Insurance Broker License Renewal Process in India
Insurance is one of the essential facets of human life. Life is all about uncertainties therefore guarding it against adversity is the thing of the wise. Insurance plays a massive role in guarding you against potential future losses and if you are considering getting insured then contact a certified insurance broker. An insurance broker can be an individual or a company that assists the customers in choosing the best-suited insurance plan for them. An insurance broker is an intermediary between the customer and the insurance company. He requires a license to operate his work. This article contains a brief on the Insurance broker license renewal process.
Issuance of Insurer broker license
The administration of the insurance broker is done by the Insurance Regulatory and Development Authority of India (IRDAI). Only IRDAI is responsible for the issuance, cancellation, or renewal of the Insurance broker’s license.
Who can apply for Insurance broker registration/license?
The insurance broker license can be applied for by the following:
- A private company registered under the Companies Act, 2013;
- Any Limited Liability Partnership (LLP) can apply;
- Any individual recognized by the authority; and
- A cooperative society made according to the provisions of the Co-operative Societies Act.
Documents required for Insurance broker’s license renewal
Following is the list of relevant documents to be attached with application form:
- Duly filled Schedule I Form K;
- Renewal checklist signed by the Director/partner and the principal officer of the company;
- Shareholding pattern of the company certified by a CA;
- Renewal training certificate undergone by the principal officer and broker qualified persons;
- Undertaking duly signed by the Director/partner and the principal officer of the company;
- List of broker qualified persons;
- Business premium figures and list of top 10 clients year wise for the last three years;
- Certificate from CA certifying compliance of regulation 33; and
- Any other document, if required.
Procedure for renewal of Insurance broker license
The following procedure is followed for renewing insurance broker’s license:
- The application for renewal of the insurance broker’s license must be submitted a minimum of 30 days before the expiry of the license. It must be submitted to the authority by the insurance broker in Schedule I Form- K.
- While processing the application, the authority, if required, may seek further clarifications or information regarding the application submitted and the insurance broker is required to submit such information within 21 days.
- The applicant is required to pay the requisite license renewal fee along with the relevant documents for such a renewal. The application will not be processed unless the fee required is paid.
- If the authority is satisfied that the applicant fulfills all the conditions for renewal of insurance broker license, it shall renew the registration of the applicant for three years and shall send the notice to that effect to the applicant.
What to do if an Insurance broker license is not issued?
If the authority if of the opinion that the application submitted by the applicant doesn’t fulfill the requirements set out in the regulations then it may refuse to issue such license.
Such refusal must be communicated to the applicant by the authority within 30 days of such refusal and the authority must state the grounds for which the application has been refused. Once the applicant learns about the refusal and the grounds for such refusal he may appeal to the Securities Appellate Tribunal.
What happens when an Insurance broker license is refused from renewal?
Where the application of the insurance broker for renewal is refused by the authority, the applicant shall cease to be an insurance broker however he shall be liable for the contracts already entered by him. Such service will continue until the expiry of the contract or for six months maximum. Required arrangements shall be made for another registered insurance broker who shall attend the contracts.
License renewal fee for Insurance brokers
- A direct broker is required to pay an amount of Rs. 50000/- in case of fresh registration whereas renewal fee is Rs. 1,00,000/- for a period of three years.
- Reinsurance broker is required to pay an amount of Rs. 1,50,000/- in case of fresh registration whereas renewal fee is Rs. 3,00,000/- for a period of three years.
- The composite broker is required to pay an amount of Rs. 2,50,000/- in case of fresh registration whereas renewal fee is Rs. 5,00,000/- for a period of three years.
Points to remember while applying for insurance broker’s license renewal
- In case the application reaches the authority after the period of 30 days but before the actual expiry of the present registration certificate then an additional fee of Rs. One hundred shall be paid to the authority by the applicant.
- In case the applicant provides reasonable reason in writing for the delay and if the authority is satisfied by such reason, it shall accept the application for renewal after the expiry of registration certificate up to 60 days on payment of additional fees of Rs. 750/-.
- An insurance broker can submit the application for license renewal 90 days before the date of expiry of the registration.
- It is essential that the principal officer and the broker qualified persons to complete at least 25 hours of theoretical and practical training before seeking license renewal. Such training should be imparted by an institution recognized by the authority.
- The insurance broker must adhere to the compliances under the Insurance broker regulations under IRDAI.
Conclusion- Insurance Broker License
A license is vital for any business without which one cannot operate. It is no different in the case of insurance brokers. One needs to keep a check on the above-mentioned regulations and facts in order to ensure a smooth process of insurance broker license renewal.