In India, the provisions related to an insurance broker are governed and regulated by the Insurance Regulatory and Development Authority of India (Insurance Brokers) Regulations Act, 2018, also known as IRDAI. Insurance brokers act as intermediaries or as interconnecting links between clients and insurance companies. They work on behalf of the client, and their primary role includes making appropriate and informed decisions regarding various insurance policies in the market. This article outlines all the necessary requirements which are mandatory for registering as a broker. What is a Broker? Insurance brokers, as mentioned, act as intermediaries between insurance companies and agents. They make money from the commissions they receive after selling insurance to individuals who are generally their clients and businesses. The commission brokers normally receive 2 to 8 per cent of the insurance commission. Brokers sell all types of insurance, including health insurance, life insurance, accident insurance, homeowners insurance and annuities. One thing that is important to note is that brokers are very different from insurance agents. Insurance brokers act on behalf of the customers and not from the side of insurance companies. They help clients in choosing the best insurance policy according to their specific and customised needs. Types of Brokers There are generally three types of insurance brokers. They are mentioned below in thorough detail:- Direct BrokersA direct broker provides more appropriate and rational advice regarding various insurance policies that are available in the market to his client. Direct brokers are registered and licensed by the IRDAI (Insurance Regulatory and Development Authority of India). They are familiar with the latest insurance policies and coverage available in the market at the present time and hold deep in-sight knowledge regarding insurance policies and laws governing them. The direct brokers act on behalf of the client and also keep them updated with detailed information regarding various insurance policies in the market. The minimum capital requirement for registering as a broker is Rs. 75 lakhs, and maintenance of a net worth of rs 50 lakhs is required.Reinsurance BrokersThe main task of a reinsurance broker is to arrange reinsurance contracts between direct insurers and reinsurers. A reinsurance broker works on behalf of both parties, i.e. both from the client's side and from the insurance company’s side. In this way, a reinsurance broker is legally obligated to both parties. The reinsurance brokers also help their clients to which they are obligated to find the best insurance policies with the maximum premium coverage.The minimum capital requirement for registering as a broker, in this case, is Rs. 4 crores, and maintenance of a net worth of 50 per cent is necessary as a capital requirement.Composite BrokersAs the name suggests, composite brokers are a combination of both direct and reinsurance brokers. Therefore composite brokers play a dual role. The minimum capital requirement for registering as a composite broker is Rs. 5 crores, along with maintenance of a net worth of Rs 50 per cent of the minimum capital requirement. Provisions Related to Insurance Brokers in India To register as a broker or insurance, the person needs to get a license formulated and laid down in the Insurance Regulatory and Development Authority Act, 1999, and the Insurance Regulatory Development Authority of India (Insurance Brokers) Regulations Act 2018. After securing the license for registering as a broker, the broker must comply with all the necessary requirements of the above-mentioned laws and rules. The broker acts as a middleman or as an intermediary between the clients and the insurance companies to sell more insurance policies on behalf of the insurance policy. Given below are the eligibility, documents required and procedures that are required in order to get registered as a broker in India. Documents Required for Registering as a Broker Following documents are required in order to get successfully registered as a broker in India. These are mentioned below:- Certificate of Incorporation if you are registering as a company under the Company’s Act, 2013.Copies of MoA, AoA and a copy of the Permanent Account Number (PAN Card) are required.Pre-licensing training certificate approved by the Insurance Regulatory Development Authority of India (IRDAI) and the personal documents of the director, i.e. Aadhar Card, Voter ID and passport ID, are required in case the company wants to get registered as a broker.Net-worth certificate approved by the Chartered Accountant to show the minimum capital requirements laid down by the Insurance Regulatory Development Authority of India (IRDAI), business plan and insurance brokerage agreement. These documents are required for registering as a broker in India. However, other important documents may also be required as required by the IRDAI as per needs from time to time. Requirements for registering as a Broker Following are the requirements and the eligibility criteria that are required for registering as an insurance broker in India. This is mentioned below:- Any partnership registered under the Limited Liability Partnership Act, 2008, is eligible to apply for the broker’s license in India.Any cooperative society registered under the Co-operative Societies Act 1912 is eligible for registering as a broker.Any company registered and incorporated under the Company’s Act of 2013 or any previous company law is eligible for registering as a broker in India.Apart from the company or a partnership, any individual recognised by the IRDAI to carry on the business related to an insurance broker or any person who holds a pre-training certificate approved by the Insurance Regulatory and Development Authority of India (IRDAI) is eligible for registering as a broker. Benefits of Registering as Broker There are several benefits to registering as broker. These benefits and advantages are given below:- It helps in complying with all the necessary legal requirements and laws to avoid legal troubles and financial penalties.Insurance broker license enhances credibility and gives due recognition to the brokers.It also gives access to the broker to lots of insurance products from different insurers. This helps brokers to provide more comprehensive and insightful insurance coverage to clients and makes it easier to choose the best policy for them.Insurance broker license also provides professional development to the brokers by giving them in-depth and thorough knowledge regarding various insurance policies that are available in the market. Conclusion Overall, it can be concluded that registering as a broker provides a plethora of benefits, including legal recognition and credibility. These added advantages can certainly be proved to be helpful to run a successful and compliant business in the insurance industry. Also Read:IRDAI Broker LicenseRequirements for an Insurance Broker RegistrationHow to get an Insurance Broker License in India?