- Re-insurance Broker:-
A Re-insurance Broker specializes in placing re-insurance business—that is, insurance for insurance companies. They help insurers or reinsurers design re-insurance programs, locate appropriate re-insurers (domestic or overseas), negotiate terms, and handle documentation and claims support.
- Composite Broker:-A Composite Broker is licensed by the IRDAI to carry out both direct insurance and re-insurance broking activities under a single registration, allowing it to serve a broader spectrum of clients and insurers.
3. Who is eligible to obtain registration as an Insurance Broker under IRDAI Regulations?
The Insurance Regulatory and Development Authority of India (IRDAI) grants registration only to applicants who satisfy all the conditions and criteria prescribed under the IRDAI (Insurance Broker) Regulations, 2018. The key eligibility conditions are as follows:
- Legal Constitution:
The applicant must be a Company incorporated under the Companies Act, 2013, or a Limited Liability Partnership (LLP) registered under the Limited Liability Partnership Act, 2008. Individuals, sole proprietorships, and traditional partnership firms are not eligible to apply.
- Principal Business Activity:The entity must carry on insurance broking as its principal and exclusive business activity, and shall not engage in any other business which creates a conflict of interest with insurance broking functions.
- Fit and Proper Criteria:The promoters, directors, and key managerial personnel of the applicant must satisfy the “fit and proper” requirements prescribed by IRDAI, demonstrating integrity, financial soundness, and competence.
- Infrastructure and Personnel:-The applicant must have adequate infrastructure, including suitable office space, IT systems, and qualified personnel. A Principal Officer possessing the requisite qualifications and training, along with a sufficient number of Broker Qualified Persons (BQPs), must be appointed in accordance with IRDAI norms
4. What is the minimum capital requirement for obtaining registration as an Insurance Broker?
As per Regulation 19 of IRDAI (Insurance Broker) Regulation 2018, any applicant seeking to become an insurance broker under these regulations shall have a minimum paid up capital/contribution as mentioned below:
| Category |
Minimum Capital/ Contribution (Rupees) |
| Direct broker |
Seventy Five Lakh |
| Reinsurance broker |
Four crore |
| Composite broker |
Five crore |
Notes:-
- The capital in the case of a company limited by shares and a cooperative society shall be
in the form of equity shares;
- for the contribution of partners in the case of LLP shall only be in cash;
- Further, the investment in the applicant by the promoters/ shareholders/ partners shall be
from their own funds and not from any other sources.
Explanation: For the purpose of these regulations own funds do not include funds
arranged by way of borrowings or loans.
5. What is the application fee for obtaining registration as an Insurance Broker?
Every insurance broker at the time of application for certificate of registration, pay a non-refundable application fees as set out below
| Category of Insurance broker |
Amount of application processing fee payable |
| Direct broker |
Rs.25,000 |
| Reinsurance broker |
Rs.50,000 |
| Composite broker |
Rs.75,000 |
Notes:-
- The fee must be paid by a crossed demand draft or electronic transfer in favour of “Insurance Regulatory and Development Authority of India”, payable at Hyderabad.
- The application fee is non-refundable, irrespective of whether the registration is granted or refused
- Separate fees apply later for grant of registration and renewal, as specified under the respective Schedules of the Regulations.
6. Is there any pre-deposit requirement under the IRDAI (Insurance Broker) Regulations, 2018?
As per Regulation 23 of IRDAI (Insurance Broker) Regulation 2018, every insurance broker shall before the commencement of their business, deposit and
keep deposited with any scheduled bank a sum equivalent to
-
Rupees ten lakhs for direct broker
- 10% of the minimum capital/ contribution specified under Regulation 19(1)for
reinsurance / composite broker in fixed deposit, which shall not be released to them
without the prior written permission of the Authority.
7. What is the validity period of the Insurance Broker’s Certificate of Registration?
As per Regulation 11(1) of the IRDAI (Insurance Broker) Regulations, 2018 (as amended up to 2019), a Certificate of Registration issued by the Insurance Regulatory and Development Authority of India (IRDAI) is valid for a period of three (3) years from the date of its issuance, unless it is suspended or cancelled earlier by the Authority
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