Insurance Broker License

Insurance Brokers are companies and individuals that represent insurance companies. Insurance brokers provide policies to customers on behalf of companies. For insurance and reinsurance business to smoothly function properly, there are requirements to follow rules and procedures under insurance brokering licens..

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Insurance Broker License- An Overview

An Insurance broker is an individual or company that secures policies for the customer. Insurance brokers would secure commission from an insurance company on the different types of policies they provide customers. A company wanting to become an insurance broker would have to apply to the Insurance Regulatory Development Authority of India (IRDAI) for an insurance broker license.

There are specific prescribed rules related to insurance brokers in India. Such rules are formulated by the Insurance Regulatory and Development Authority of India (IRDAI). These rules would include the Insurance Regulatory and Development Authority Act, 1999 and the Insurance Regulatory Development Authority of India (Insurance Brokers) Regulations, 2018. Hence once a insurance broker license is secured by the applicant, they would have to comply with the requirements of the above laws and rules. Brokers would act as a middle man between insurance companies and the public. This is carried out in order to sell more amount of policies on behalf of the insurance company.

Types of Insurance Brokers

  • Direct Brokers

    A direct broker is an institution that gets detailed information regarding the clients for an insurance business. Apart from this, the direct broker renders advice on the appropriate insurance and the policies available. The direct broker also obtains market information on the insurance business. The direct broker acts on the instructions provided by the client, such as helping the client open an e-insurance account and helping clients pay the premium on the insurance business.

  • Re-insurance Broker

    A re-insurance broker performs similar functions to the direct broker. Re-insurance broker manages the business of re-insurance. Apart from this, the re-insurance broker sells products related to re insurance, such as international insurance. A re-insurance broker also maintains the market statistics of re-insurance markets. Negotiating on behalf of the client is another responsibility of the re-insurance broker.

  • Composite Broker

    A composite broker is an institution that carries out all the functions of a direct broker and a re-insurance broker. Therefore this form of broker carries out the combined role of a direct broker and a re-insurance broker.

Why Insurance Broker Licence is Required

  • To ensure that a significant number of insurance products are sold on behalf of the Insurance Business.
  • To ensure that there is compliance with relevant laws and regulations related to insurance products.
  • To monitor activities and conduct market research on insurance-related products.
  • To act on behalf of clients to negotiate for insurance-related products.
  • To ensure that a nodal authority regulates the insurance business.
  • Insurance broker licence would also assure clients regarding the genuinely of the broker.
  • To negotiate policies and premiums on behalf of clients.

Who Regulates Insurance Broker Licence

The primary regulatory authority for the Insurance Broker Licence is the Insurance Regulatory and Development authority of India (IRDAI). The Insurance Act 1938 and the Insurance Regulatory and Development Act 1999 are the regulations behind Insurance law. Apart from this, the Insurance Regulatory and Development Authority of India (Insurance Brokers) Regulations, 2018 apply to Insurance Broker Licence.

Eligibility criteria for Insurance Broker License

The Government has prescribed minimum requirements for securing a Insurance broker licence. Apart from this, the broker has to ensure to get registered with the IRDAI.

Corporate Structure

The following can be registered under the Insurance Broker Licence:

  • Company that is established under the Companies Act 2013 or the previous Company Law 1956;
  • A partnership that is registered under the Limited Liability Partnership Act, 2008;
  • A cooperative society which is registered under the Co-operative society act 1912; and
  • Any other individual or company that is allowed to conduct the business related to an Insurance Broker.

Capital Requirements

The applicant must satisfy the capital requirements for applying for a Brokers Licence:

  • Direct Broker- 75 Lakhs.
  • Re-insurance Broker- 4 Crore.
  • Composite Broker-5 Crore.

Net Worth Requirements

The applicant must also satisfy the net worth requirement for applying for a broker licence:

  • Net worth of the insurance broker must not fall below:

    • 50 lakh Rupees for a Direct broker; and

    • 50% of the minimum capital requirements or contribution or equivalent for a re-insurance broker and composite broker.

Deposit Requirements

Every insurer (applicant) before the commencement of the insurance broker business must ensure that the deposit has been maintained with the scheduled bank. The sum which has to be deposited is as follows:

  • 10 Lakh Rupees for a Direct Broker; and
  • 10% of the minimum capital/ contribution is required for re-insurance / composite broker. Fixed deposit shall not be released to them without the prior written permission of the Authority.

