Insurance Company License

An insurance company license gives the person an authority to seek and sell insurance items. State insurance commissioner is responsible to issue the license for the purpose of seeking and selling the insurance and is isolated into various insurance types, including life and inability, health, auto or worker’s compensation. For anybody living in one state and selling insurance in neighbouring states needs a license for each particular state. You don't have to subsidise with an enlisted office to get the license, however this is required once you plan to work together.

Before 1999, Controller of Insurance managed the insurance sector of our country under the Insurance Act 1938. But the formation of IRDA has brought significant changes in the insurance sector. Development of IRDA caused individuals to feel the necessity of renewal in the field of insurance company license. Earlier provisions of the insurance sector were outdated and beside the point.

It is compulsory for all elements to gain a Certificate from the Authority before applying any insurance company license. The permit to be obtained for different classes of insurance can be acquired from the IRDA, for instance Life Insurance, Fire Insurance, Marine Insurance and so forth. In any case, it is to be remembered that the life insurance business will not be joined with some other sort of insurance business.

Scope of IRDA

  • The arrangement of activity of getting license of insurance from IRDA;
  • The way toward getting approval of insurance items from IRDA; and
  • The methodology for appointment of insurance intermediary.

Documents Required to Obtain Insurance Company License

A candidate who wants to obtain insurance company license needs to file an application to the IRDAI in form IRDAI/R1 for an issuance of a demand for the registration application.

Documents That Will Support The Application Are:

  • Applicant is a company formed under Companies Act 2013
  • Certified of MOA and AOA
  • Details of the directors such as- name, address and occupation
  • Certified copy of the annual report of Indian promoters and foreign investors for the preceding last five years
  • Certified copy of the shareholding agreement between Indian Promoters and foreign investors of the applicant
  • Five-year business plan accepted by the Board of Directors

Application for Registration of Insurance Company License

When the authority acknowledges the application for demand, the candidate will apply in Form IRDAI/R2 for the issuance of certificate of registration.

The Application Will Contain The Accompanying Data:

Application For Life Insurance/General Insurance/Health Insurance

Evidence expressing that settled up value capital is more than Rs. 100 crore or more;

Application For Reinsurance Business

  • Evidence is expressing that settled up value capital is more than Rs. 200 crore or more;
  • An affidavit provided by the Indian and foreign promoters affirming that the paid up equity capital is sufficient enough after barring preliminary expenses.
  • Articulation of shareholding containing the distinctive number of shares gave to promoters;
  • CEO, MD, WTD of Indian developers and foreign investors stating that the holding of remote paid-up equity capital is being calculated as referenced under the Indian Insurance Companies (Foreign Investment) Rules, 2015 read with different principles identified with it.
  • FIPB approval if the FDI surpasses the restriction of 26%;
  • Certified copy of published prospectus;
  • Certified copy of MOU or any kind of agreement entered between the promoters such as-management agreement or shareholder agreement or voting agreement or any other kind of agreement;
  • Confirmation of payment of expenses of rupee five lakh, which is non-refundable;
  • PCA or PCS certificate affirming the consistence of registration charges, value share capital, other demands of the Act;

The authority in the wake of getting the application will take into the thought of the nature of insurance items, the degree of actuarial, bookkeeping and other expert specialists in the administration, the association structure. The authority will issue the certificate to the applicant in Form IRDAI/R£ after conducting an inquiry and feeling satisfied. The Authority may dismiss the application in the event they don’t feel contended with the data gave by the candidate for the purpose of obtaining insurance company license.

The rejection will be conveyed to the candidate within the thirty days from the day of the order of rejection went with the ground of rejection. A candidate can speak to SAT within 30 days of receipt of dismissal order.

The candidate who has received the certificate of insurance company license must commence its business within 12 months of getting the certificate.

Registration Procedure of Obtaining Insurance Company License

  • A candidate can record an application for extra security or General Insurance organization or Health Insurance Business solely or Reinsurance Business.
  • In the wake of accepting an application, the Authority may ask additional data or explanation identified with the thought of an application.
  • After fulfilment, the Authority may concede approval and candidate at that point document a further application in Form IRDAI/R2 for award of certificate of registration.
  • The Authority may dismiss the application for issuance of an order for an registration form by recording the explanation recorded as a hard copy.
  • A candidate who is wronged by the choice will record an intrigue to Securities Appellate Tribunal inside 30 days of dismissal correspondence got.

Circumstances under which an applicant is not eligible to file an application under IRDAI/R1

  • In case the authority has rejected your request for registration
  • If foreign investors or Indian investors has decided to leave the project for any reason
  • Time during the preceding two financial years from the date of requisition for registration application
  • The Authority has dismissed the application for registration or pulled back by the candidate under any conditions whenever during the former two monetary years from the date of order for registration application;
  • If controlling authority has abandoned your Certificate of Registration;
  • In case applicant’s name does not have the word ‘insurance’ or ‘assurance’

Suspension of Certificate of Insurance Company License

  • Neglects to conform to the arrangements of the activities identified with the estimation of benefits and liabilities.
  • The insurer is in liquidation or is declared as a wiped out.
  • The business or a class of the matter of the guarantor has been moved to any individual or has been moved to or amalgamated with the matter of some other safety net provider without the approval of the Authority.
  • Default in consenting the provisions of the Act, or Rule or Regulations or direction or order gave by the Authority.
  • Any case stays unpaid for over 3 months after the judgment is passed in court.
  • Insurer conveys business other than Insurance business or recommended business.
  • Defaults in consenting to the necessity of Companies Act, 2013, General Insurance Business Act, 1972 or Foreign Exchange Management Act, 1999 or Prevention of Money Laundering Act, 2002.
  • Neglects to pay the yearly charges determined under Act.

Don't keep questions to yourself reach out to us

office@shubhampahujaassociates.com