IRDA Insurance Marketing Firm
Overview
The IRDA governs the registration of insurance marketing firms so that entrepreneurs and insurance agents can start their own insurance distribution company.
Pursuant to the Registration of Insurance Marketing Firm Regulations, 2015, an “Insurance Marketing Firm” is defined as an entity registered by the IRDA-
- to solicit or procure insurance products,
- to undertake insurance service activities and
- to distribute other financial products.
This “Insurance Marketing Firm” concept in India originated and run via IRDA Registration of Insurance Marketing Firm Act 2015 under the Insurance Regulatory and Development Authority of India (IRDA). Insurance Marketing Firms are entities registered in India which are allowed to solicit or procure insurance products, to undertake insurance services and to distribute other financial products.
Insurance industry is set to witness robust growth in the coming years as the Government of India is raising the FDI in insurance, and there exists tremendous potential for an insurance marketing firm starter.
What are the activities allowed to an IRDA Insurance Marketing Firm?
An Insurance Marketing Firm will be allowed to perform the following functions as per the Act:
- To Solicit and procure the Insurance Products
- Provision of Insurance Servicing Activities
- Other financial product’s marketing
Process
Applicant needs to file Form A along with required documents which shall be accompanied by non-refundable application fees of INR 5,000/-.
Once entity is formed it should reflect in it’s name the activity of Insurance Marketing Firm.
Thereafter, infuse the required capital and prepare the documents/information etc. to place the application with concerned authority.
Once the entire documents and information are examined by authority, they will inform their decision as to registration be granted or not.
Eligibility to Obtain the registration of Insurance Marketing Firm
To obtain the IRDA registration, the following eligibility criteria must be fulfilled.
These entities can apply for the registration:
Applicant should have net worth of not less than INR 5,00,000/- if the applicant is opting for only one district which is an aspirational district.
Other Applicant-Entities having a net worth of not less than Rs.10 lakhs
Net-Worth computation as per companies act, 2013
Private Limited Company or LLP must have the word “Insurance Marketing Firm” in its name.
Taking out and maintaining at all times a professional indemnity insurance cover throughout the validity of the period of the Insurance Marketing Firm registration granted by the IRDA.
The principal officer of the Firm must satisfy one of the criteria mentioned as below:
i) The principal officer of the Firm must satisfy the criteria of training, examination and certification.
ii) Principal Officer of the Firm must be considered as a ‘fit and proper person’.
Upon satisfaction of the above eligibility criterions, the applicant needs to make an application to the IRDA in the given appropriate registration format as an Insurance Marketing Firm.
The applicant will be providing registration as “Insurance Marketing Firm” if the IRDA satisfies with the application.
Qualification of Principal Officer
The Qualification is divided into two aspects –
i) Academic and
ii) Training
Academic Qualification
1.He/She should be a member of Insurance Institute of India, Mumbai or Institute of Actuaries of India, Charter Institute of India or ICAI or ICSI or ICWAI
Training Qualification
He/she should have completed 25 Hours training and have passed the examination for the qualification of Principal Officer from Insurance Institute of India, Institute of Actuaries of India, Chartered Insurance Institute of London or Post Graduate from Institute of Insurance and Risk Management, Hyderabad
Other than above qualification Principal Officer, need to complete the 50 hours training of Insurance Marketing Firm from an institution which is well recognized by and authority and should have passed an examination.
Insurance Sales Person is the title given to an individual who is employed by Insurance Marketing Firm to solicit or procure insurance products.
Qualification and Certification of Insurance Sales Person (ISP)
He/she should pass +12 examination from a recognized Board/Institution.
He/she should be resident in the area where firm is registered.
They should have completed 50 hours training and passed the examination required to be qualified as Insurance Sales Person.
Financial Service Executive is the designation given to individual person who is employed by Insurance Marketing Firm and is holding a valid license issued by the respective financial regulators, other than the authority.
Documents Required For Registration:
1.Organizational Structure with chart
2.Certificate of Incorporation, Memorandum of Association and Article of Association of Company or Deed
3.PAN Card
4.Board Resolution
5.KYC of Director/Partner and Shareholder or Principal Officer
6.Academic Qualification and Experience Certificate of Principal Officer and/or Insurance Sale Person
7.Place of Business Proof
8.Shareholding Pattern of Company/LLP
9.Name and Activities of Associate Concern
10.Name and address of Principal Banker and Statutory Auditor
11.Business- Plan for at least 3 years
12.Infrastructure commitment like office space, equipment and manpower available with applicant.
13.Name of Insurance Companies with whom applicant is propose to work with along with consent letter
14.Net Worth certificate from Statutory Auditor
15.Audited financial statement of last three years or in case of newly incorporated then unaudited financial statement of company/LLP
16.Undertaking and Declaration
17.Certification of examination cleared of Principal Officer and Insurance Sales Person
Validity of RegistrationThe Insurance Marketing Firm’s registration issued by the IRDA would be valid for a period of three years from the date of its issue.
RENEWAL
Registered entities needs to apply in Form AA for renewal within 30 days before the expiry of existing license along with required documents and renewal fees of Rupees 2,000/-.
Principal Officer and Insurance Sales Person needs to complete minimum 25 hours of theoretical and practical training which is given by the institution recognized by authority before seeking renewal of registration
Duration:
- This process will approximately take minimum 3 months from the time applicant places the application form which is error-free as per the guidelines.
- The authority will return the application in case the application is incomplete or not at par.
- The application, information and documents needs to be in order with proper page numbering along with true and correct information.
- Thereafter, the authority will scrutinize the documents and share the questionnaire as per their need of clarification and upon satisfaction of their regulatory norms, guidelines and prescription the authority issued the Certificate of Authorization, where end to end process takes the time around 3 months
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