How to Start a Insurance Company Registration

service package

An Overview of Insurance Company Registration

In the last few years, the market of Indian Insurance has observed fabulous growth and expecting noteworthy growth in the future. In India, every insurer who wants to carry out the insurance business is required to obtain a certificate of Insurance Company Registration from the IRDAI (Insurance Regulatory and Development Authority) before starting the business of Insurance. The prior conditions for applying for Insurance Company Registration have been set out under the Insurance Act, 1938 and the certain regulations prescribed by the Authority.

A license of an Insurance Company gives the person the Authority to sell and search for insurance products or items. State Insurance Commissioner is liable for the issuance of the Insurance Company License to sell and search the Insurance and is isolated into different types of Insurance consisting life, health, vehicle or compensation of workers. For someone living in one state and selling Insurance in neighbouring states requires a license for each precise state. You don't have to subsidise with a registered office to get the Insurance Company License, but this is essential once you plan to work together.

Prior to 1999, the Insurance Controller managed the sector of Insurance of our nation under the Insurance Act, 1938. However, the foundation of IRDA has brought an essential change in such a sector. Improvement of IRDAI caused individuals to feel the requirement of renewal in the ground of the Insurance Company License. It is mandatory for all origins to achieve a certificate of Insurance Company Registration from the Authority before applying for any license for an Insurance Company. The permit to be obtained for various classes of Insurance can be attained from the IRDAI.

Basic Necessities for Insurance Company Registration

After the execution of the IRDAI Registration of Insurance Marketing Firm Act, 2015, the Government of India has made it very simple and clear that no company or individual shall deal in the products or services of Insurance without acquiring registration with the IRDAI (Insurance Regulatory and Development Authority). Those who were providing products before the registration of this Insurance Marketing Firm Act also need to stand by the guidelines and obtain registration like any new company within three months from the date of the starting of the Act.

What is the Eligibility Criteria for Insurance Company Registration?

Following is the eligibility criteria for Insurance Company Registration in India:

1. Any company which comes under the following categories is eligible to apply for Insurance Company Registration:

  • A Cooperative Society:
  • An LLP (Limited Liability Partnership);
  • A Company is known by the IRDAI:
  • Before the beginning of the Act, the insurance provider may also apply, although it must be noted that the holdings by the foreign company in paid-up capital, if any, is a maximum of 26%.

2. The company must have at least Rs. 10 lakhs of net-worth;

3. At the time of registration, the registered name of an LLP should contain the phrase “Insurance Marketing Firm” in it;

4. Have satisfactory infrastructure, equipment, and trained human resources.

Once such criteria are taken care to obtain registration of an insurance company as set by the IRDAI can initiate. The Government has kept the process of registration divided into three different subcategories: R1, R2, and R3 as per the Insurance Act, 1938.

Essential Documents Required for Insurance Company Registration

An applicant who desires to obtain an Insurance Company License needs to file an application to the In Form IRDAI/RI for issuance of demand for the application. Below is the list of all the vital documents required for the registration:

  • Submit a copy of MOA (Memorandum of Association) and AOA (Article of Association);
  • Incorporation certificate of a company established under the Companies Act, 2013;
  • Submit all the director's details like; the name of the directors, full address of the directors and occupation;
  • Business Plan of next five years by the BODs (Board of Directors);
  • Submit a copy of the shareholding agreement between Foreign Investors & Indian Promoters of the applicant;
  • Submit a certified copy of the yearly report of Foreign Investors & Indian Promoters for the previous five years.

Application for Insurance Company Registration

The application will include the additional data:

  • Application for Health/Life/General Insurance: Evidence stating that settled up a value capital is more than Rs. 100 crore or more;
  • Application for Reinsurance: Proof stating that settled up value capital is more than Rs. 200 crores or more;
  • An affidavit provided by the Foreign and Indian Promoters confirming that the paid-up equity capital is enough after excluding preliminary expenses;
  • Articulation of shareholding including the distinct number of shares given to promoters;
  • FIPB consent if the FDI exceeds the restriction of 26%;
  • Copy of published catalogue;
  • PCS or PCA Certificate confirming the consistency of registration charges, the value of share capital, other demands of the Act;
  • Confirmation of expenses of Rs. 5 lakhs, which is non-refundable;
  • WTD, MD, and CEO of Indian and foreign investors declaring that the holding of remote paid-up capital is being considered as referenced under Indian Insurance Companies (Foreign Investment) Rules, 2015 read with various principles recognised with it;
  • Copy of MOU or any agreement entered between the promoters like voting agreement or shareholding or management or any other type of agreement.

The Authority gets up on getting the application will take into nature's thought of insurance items, the level of bookkeeping, actuarial, 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 examination and feeling satisfied.

