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The IRDAI or Insurance Regulatory & Development Authority of India, is a regulatory body that governs the insurance industry in India. It frames policies and procedures that may require the insurers to follow to comply with disclosure and reporting requirements under the relevant guidelines. The present article will define one such requirement, which will discuss the procedure for the registration of Indian Insurance Companies under regulation IRDAI (Registration of Indian Insurance Companies) Regulations, 2022. The regulation IRDAI (Registration Of Indian Insurance Companies) Regulation 2022 is a new regulation issued on 5th December 2022 to promote the growth of the insurance sector by simplifying the registration process and promoting ease of doing business.
The first step in the process of registration of Indian Insurance Companies will require the company or co-operative society to obtain a No-objection Certificate before incorporating in India with the name ‘Insurance’ or ‘ assurance’ or ‘reinsurance’. The applicant will be issued the no-objection certificate from the authority upon request by making an application in the specified format.
Validity of the Certificate: The NOC shall be valid for 6 months, within which the application is required to make a registration application. However, the period of such NOC may be extended for 3 Months.
The second step in the process for registration of Indian Insurance Companies includes applying for requisition of registration by making an application before the authority for issuance of Form IRDAI/R1. The authority will examine the application for the applicant and, upon satisfaction, issue the Form IRDAI/R1, which will be valid for 3 months and within which the applicant is required to submit the duly filled Form IRDAI/R1 before the authority. Such a period may be extended by the authority for a further period of 3 months.
Accompanying Documents: Every application for registration of Indian Insurance Companies shall be accompanied by the following documents:
Additional measures taken by authority: The authority shall take into account the following matters:
Approval by authority: The authority’s chairperson will issue the “R1” certificate upon examining the application and satisfaction. In addition to the approval, the authority will issue Form IRDAI/R2 to the applicant.
Validity period: The ‘R1’ approval shall be effective for 3 months from the approval date, within which the applicant shall file duly filled form IRDAI/R2. However, the said period may be extended by the chairperson for a further period of 3 months.
The third step in the process of registration of Indian Insurance companies will include filing of registration application in Form IRDAI/R2.
Accompanying Documents: The Form IRDA/R2 shall be accompanied by the following documents:
Completion of processing but before approval by authority: The applicant shall before approval by the authority, but after completion of the processing Form IRDAI/R2 needs to submit the following documents:
Additional measures taken by authority: The authority shall take into account the following matters including:
Approval by the authority: The authority, after examining the application will issue the “R2” approval to the applicant for the registration of Indian Insurance companies.
The fourth step in the process for registration of Indian Insurance companies will include granting a Registration Certificate to the authority. The authority examines the applicant’s details and may register the applicant as an insurer. The chairperson of the authority will grant the Registration certificate to the applicant in Form IRDAI/R3, provided that the following conditions are satisfied:
The fifth step in the process of registration of Indian Insurance companies will include the commencement of the insurance business. The applicant granted the registration certificate should commence its business within 12 months from the date of granting the registration certificate. If the applicant does not commence business within 12 months, the certificate of registration will not be valid after the expiry of said period.
Extension of period: The applicant can seek an extension of the time limit through a written application if it cannot commence the business within the stipulated time period of 12 months. The application for extension shall be accompanied by the reason in writing for not commencing the business within the stipulated time.
However, it is pertinent to mention that the authority should only extend the time limit to 24 months from the date of granting the registration certificate.
The sixth step in the process of registration of Indian Insurance Companies is the rejection of the application by the authority. The authority, after giving an opportunity of being heard by the applicant, may reject the application in the following cases:
Communication of rejection: The authority, through order in writing, shall reject the application of the applicant. Further, it shall be communicated to the applicant within 30 days of such rejection.
Moreover, if the application for registration is rejected at any stage, then, in that case, the applicant should not be entitled to a certificate of registration.
The last step in the process of registration of Indian Insurance Companies is to appeal to the Securities Appellate tribunal. The applicant, being aggrieved by order of the authority, can appeal to the Securities Appellate Tribunal at any stage of the registration process.
The IRDAI has provided a streamline procedure for the entities willing to register themselves as insurance companies in India. It is pertinent to mention that company making an application shall have to obtain a No Objection Certificate before using the suffix “Insurance”, “assurance”, or “reinsurance” before incorporating the company in India. This will ensure that no company can be incorporated in India that will undertake any insurance-related activities without the authority’s approval. Further, before making any application for registration of Indian Insurance Companies, the applicant has to make a requisition for request in the first instance and then apply for the registration in the R2 from approval.
Read our Article: Insurance Company Registration Procedure