{"id":11692,"date":"2022-08-27T08:59:01","date_gmt":"2022-08-27T08:59:01","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=11692"},"modified":"2022-08-27T09:01:58","modified_gmt":"2022-08-27T09:01:58","slug":"insurance-broker-license-in-india-process-fee-and-validity","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/insurance-broker-license-in-india-process-fee-and-validity\/","title":{"rendered":"Insurance Broker License in India: Process, Fee and Validity"},"content":{"rendered":"\n<p>Uncertainty over life and the\never-increasing medical service cost has made us realise the importance of\n&#8220;insurance&#8221;. Insurance brokers are people who curate insurance\npolicies keeping in mind the needs and wants of the customers. They act as a\nbridge between companies and their customers. In this blog, we shall find out\nthe process of obtaining an Insurance broker license. <\/p>\n\n\n\n<p>In India, all the aspects related to\ninsurance are governed by the Insurance Regulatory and Development Authority\nAct, 1999. IRDA released new guidelines in 2018 under IRDA (Insurance Broker)\nRegulations, 2018.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3a861687384\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3a861687384\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/insurance-broker-license-in-india-process-fee-and-validity\/#Classification_of_Insurance_Brokers\" title=\"Classification of Insurance Brokers:\">Classification of Insurance Brokers:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/insurance-broker-license-in-india-process-fee-and-validity\/#Minimum_Capital_Requirement_and_net_worth_for_Insurance_Broker_license\" title=\"Minimum Capital Requirement and net worth for Insurance\nBroker license \">Minimum Capital Requirement and net worth for Insurance\nBroker license <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/insurance-broker-license-in-india-process-fee-and-validity\/#Who_can_be_an_Insurance_Broker\" title=\"Who can be an Insurance Broker?\">Who can be an Insurance Broker?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/insurance-broker-license-in-india-process-fee-and-validity\/#What_are_the_documents_required_for_Insurance_Broker_License\" title=\"What are the documents required for Insurance Broker\nLicense?\">What are the documents required for Insurance Broker\nLicense?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/blog\/insurance-broker-license-in-india-process-fee-and-validity\/#What_is_the_procedure_to_obtain_Insurance_Broker_License\" title=\"What is the procedure to obtain Insurance Broker License?\">What is the procedure to obtain Insurance Broker License?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/blog\/insurance-broker-license-in-india-process-fee-and-validity\/#What_happens_if_the_application_from_the_insurance_broker_is_rejected\" title=\"What happens if the application from the insurance broker\nis rejected?\">What happens if the application from the insurance broker\nis rejected?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/blog\/insurance-broker-license-in-india-process-fee-and-validity\/#What_is_the_validity_of_an_Insurance_broker_License\" title=\"What is the validity of an Insurance broker License?\">What is the validity of an Insurance broker License?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/blog\/insurance-broker-license-in-india-process-fee-and-validity\/#Conclusion\" title=\"Conclusion:\">Conclusion:<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Classification_of_Insurance_Brokers\"><\/span>Classification of Insurance Brokers:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Insurance brokers can be classified into\nthree categories; these are:<\/p>\n\n\n\n<ul><li><strong>Direct Brokers<\/strong><\/li><\/ul>\n\n\n\n<p>Direct brokers\nare entities licensed by the IRDAI, these entities do an in-depth analysis of\nthe needs of several customers. Then later inform about their needs to an\ninsurance company. Direct brokers usually provide advisory services to their\nclients and help them select the most appropriate policy keeping in mind terms\nand conditions. Direct brokers act as per the directions provided by their\nclients. They have extensive information about the insurance sector and help\nclients settle their claims.<\/p>\n\n\n\n<ul><li><strong>Reinsurance Brokers<\/strong><\/li><\/ul>\n\n\n\n<p>Reinsurance\nbrokers are insurers for insurance companies. The reinsurance brokers act as an\nintermediary for reinsurance contracts between direct insurance and reinsurers.\nA Reinsurance broker works for both parties; in such cases, he cannot keep in\none party&#8217;s interest over the other. They try to find a consensus that is best\nfor both the clients that they are representing.<\/p>\n\n\n\n<ul><li><strong>Composite Brokers<\/strong><\/li><\/ul>\n\n\n\n<p>Composite\nbrokers are a combination of both the direct broker and reinsurance brokers.\nThey have both types of clientele, ones which want to cater to consumers and\nothers where both clients are insurance companies.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Minimum_Capital_Requirement_and_net_worth_for_Insurance_Broker_license\"><\/span>Minimum Capital Requirement and net worth for Insurance\nBroker license <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td>\n  <strong>S.no<\/strong>\n  <\/td><td>\n  <strong>Type <\/strong>\n  <\/td><td>\n  <strong>Minimum capital\n  Requirement<\/strong>\n  <\/td><td>\n  <strong>Maintenance of a net\n  worth<\/strong>\n  <\/td><\/tr><tr><td>\n  1\n  <\/td><td>\n  Direct Brokers\n  &nbsp;\n  <\/td><td>\n  75 lakhs\n  <\/td><td>\n  50 lakh\n  <\/td><\/tr><tr><td>\n  2\n  <\/td><td>\n  Reinsurance Brokers\n  &nbsp;\n  <\/td><td>\n  Rs. 4 crore\n  <\/td><td>\n  50% of the minimum capital requirement.\n  <\/td><\/tr><tr><td>\n  3\n  <\/td><td>\n  Composite Brokers\n  &nbsp;\n  <\/td><td>\n  Rs. 5 crore\n  <\/td><td>\n  50 percent of the minimum capital requirement.