Corporate Agent License

Overview of Corporate Agent License

As per the IRDAI (Insurance Regulatory and Development Authority of India) Regulations 2015, registration of corporate insurance agents is compulsory. This regulation came into effect on 1 April 2016 and since then several company representatives have been registered under the above provisions.

A company representative is typically an organization or company that represents the interests of an insurance company. Company representatives therefore act in the best interest of the insurance company. There are some guidelines that company representatives must adhere to. Company agents not only represent the interests of insurance companies, they also sell the insurance companies’ policies. To represent an insurance company, a corporate agent must obtain a corporate agent license. A corporate agent license is required for an organization to act as a corporate agent. When a company sells motor insurance on behalf of an insurance organization, it acts as an agent for the insurance organization.

Both corporations and banks can obtain corporate agency licenses. Receipt of this license by a bank therefore represents the interests of the insurance organization. This arrangement is known as a bancassurance or partnership. Financial institutions offer insurance packages based on customer needs. Company representatives can represent life insurance companies, property and casualty insurance companies, and medical insurance companies.

Type of Corporate Agents

1. Corporate Agent (Life): A Corporate Agent for Life Insurance can have arrangements with a maximum of three life insurers to solicit, procure and service their insurance products.
2. Corporate Agent (General): A Corporate Agent for General Insurance can have arrangements with a maximum of three general insurers to solicit, procure and service their insurance products.
3. Corporate Agent (Health): A Corporate for Health Insurance can have arrangements with a maximum of three health insurers to solicit, procure and service their insurance products.
4. Corporate Agent (Composite): In the case of a Corporate Agent for Composite insurance, the above-mentioned conditions will apply.

Eligibility criteria for Corporate Agent License in India

Scope of Corporate Agent

Corporate Agents are companies that solicit, procure, and provide service to different forms of insurance businesses.  Once a corporate agent obtains the licence, they can serve life insurance business, non-life insurance business, and health insurance business.

1. A Corporate Agent for a life insurance business can have arrangements with only three life insurers to advertise, solicit, and procure different insurance products.
2. A Corporate Agent for a general insurance business can have arrangements with only three general insurers to solicit, advertise, and procure different types of insurance products on behalf of the business. The corporate agent for this type of business would only solicit, service, and procure retail and commercial insurance products for insurers whose risk does not exceed Rs. 5 Crore. This amount is the sum of individual insurance amounts.
3. Corporate agent for health insurance can have arrangements only with three health insurers to advertise, procure, and service their products.
4. Corporate agent for a composite insurance can have arrangements with a composite insurance provider for three years.

If there is any change in the arrangement related to the insurance policies, then prior permission is required from the Insurance Regulatory and Development Authority of India.

Why You Need a Corporate Agent License

1. To ensure that company representatives are acting on behalf of the insurance company.
2. To advertise products on behalf of insurance companies.
3. We act in the best interests of life insurance, property and casualty insurance and the
4. property and casualty insurance business.
5. This license is necessary to provide adequate regulation for the insurance business.

Who regulates corporate agency licenses?

1. The main regulatory body for corporate agency licenses is the Insurance Regulatory and Development Authority of India (IRDAI).
2. The Insurance Act 1938 and the Insurance Regulation and Development Act 1999 are insurance related regulations.
3. The Corporate Agents Regulation Act is the Insurance Regulatory and Development Authority of India (Registration of Corporate Agents) Regulations, 2015.

Minimum capital requirement

1. An applicant with an insurance distribution business must have an equity capital or contribution and net worth of Rs. 50 Lakhs. The net worth requirement has to be maintained by the company at all times.
2. For applicants in the insurance sales sector, the foreign investor’s capital contribution or capital contribution is stipulated by the central government.

Applicant

To register as a company representative, an applicant must:

1. Companies established under the Companies Act 2013 or the Companies Act. or
2. Limited Liability Partnership under the LLP Act 2008. or
3. A cooperative registered under the Cooperatives Act. or
4. bank company. or
5. A corresponding new bank under the Banking Corporations Act 1949. or
6. A regional bank established based on the 1976 Regional Banking Act. or
7. Any non-governmental organization or microcredit lending organization falling under the Cooperatives Act, 1912, or a non-bank financial company registered with the Bank of India. or
8. Any other person recognized by the authorities as a company representative.

Other criteria

1. For a sales agent license, applicants must also meet other statutory criteria.
2. Applicants should not be disqualified under applicable law.
3. Applicants must have sufficient office space, equipment and a trained workforce to effectively carry out their activities.According to the agency’s requirements, the principal must have a college degree and undergo at least 50 hours of her on-the-job training according to curriculum and preparation.
4. Officers and employees must not violate any code of conduct required by the agency to obtain an agency license. This should have happened in the last three years. If the applicant operates a business unrelated to insurance, it must maintain an independent relationship between the financial operations of the other business and the corporate brokerage business.
5. Key management personnel must meet FIT and PROPER criteria.

 

Documents required to obtain an Corporate Agent License

1. Submit relevant information on FORM A, if required.
2. Submit the required fees electronically in accordance with regulation 17 of the IRDAI (Registration of Company Representatives) Regulations, 2015.
3. Submission of the applicant’s incorporation documents (the Articles of Incorporation and Articles of Incorporation, respectively).
4. A statement regarding the eligibility and suitability criteria of the Chief Officer, Directors and Managing Partners (separately for each individual) provided on the “Eligibility and Suitability Form” set out in the Appendix.
5. Supporting evidence such as infrastructure details, ownership/rental documentation of office space/equipment/trained staff. Headquarters and branches are in different locations.
6. Expected his three-year income statement, income statement and balance sheet form projections of administrative expenses, salaries, wages and other expenses.
7. An organizational chart that provides a complete overview of the company’s activities including IT, underwriting, risk assessment, claims handling, marketing, accounting and back office.
8. The board has approved an open architecture policy.
9. Other records of information relating to the nature of services provided by applicants for the growth and promotion of insurance business.
10. Any other requirements deemed necessary by the authorities

FAQs About Corporate Agent License?