the authority is satisfied with the information submitted by the applicant and the verification of R1 is complete with all the documents. Then, they can carry on all the functions in respect of the insurance business, including the management of investments within India. They accept the requisition and issue the application for registration to the applicant.

4. Clearance Letter

However, after the board's approval, the R1 clearance letter will be issued to the applicant. Some conditions can be advised to them to make their compliance or file an R2 application on time.

Registration Stage 2 (R2 Stage)

The R2 must be filed by the applicant as per the IRDAI Regulations, 2016 in the 17th Amendment. (Registration of Indian Insurance Companies). So, the R2 application must include the following documents if the Indian promoters are Limited Liability Partnership, such affidavit must be signed by a Designated Partner:

• Proof of having Rs. one hundred crores or more paid-up equity share capital.
• A statement that shows the number of shares issued to each Indian promoter and investor as per the share capital.
• A certified copy of the published prospectus (if any)
• A certified copy of the standard forms of the insurer and statements of the assured rates, advantages, terms and conditions.
• A certified copy of the Memorandum of Understanding or Management Agreement Shareholders Agreement Voting Rights Agreement or any other agreement form between the Indian promoters and the foreign investors.
• Proof in support of payment of the non-refundable fee of Rs. 5 lakh.
• A certificate from a practising chartered accountant or a company secretary certifying that all the requirements are complied with by the applicant.
• Any other information required by the Authority.

Areas Checked During Application Examination

During the review of the application, the following areas will examine by the authority:

• The nature of insurance products.
• The level of actuarial, accounting and other professional expertise within the management of the applicant company.
• The organisation structure of the applicant to carry on all functions of the insurance business includes management of the investments within its organisations.
• All other matters for carrying out the provisions of the act.

Review of R2 Application

The IRDAI can raise queries and ask for clarifications or documents if they are required. However, the departments will check the application and submission from all angles. So, after getting satisfactory approval from different departments, the R2 application is taken to the Board for approval for the IRDAI license.

Clearance Letter

After the approval of the board, the R2 clearance letter is issued to the applicant. However, the departments will provide some advice to make their compliance accordingly for issuance of Certificate of Registration (R3).

Registration Stage 3 (R3 Stage)

In this stage, the applicant will apply to comply with the conditions of R2 and request the authority for issuance of Certificate of Registration R3. The IRDAI examines the R3 request along with the following:

• Eligibility of the applicant, and it must meet the obligations imposed under the Act.
• The financial conditions of the promoters, foreign investors and the general character of the management.
• The capital structure and earning prospects.
• The applicant has complied with the provisions of sections 2C, 5, 31A and 32A of the Act and has fulfilled all the requirements of these sections applicable to it.

Certificate of Registration

If after the examination, the IRDAI finds the R3 stage satisfactory, then it issues the Certificate of Registration. Similarly, the chairman has the power to issue CoR. The IRDAI take all the specific issues related to the requirements or examinations before issuing an IRDAI license (Certificate of Registration).

Conclusion

To conclude, in the process of becoming a life insurance agent, you need an IRDAI license. For that you have to go through three stages, in each stage, there are several documents, applications and guidelines that should follow by the applicant. If you are looking to become a life insurance agent and want to sell the IRDAI registered insurance company, then reach out to Registrationwala. We assist you in every step to obtain a Certificate of Registration from IRDAI.

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.