\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_can_be_an_Insurance_Broker\"><\/span>Who can be an Insurance Broker?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>A partnership business that is registered under <strong>the Limited liability Partnership Act, 2008<\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/The_Limited_Liability_Partnership_Act,_2008\" class=\"text-primary\"><strong>[1]<\/strong><\/a><\/sup><\/li><li>A company formed as per the provisions of the Companies Act, 2013<\/li><li>Any Co-operative society that is established as per the rules laid down in the Co-operative Societies Act, 1912 or similar law.<\/li><li>Any other individual permitted by the IRDAI to work as an insurance broker.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_documents_required_for_Insurance_Broker_License\"><\/span>What are the documents required for Insurance Broker\nLicense?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Must  disclose all the information as needed by the Form-Bschedule1 of the  regulations<\/li><li>Copy of  Memorandum of Association and Articles of Association.<\/li><li>Payment of application fee as per the category the broker is applying for.<\/li><li>Fit and proper Declaration according to the For G of Schedule 1. <\/li><li>Documents specifying the details of Directors, partners, promoters and other Key management personnel.<\/li><li>Form F- stating the qualification of the people involved in managing the business.<\/li><li>Documents  mentioning broker&#8217;s bank account details, statutory auditors and principal  bankers<\/li><li>Form G of  schedule-1 which contains &#8216;Fit and proper certification.<\/li><li>All the details of the infrastructure being utilised by the broker.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_procedure_to_obtain_Insurance_Broker_License\"><\/span>What is the procedure to obtain Insurance Broker License?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>The applicant must make an application according to Schedule 1- Form B of the regulations.<\/li><li>The application must also state the type of broker the applicant wants to register as.<\/li><li>The  applicant must also furnish all the documents that are required under Form C- of Schedule 1<\/li><\/ul>\n\n\n\n<ul><li>If the above-mentioned process are completed and all the documents are submitted as specified in the rules, then the In-principal approval shall be granted to the applicant.<\/li><li>How the final registration certificate shall be issued when additional compliances are met. This shall be issued in Form J of Schedule 1<\/li><\/ul>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td>\n  <strong>Particulars<\/strong>\n  <\/td><td>\n  <strong>Application Fee<\/strong>\n  <\/td><td>\n  <strong>After the receipt of\n  In-principal Approval<\/strong>\n  <\/td><td>\n  <strong>For Renewal<\/strong>\n  <\/td><\/tr><tr><td>\n  Direct Broker\n  <\/td><td>\n  \u20b9 25,000\n  <\/td><td>\n  \u20b9 50,000\n  <\/td><td>\n  \u20b9 1,00,000\n  <\/td><\/tr><tr><td>\n  Reinsurance Broker\n  <\/td><td>\n  \u20b9 50,000\n  <\/td><td>\n  \u20b9 1,50,000\n  <\/td><td>\n  \u20b9 3,00,000\n  <\/td><\/tr><tr><td>\n  Composite Broker\n  <\/td><td>\n  \u20b9 75,000\n  <\/td><td>\n  \u20b9 2,50,000\n  <\/td><td>\n  \u20b9 5,00,000\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_happens_if_the_application_from_the_insurance_broker_is_rejected\"><\/span>What happens if the application from the insurance broker\nis rejected?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In cases where discrepancies are found in\nthe applicant&#8217;s form or documents, then the application shall stand rejected.\nHowever, the authority must communicate such rejection to the applicant within\na period of 30 days. The applicant can re-apply after the expiration of 1 year\nof such rejection.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_validity_of_an_Insurance_broker_License\"><\/span>What is the validity of an Insurance broker License?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The insurance broker license is valid for\nup to a period of three years. The license holder must apply for a new license\none month before the expiration of the license. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion:<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p> In order to operate as an <strong><a href=\"https:\/\/swaritadvisors.com\/insurance-broker-license\" class=\"text-primary\">insurance broker in India<\/a><\/strong>, a person must obtain the insurance broker license as per the norms set by IRDA. The license can be obtained by maintaining the required capital and submitting the application form along with documents and requisite fees. This license shall be valid for a period of three years. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Uncertainty over life and the ever-increasing medical service cost has made us realise the importance of &#8220;insurance&#8221;. Insurance brokers are people who curate insurance policies keeping in mind the needs and wants of the customers. They act as a bridge between companies and their customers. In this blog, we shall find out the process of [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":11693,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[44],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/11692"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=11692"}],"version-history":[{"count":3,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/11692\/revisions"}],"predecessor-version":[{"id":11696,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/11692\/revisions\/11696"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/11693"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=11692"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=11692"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=11692"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}