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Insurance Company Registration Procedure – An Overview

Insurance Company Registration Procedure - An Overview
| Updated: Apr 29, 2021 | Category: IRDA Advisory

An insurance company or an insurance marketing company is a registered company by the IRDAI (Insurance Regulatory and Development Authority of India). In 2015, the IRDAI developed the idea of companies that could deliver insurance products or policies along with registered permission to undertake insurance-related services and offer financial products to the general public. This Act was entitled as the IRDAI Registration of Insurance Marketing Firm Act, 2015. Entities that would register under this Act were granted permission to ask for insurance products & obtain and deliver insurance-related activities.

Every insurer seeking to execute the insurance business in India is needed to obtain a registration certificate from the IRDAI before the beginning of a business. The pre-conditions for applying for Insurance Company Registration have been set out under the Insurance Act and the various regulations authorized by the authority. Scroll down to check more information regarding the Insurance Company Registration procedure.

What are the Basic Requirements for Insurance Company Registration Procedure?

After the execution of the IRDAI Registration of Insurance Marketing Firm Act, 2015[1], the Government of India has made it very simple and clear that no individual or entity shall deal in insurance products or services without obtaining Insurance Company Registration with the IRDAI. Those who were offering such products before the incorporation of such Act also required to abide by the guidelines and procuring registration like any company or entity within a time limit of three months from the date of the beginning of the Act.

Eligibility Criteria for Insurance Company Registration Procedure in India

Following is the eligibility criteria that should be fulfilled for the Insurance Company Registration Procedure in India:

  1. Any entity or a company that comes under the following categories can apply for the registration:
  2. A Cooperative Society;
  3. A company recognized by the Insurance Regulatory and Development Authority of India (IRDAI);
  4. An LLP (Limited Liability Partnership);
  5. An insurance provider before the beginning of the Act can also apply, although it must be remembered that the holdings by a foreign country in paid-up capital, if any is a maximum of 26% only;
  6. The company must have a minimum net worth of Rs. 10 lakhs.
  7. Have adequate infrastructure, skilled workforce, and equipment.
  8. The registered name during the incorporation, if an LLP is applying, must include the phrase “Insurance Marketing Firm” in it.

Once such basic criteria are taken care of the standard operating Insurance Company Registration procedure as prescribed by the IRDAI can commence. The Government of India has kept the Insurance Company Registration procedure divided into three subcategories which are R1, R2, and R3, as per the Insurance Act, 1938.

Application for Insurance Company Registration

The application for the Insurance Company Registration procedure will contain the extra information, and you can check the same below:

  • Application Reinsurance Company: Evidence saying that settled-up value capital is more than Rs. 200 crores or more;
  • Application for Life Insurance or Health Insurance or General Insurance: Evidence saying that settled-up a value capital is more than Rs. 100 crores or more;
  • Copy of published record;
  • An affidavit delivered by the Indian and Foreign Promoters validating that the paid-up equity capital is adequate after excluding preliminary expenses;
  •  Authentication of expenses of Rs. 5 lakhs, which is non-refundable;
  • Expression of shareholding consisting of the different number of shares given to promoters;
  • Copy of MOU or any agreement entered between the promoters such as shareholding agreement or voting agreement or management or any other agreement;
  • PCA or PCS Certificate confirming the consistency of registration charges; the value of share capital, other Act’s demand;
  • CEO, MD, and WTD of foreign and Indian investors showing that the holding of distant paid-up capital is being considered as referenced under Indian Insurance Companies (Foreign Investment) Rules, 2015 read with several principles recognized with it;
  • Approval of FIPB if the FDI surpassed the limitation of 26%.

The authority stands on acquiring the application will take into nature’s idea of insurance products, bookkeeping, auditor and other expert authorities in the administration, the association structure. The authority will give the registration certificate to the applicant in the Form IRDAI/R3 after conducting an inspection and feeling pleased.

The authority will be carried out to the applicant within thirty days from the date of refusal to go with the ground of refusal. An applicant can talk to SAT within thirty days of dismissal order receipt. The applicant who received the certificate of registration of the Insurance Company License should commence their business within twelve months of getting a certificate of insurance company registration.

What is the Insurance Company Registration Procedure in India?

Any applicant who wants to operate insurance-related activities in India need to obtain a registration certificate from the IRDAI, and for that, you need to follow the given steps to complete the Insurance Company Registration procedure:

  1. First, the applicant requires filing an application to the IRDAI, presenting the craving to procure a registration certificate for an insurance marketing company, which requires an individual or a company to fill the Form IRDAI/R1.
  2. Once you correctly filed the application form for the registration and submitted it to the respected authority, then they will inspect the application, and if needed, the applicant is called for a clarification of details or information provided by the applicant. The applicant may file the application for exclusive products such as vehicle insurance, life insurance, health insurance, etc. It is on the applicant’s determination.
  3. Once the application for the registration of an insurance company has been inspected by the authority, it is up to the authority to accept or reject the application. If the applicant satisfied all the requirements and the basic criteria, then the authority may grant consent for filing the further application. This can be done by filling the Form IRDAI/R2, and it becomes the request application from the applicant for attaining the Certificate of Registration from the IRDAI. Such application will cover details like:
  4. Application Reinsurance Company: Evidence saying that settled-up value capital is more than Rs. 200 crores or more;
  5. Application for Life Insurance or Health Insurance or General Insurance: Evidence saying that settled-up a value capital is more than Rs. 100 crores or more;
  6. Copy of published record;
  7. An affidavit provided by the Indian and Foreign Promoters validating that the paid-up equity capital is adequate after excluding preliminary expenses.
  8. Once the aforementioned criteria are satisfied and the Form IRDAI/R2 duly filled, the authority calculated the Form and, on complete satisfactory, provides certification in IRDAI/R3.
  9. Once the applicant obtains the certificate of registration for an insurance company from the IRDAI, it requires commencing the business within 12 months of time. In present cases, the authorities do grant extensions; but, this can be taken for 24 months of time. After this, the registration obtained shall expire.
  10. In case the authority is not fully satisfied or fulfilled with either the information or the documentation given by the applicant, the prescribed authority may refuse the application for the Insurance Company Registration. If the application for the registration has been rejected, then it will be informed to the applicant within 30 days from the date of refusal. The applicant can appeal to the authorities for the same within 30 days from the date of receiving the orders.

Conclusion

It is clear that if anyone wants to start an insurance-related business in India, they must obtain an insurance company license. But for that, the applicant must know all the criteria, documents and procedure for Insurance Company Registration. The pre-conditions for applying for Insurance Company Registration have been set out under the Insurance Act and the various regulations authorized by the authority.

Also, Read: Insurance (Amendment) Act 2021: A Complete Guide

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A legal writing enthusiast, a wanderer, and a zealous reader. After gaining a lot of knowledge about the diverse legal topics and developing research skills, Karan joined the league of legal content writers to deliver quality-rich blogs.

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