ELIGIBILITIES REQUIRED TO GET AN INSURANCE BROKER LICENSE
Insurance brokers came into existence the world about twelve decades back and in India as recently as 2002–2003. Insurance brokers are essentially the matchmakers between insurance providers and their clients' feed retail or are they corporate. The definition says that there is a go-between, between the insurance companies and the clients. Insurance brokering is a different concept when compared to agents. In India, we used to do go with the agency model. Agents, brokers they’re all intermediaries so the large intermediary network which operates so, the insurance company and is in short which is the policyholder.
The agents represent the insurance companies. For example, if I am an agent then I will be an agent who talks about that company’s product, whereas interestingly a broker does not represent any insurance company. The broker represents the insurance and their job is to go out and talk to the customer and ask them what they want to accomplish or are they planning for insurance for risks like, for their life or maybe for their health or vehicle or anything which they need and this depends on the personal intention. Maybe for an employee or benefits-related programs for their liability program whatever the customer needs are these insurance brokers represent the customers’ actual needs.
Insurance is all about terms and conditions. So, people need to understand that when they are buying a solution for themselves that solution relates to looking at the premium but, more importantly, it is the terms and conditions forward devices. This shows that they are representing customers and the best part is all the intermediate are regulated their brokerage and commissions are fixed on the upper end by the regulator and these insurance brokers stay neutral and they would be agnostic to what customers nearly will go and find out what is the best solution for them and whichever insurance companies the customer decides. Finally based on the offerings and the choices which we offer then based on premium terms and conditions etc., then the insurance company will pay brokerage premium as the brokerage part.
Eligibilities required to provide an insurance brokerage for a company
The Indian government has provided requirements for ensuring an insurance broker license in a minimal way. Mainly brokerage has to be registered with the insurance regulatory and development authority of India that is IRDAI. Companies established under the companies act 2013 or company law 1956 can be applying for insurance brokerage. Even the companies established under the limited liability partnership act 2008 can be applying. Co-operative society act 1913 and any other individual or company that is allowed to contact the business related to an insurance broker. These companies have to satisfy brokers’ licenses. Brokers license is — INR 75 lakhs fee for the direct broker, INR 4 Crores for Reinsurance broker, INR 5 crore for brokerage composition. INR 50 all rupees is a minimum brokerage fee. The applicant should satisfy the infrastructure such as office space, equipment Al, manpower, and so on. There should be two qualified people. They should have crucial training to function as insurance brokers. The key management executive should be the principal officer of the company. He must retain the crucial certificate and skills for carrying out the insurance broker business. The business purpose should be mentioned in the objective paragraph of the Articles of Association that is AOA and Memorandum of association that is MOA. Foreign investors are also eligible to take the Insurance Brokerage.
Conclusion- Insurance Regulatory and Development Authority IRGD manages the operations of an Insurance broker license as well as the functions related to it. An applicant should be a qualified expert and professional who works with the motive and he should at least deposit some amount and it is mandatory.