The Authority will be carried out to the applicant within 30 days from the date of rejection went with the ground of rejection. An applicant can speak to SAT within 30 days of dismissal order receipt. The applicant who received the registration certificate of Insurance Company License must begin their business within 12 months of getting a certificate of Insurance Company Registration.

What is Procedure for Insurance Company Registration?

Any individual who wants to carry out insurance-related activities in India require to obtain a registration certificate from the IRDAU by following steps:

1. First, the applicant needs to file an application for the registration to the IRDAI, presenting the desire to obtain a registration certificate for an insurance marketing firm, which requires a company or an individual to fill the Form IRDAI/R1. This Form is supported by the above-mentioned documents.

2. Once you filed the application and submitted it to the Authority, then they will examine the application, and if required, the applicant is called for an explanation of details provided by him. The applicant may file an application for exclusive products in life insurance, general insurance, vehicle insurance or health insurance. It's on the applicant's will.

3. Once the application for the Insurance Company Registration has been examined by the Authority, it is up to them to reject or accept the application for the same. If the applicant fulfils all the requirements and archives the basic criteria, the Authority may grant approval for filing in the further application. This can be done by filing Form IRDAI/R2, and it becomes the request application from the applicant for obtaining a Registration Certificate from the IRDAI. This application will cover information such as:

  • Application for Health/Life/General Insurance: Evidence stating that settled up a value capital is more than Rs. 100 crores or more;
  • Application for Reinsurance: Proof stating that settled up value capital is more than Rs. 200 crores or more;
  • An affidavit provided by the Foreign and Indian Promoters confirming that the paid-up equity capital is enough after excluding preliminary expenses;

4. Once the above-mentioned criteria are fulfilled and IRDAI/R2 duly filled, the Authority estimated the Form and on complete satisfactory provides certification in IRDAI/R3.

Once the applicant obtains the certificate of Insurance Company Registration from the IRDAI, it requires to start the business within 12 months of time. In exciting cases, the authorities do grant extensions; however, this can be taken for a maximum of 24 months of time. After this, the registration obtained shall expire.

In case the Authority is not completely satisfied with either the documentation or the information given by the applicant, the prescribed Authority may reject the application for the registration. If the application has been rejected, then it will be informed to the applicant with 30 days or a month from the date of rejection. The applicant can appeal to the authorities for the same within 30 days from the date of receiving the orders.

Suspension of Insurance Company License

  • Neglects to imitate the arrangements of the activities identified with the approximation of liabilities and benefits;
  • Any case stays unpaid for over three months after the decision is passed in court;
  • Neglects to pay the annual charges determined under Act;
  • The insurer is in the insolvency or is declared as wiped out;
  • A class of matter or the business of the guarantor has been moved to any individual or has been moved to or combined with the matter of some other safety net provider without the consent of the Authority;
  • Default in consenting to the provisions of the Act, or direction or rules & regulations or order gave by the Authority;
  • The insurer conveys business other than the suggested business or insurance business.

What are the Conditions in which an applicant is not authorised to file an application under IRDAI/R1?

  • If the Authority has rejected your registration request;
  • If the Indian or Foreign investors have decided to leave the project for some reason;
  • The time during the earlier two Financial Years from the date of requisition for the application of Insurance Company Registration;
  • If regulating Authority has abandoned your Registration Certificate;
  • The Authority has discharged the registration application or pulled back by the applicant under any circumstances whenever during the earlier two Financial Years from the date of order for application;
  • In case the name of an applicant does not include the word “Assurance” or “Insurance”.

Frequently Asked Questions

According to the Indian Insurance Act, 1934, any company that provides insurance items, services or other monetary products and obeys the guidelines of IRDAI is an Insurance Company.

IRDAI (Insurance Regulatory and Development Authority of India) regulates insurance companies in India, and it was established in 1999.

If a new company wants to establish itself as an Insurance Company, it will not be registered until it has a minimum paid-up capital of Rs. 100 crores, and in case the company is Reinsurance Company, and then the minimum capital is Rs. 200 crores.

After receiving the detail of the application by the IRDAI, the applicant must appeal to SAT within 30 days for reconsideration.

The time frame of 12 months from the date of receiving an order to begin the business. Though in case the applicant fails to commence the business within the time period, then the applicant may apply for an extension of 24 months.

  • The insurer doesn’t pay the yearly fee;
  • The insurer has been sentenced under any offence by the law;
  • The insurer doesn't follow all the guidelines of the Companies Act, 2013, Foreign Exchange Management Act, 1999, Prevention of Money Laundering Act, 2002, General Insurance Business Act, 1972, or any other law prescribed by the IRDAI.

It’s a company that provides financial assurance to insurance agencies. Reinsures handle dangers that are arbitrarily huge for agencies to deal with all on their own and make it possible for back up strategies to obtain more business.

Why Swarit Advisor?

Why Swarit Advisor
Swarit Advisors Private Limited

mayank singh

From Dehradun Recently Purchased @Partnership Firm