Office Space/ Facilities

  • The applicant applying for an Insurance Broker Licence must also satisfy necessary infrastructure such as adequate office space, equipment, trained manpower, and IT infrastructure to effectively discharge its activities.


  • The applicant must ensure that at least two qualified persons are present who have the necessary training to function as insurance brokers. This is required to conduct the business of the insurance broker. If the applicant is carrying out insurance broker business related to life insurance and general insurance, then the applicant has to make sure that the two qualified individuals have relevant and necessary qualifications in both life and general insurance.
  • The principal officer of the business must also have requisite qualifications. He must possess the necessary certificate and skills for carrying out the insurance broker business.
  • Principal officer must be a key management executive of the company, whole-time director, partner, or office, which requisite experience.

Purpose of the Business

  • The applicant should ensure that the main objects of the business is insurance brokering. These must be mentioned in the objects clause of the Articles of Association (AOA) and the Memorandum of Association (MOA).
  • Foreign investors are also allowed to invest in an insurance brokers business.

Different Types of Insurance Broker Licenses

Different Types of Insurance Broker Licenses

Process / Procedure for Applying for an Insurance Broker License

Application for Grant of Certificate of Registration:

  • The applicant should make an application regarding the type of insurance broker business.
  • The application for an Insurance Broker License must be made in FORM B- Schedule I of the regulations.
  • The application must be submitted with necessary papers mentioned in FORM-C Schedule I of the regulations.
  • For granting the certificate of registration, an application must be submitted along with the fees specified in FORM D- Schedule I of the Insurance Regulations. The fees that has to be paid for application for an insurance broker is as follows:

    • Direct broker Rs.25,000.

    • Re-insurance broker Rs.50,000.

    • Composite broker Rs.75,000.

  • Apart from this, there are mandatory fees that has to be paid for the registration requirements:

    • Direct Broker- Rs. 50,000/- after granting of an in-principal approval where the application is new. In case of renewal of registration, the fees will be Rs 1,00,000/- for a period of 3 years.

    • Re-insurance Broker- Rs. 1, 50,000/- after granting of an in-principal approval where the application is new. If there is a renewal of registration, then the fee to be paid for renewal is Rs. 3,00,000/-  for 3 years.

    • Composite Broker- Rs.2, 50,000/- after granting of an in-principal approval where the application is new.  If there is a renewal of registration, then the fee to be paid for renewal is Rs. 5,00,000/-  for 3 years.

  • The fee payable as the mandatory fee would be for the validity period of the certificate of registration.
  • Fees must be paid through electronic means or demand draft (DD) payable in favor of the Insurance Regulatory and Development Authority of India, Hyderabad.

Clarification/ Further Information

  • The applicant can be asked to furnish further information by the authority
  • If required, the applicant has to submit these necessary papers within 30 days from receiving the intimation from the authority.

Procedure for Issuing Insurance Broker License (registration)

  • If the authority feels that all the requisite information complies with the Insurance broker license, then an in-principal approval would be provided to the applicant for complying with the requirements related to the certificate of registration.
  • The authority will grant the certificate if the applicant has complied with the laws and regulations.
  • The certificate of registration as an Insurance Broker License would be given to the applicant when the applicant satisfies that the code of conduct would be adhered to.
  • The broker applying for a certificate of registration can also apply for any other registrations under the IRDAI. Such other registration would only be granted to the applicant after issuing the certificate of registration for the first instance.
  • An applicant can make a new application if the certificate of registration has been canceled/ repealed due to a change in law or held by a Securities Appellate Tribunal or any court of law. An application under this can only be made after one year to the concerned authority.


  • An application for starting an insurance business can be rejected if the authority feels that the applicant has not fulfilled the necessary requirements.
  • The authority must communicate the refusal to grant the application for an Insurance broker license within 30 days of communication of the rejection.
  • An applicant can make a new application after one year of rejection of the application.

