Finance Business Insurance License

Registration Renewal Process of Insurance Marketing Firm

In the insurance sector, Insurance Marketing Firm (IMF) is the new type of business and distribution channel. It was formed by one of the insurance committee in 2007. In their operation of work, they are similar to an insurance distribution firm. Insurance Marketing Firm collaborate with insurance companies and market the products. In this article, we shall have a close look at its registration renewal process.

Definition of Insurance Marketing Firm (IMF) 

 As per the Insurance Regulatory and Development Authority of India (Registration of IMF) Regulations, 2015 IMF is defined as an entity registered by the authority to solicit or procure insurance products, to undertake insurance service activities and to distribute other financial products as mentioned in the regulations through employing the individuals licensed to market, distribute and service other financial products.

Procedure for Renewal of Insurance Marketing Firm (IMF) Registration

The procedure is as follows:

1. The IMF is required to submit the application for registration renewal to the authority in Form AA^[1] minimum 30 days before the expiry of the registration. The IMF can also apply for such renewal 90 days before the expiry of the registration.
2. The applicant must submit the required documents (specified under the next heading) along with the application form.
3. The application must be submitted along with the requisite fee of Rs. 2000 + service tax. In case the applicant fails to submit the application for renewal to the authority minimum of 30 days before the end of the registration, then an additional amount of Rs. 100 must be paid as penalty.
4. Thereafter the authority may seek further information or clarifications regarding the renewal application submitted by the applicant while processing the application.
5. The IMF is required to submit such information or clarification within 21 days of receipt of the communication. In case the applicant requires additional time for submission of such information then the authority shall consider the request on merit.
6. Eventually, when the authority is satisfied that the applicant fulfills all conditions for renewal of registration, it shall renew the registration in Form D for three years and communicate the same to the applicant.

Documents required for Renewal of Insurance Marketing Firm Registration

The documentation to be attached for renewal is specified below:

• Submit the relevant information as required in Form D;
• Declaration of Fit and Proper criteria from the principal officer, Directors, Managing partners must be provided in the Fit and Proper form;
• Infrastructure details with supporting evidence such as ownership or lease agreement papers concerning the office space/equipment etc, for areas of operation;
• Renewal training certificate for 25 hours undergone by the Principal Officer;
• Copies of professional indemnity insurance policies of the past three years;
• Copies of annual reports of the last three years;
• Any other information that is relevant to the nature of services provided by the applicant; and
• Any other document as deemed necessary by the authority.

It is to be noted that the list of documents is only indicative and not exhaustive. The additional documents would be based on the advice on the pattern of shareholding, any other matter required as per the authority.

What to do when renewal for registration is not granted by the authority?

If an application doesn’t satisfy the prescribed conditions, the authority may refuse to renew the registration. However, the applicant must be provided the opportunity to be heard and no application can be refused without providing such an opportunity.

If an applicant is aggrieved by the decision of the authority, he or she may apply to the chairman of the authority, within 30 days from the receipt of the decision of the authority, to reconsider its decision. The chairman of the authority will consider such a request and intimate the applicant in writing regarding his decision within 60 days from receipt of the reconsideration application. 

Further, if an applicant is aggrieved by the decision of the chairman, he or she may appeal to Securities Appellate Tribunal^[2] as per the prescribed procedure within 45 days of the order. He may conform, modify or set aside the order appealed against. It is important to note that if the Securities Appellate Tribunal rejects such appeal then the applicant can make a fresh application for Insurance Marketing Firm Registration only after one year.

What happens when a renewal of Insurance Marketing Firm registration is refused?

Where an application for renewal of registration is refused by the authority, the applicant shall from the date of receipt of such information cease to act as an IMF and shall also cease to solicit insurance business and conduct insurance activities. However, it may be noted that the firm shall continue to serve the extant policies for six months within which arrangements shall be made by the IMF for having the contracts attended to.

Conclusion