Insurance Corporate Agent

In accordance to the provision of Insurance Regulatory and Development Authority of India (Registration of Corporate Agents) Regulations, 2015 with effective from 1st April, 2016 any person whomsoever want to carry the Corporate Agent business need to take registration of Insurance Regulatory and Development Authority of India (IRDAI).

Corporate agent business refers to solicitation and servicing of insurance business for any of the specified category of life, general and health. 

Therefore Corporate Agent can be only for Life, General, Health or Composite, doing the business of solicitation and servicing for all category at one place. These registration can have arrangements with a maximum three life insurer, three general insurer and three health insurer to solicit, procure and service their insurance products.

Available Category for License:

• Corporate Agent – Life
• Corporate Agent-General 
• Corporate Agent – Health
• Corporate Agent – Composite

The applicant can place for license under any available category as per their strength on particular products of insurance company.

Eligible Entity:

Following corporate are known as eligible entity to take registration as an Eligible Entity for acting as Corporate Agent for Insurance Business of Insurance Company:- 

• Company either Public or Private incorporated as per Companies Act, 2013
• Limited Liability Partnership (LLP) registered under Limited Liability Partnership Act, 2008
• Co-operative Society registered under Co-operative Societies Act, 1912
• Bank, new corresponding Bank, Regional Rural Bank or NBFC registered with Reserve Bank of India

Above listed entity to act as corporate agent either have principal business is other than distribution of insurance products and insurance distribution is a subsidiary activity or shall have principal business is to exclusively carry on insurance intermediation.

Application Process:

Eligible entity with underlying object shall make an application in Form A to the IRDAI along with accompanied by requisite fees INR 10,000/- plus applicable taxes. It is non-refundable in the nature of payment. The fees shall be payable by an Account Payee draft in favor of “The Insurance Regulatory and Development Authority of India” payable at Hyderabad.

Any entity registered or licensed by any other regulatory body in a financial sector should obtain no-objection certificate from the respective bodies and file an application accordingly. 

In case of existing entity being applicant, may require to alter the Memorandum/Deed of association else the new entity should incorporate upon approval from IRDAI. Thereafter the preparation of documents, drafts, and information need to submit the application for IRDAI for final approval. 

Once the application is scrutinize by IRDAI and found good to go then IRDAI will communicate the grant of registration from the authority, the applicant shall pay a Fee of INR 25,000/- plus applicable taxes, within 15 days of receipt of communication.

Before applying an application to authority, the applicant entity should check:-

• Fit and proper criteria of IRDAI is met by Promoter/Director of Entity.
• Necessary infrastructure such as adequate office, equipment, trained manpower etc.
• Whether person directly or indirectly connected with applicant, has been refused in past the grant of license/registration by the authority
• Principal Officer of applicant is graduate and has received at least 50 hours of theoretical and practical training from approved institution and has passed an examination. The training hours is reduced to 25 hours only if principal officer is qualified from Insurance Institute of India, Institute of Actuaries of India, Institute of Insurance and Risk Management, CII London.
• Code of conduct is not violated by principal officer, director and other employees of the applicant during the last three years. 

Requirements of Capital:

An applicant exclusively doing insurance distribution shall have a minimum equity share capital or contribution and net worth of INR 50 Lakhs. They shall maintain the net worth at all times.

Validity of Registration:

Registration once issued shall be valid for a period of three years from the date of its issue, unless the same is suspended or canceled pursuant to these regulations.

Once the validity period is about to expire, the licensed entity should ask for renewal in Form A along with requisite Fees INR 25,000/- plus applicable taxes.

A corporate agent may, within 30 days before the expiry of registration, make an application to the authority for renewal of registration.

Specified Person:

Specified Person is employee of a Corporate Agent and need following qualifications:

• Minimum 12th Clear
• At least 50 hours training and clear examination. In case of composite, it is 75 hours training. Such certificate is valid for 3 years. It to be apply thorough Principal Officer of Corporate Agent to authority.

• Memorandum of Association, Deed or bye laws as per the applicant entity nature
• Shareholding pattern of applicant entity
• Directors/partners KYC, Qualification, Shareholding and Directorship in other companies
• Name and activities of associate companies/concerns 
• Name and address of Principal Banker and Statutory Auditor
• Business Plan
• Organization Chart separately showing functional responsibilities 
• Details of infrastructure like office space, equipment and manpower available with applicant
• Audited financial statement, ITR and Auditor report of last three years if the applicant is existing one else unaudited financial statement as on date from Statutory Auditor
• Net worth certificate from Statutory Auditor
• Shareholder KYC, ITR and Net worth certificate to establish the adequacy of capital
• Principal Officer and Specified Person required Academic Qualification Certificate, Training Completion and Certificate of clearance of Examination

Duration:

Approval time frame is often based on the composition of Board, adequacy of capital and quality of documents submitted to Authority. Precisely the applicant entity financial strength, Board of Directors/Principal Officer and Specified Person academic qualification, experience and certification of qualifying examination from Insurance Institute of India, Mumbai plays vital role in processing of an application at fast track. So it takes approx. 3 working month to process out the end to end requirements of IRDAI from date of physical application to Authority at Hyderabad.

The insurance market is huge, opportunity is large and quite scalable as this industry penetration is around 25% only subject to the demography of the nation. Opportunities have been ample if person wants to explore this industry. To begin with, unlike the Agent, Corporate agent gives a better presence at corporate market.

Tie up with a maximum of 3 insurance companies and selling the insurance products on defined remuneration can help any applicant to understand the market and its butter crowd to expand and enlarge further in the market.

Since it can act as entry level segment for people to start with minimum knowledge and upgrade themselves at next level as the opportunity is huge enough to cater public at large though its life, health or general insurance.