Conditions for Granting the Insurance Broker License

The IRDAI makes certain conditions before granting the insurance brokers licence:

  • The insurance broker must conduct the business according to the rules of the IRDAI.
  • If the insurance broker business has provided false or misleading information regarding the particulars of the business, then the same must be intimated to the authority.
  • Insurance broker business must handle all grievance procedures of clients within 14 days of receiving the complaint. The business must keep information regarding the number of complaints received from customers.
  • Insurance brokers must reasonably conduct their business under the rules laid down by the IRDAI.
  • The insurance broker must maintain books of accounts.
  • Insurance broker should not conduct multi-level marketing or solicitation.

necessary papers required for Insurance Broker Licence

  • Submission of relevant information as required in the Schedule I – Form B.
  • Copy of the Memorandum of Association and Articles of Association should be according to the requirements of the Companies Act 2013.
  • Remittance of the Fee for the particular category of Insurance broker licence.
  • Training for the employees starting an insurance broker business
  • Schedule-I Form F should have the relevant data of the principal officer.
  • Fit and Proper certification, which is required as per Schedule-I Form G.
  • Declaration submitted by a key management executive, principal officer, director of the company that they are not having any form of disqualification under the Act.
  • Details of Directors/ Partners, Promoter and Key Management Personnel are to be provided in the Form.
  • Schedule I- Form F- List of qualified persons responsible for managing and procuring brokerage business along with their qualifications.
  • Details of statutory auditors and Principal Bankers along with the Bank Account Number of the applicant.
  • Details of infrastructure, including IT infrastructure along with supporting evidence thereof like ownership or lease agreement evidencing that sufficient space is present for managing the brokering business.

Validity for Certificate of Registration for Insurance Brokers Licence

  • A certificate granted by the IRDAI would be valid for three years from the date of issue. This would be subject to the order from the authority.
  • An insurance broker would not be permitted to do the Insurance Broker business without possessing a proper certificate and registered with the authority.

Insurance Broker Licence Renewal in India

  • Applications for renewing an insurance broker licence must be made to the relevant authority 30 days before the expiry of the licence. The application must be made in FORM K of Schedule –I of the regulations.
  • If an application is made after the expiry of the above period, but before the actual expiry of the certificate, then a payment of Rs. 100/- must be made with the application.
  • If there is a delay in making an application for renewal of registration, then the same must be made by the applicant. If this is within 60 days of the expiry of the certificate of registration, the applicant would have to pay Rs. 750/-.
  • Any application which is received after the expiry of the 60 days would be considered only after 1 year. In the one year, the insurer must not conduct any business or solicit any form of business.
  • An Insurance broker cannot apply for renewal after 90 from the expiry of the certificate.
  • Insurance brokers cannot business of brokering after the expiry of the certificate except serve existing policyholders.
  • The application for renewal of certificate for broker insurance would be the same as the new application.
  • If the application or renewal is rejected, the same has to be notified to the applicant.

How can Enterslice help in securing Insurance Broker Licence

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Frequently Asked Questions

There are different categories relating to insurance brokers licence. However, the essential types are as follows:

  • Direct Broker (Life Insurance)
  • Direct Broker (General Insurance)
  • Direct Broker (Life Insurance & General Insurance)
  • Re-insurance Broker
  • Composite Broker

Principal Officer is usually a person who has a higher role in the business. The principal officer is usually a shareholder, director, chief executive officer, managing director, or a whole-time director. For the performance of duties, these individuals would carry out responsibilities related to insurance and re-insurance business for the development of the business.

A broker is an individual having the necessary education and experience for handling an insurance brokerage business. A director can also be a broker for an insurance business as long as the director has the requisite qualifications for managing the insurance business.

The following cannot be considered as an Insurance broker or cannot apply for an insurance brokerage licence:

If the applicant for insurance brokerage business is a Limited Liability Partnership, then the following cannot be partners in the same:

  • A Non-Resident Entity;
  • An Individual Resident outside India; and
  • A foreign partnership that is registered under the laws of a foreign country.

No. An insurance broker is not permitted to carry out another business apart from the insurance brokerage business. As per the objects clause of the company, the brokerage business must carry out the objects mentioned in the memorandum of association and articles of association.

Foreign direct investment (FDI) is allowed through the automatic route and government route. However, the maximum amount of permissible limit for foreign direct investment in the insurance brokerage business is 100%.

Yes. As per the requirements of the registrar of companies, a NOC is required to have the name as insurance broker/re-insurance broker in the name of the company. This NOC has to be obtained from the respective regulator.

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