The Controller of Insurance under the Insurance Act, 1938 regulated the insurance sector in our country until 1999. After the formation of IRDA people felt the need for renewal in the arena of insurance because most of the earlier provisions were irrelevant in the present context.
The following aspects of importance in the arena of insurance are covered under the latest IRDA regulation:
- The plan of operation of obtaining a license of insurance from IRDA;
- The process of acquiring authorization of insurance products from IRDA; and
- The procedure for the appointment of an insurance intermediary.
Process of granting a license to companies to start an Insurance business in India:
Before carrying out any insurance business in India it is mandatory for all entities to acquire a Certificate from the Authority. The license required for various insurance categories such as Life insurance, Marine Insurance, Fire Insurance, etc. can be procured from the IRDA but it is to be understood that the life insurance business shall not be combined with any other type of insurance. The insurers exempted from obtaining the license under the previous Act were covered under this Act and even the old players in this arena had to obtain a fresh certificate within 3 months from the date of commencement of this Act.
Documentation required for IRDA Registration Certificate:
1. First Stage
- Request for acquiring the Certificate of Registration to IRDA in the form prescribed under IRDA/R1;
- Certified copy of Memorandum of Association and Articles of Association;
- Complete profile including the name, address, and occupation of all the directors and shareholders of the company;
- Statement regarding the sources of capital funds.
- Statement regarding the class of insurance business proposed to be carried on.
The screening of primary appeal would be done by IRDA and some additional information may be asked for. Authority may even appoint a Principal Officer for seeking any information or clarification on their behalf.
2. Second Stage
- May require to submit an additional application the prescribed Form IRDA/R2 with the following documents;
- Every entity shall deposit either in securities or in cash or partly in securities and partly in cash, the following;
- 3% of the total gross premium return in India in the previous year which shall not exceed a sum of INR 10 crores in case of the general insurance business;
- A total sum of INR 20 crores in case of reinsurance business;
- A sum of INR 1 lakh in case of marine business;
- The certificate showing the amount deposited with the RBI.
- Statement of declaration from the Principal officer about the fulfillment of Minimum Capital Requirement (A capital requirement for a reinsurance business shall be 20 crores and 10 crores for life insurance as well as general insurance.
- Actuary certificate regarding the interest rate.
- A deposit of INR 50,000 for each class of business.
- The Certified copy of the Memorandum of Understanding between the Indian and Foreign Promoter in case any foreign promoter is involved.
Conditions for Grant of Registration Certificate:
- Receipt of the application by IRDA and on fulfillment of the following conditions;
- The general character of the management and sound financial condition;
- Adequate capital structure, volume, and earning prospects of the applicant company;
- Fulfillment of the interest of the general public.
Grounds for Refusal of Registration:
- Delay in providing information;
- Improper or inadequate information;
- Improper conduct of the management;
- Non-fulfillment of capital requirements;
- Any other as decided by the Authority.
An appeal against Refusal of Registration:
Aspirant can appeal before the Central Government within 30 days from the date on which a copy of refusal decision from the Authority is received and in case of the Insurance registration, the decision of the government shall be final and cannot be appealed against in any court of law.
Grounds for Cancellation of Registration:
The Authority reserves the right to cancel the registration either wholly or in part in case:
- The applicant is involved in more than one insurance business; or
- Any conditions for registration not compiled with.
Renewal of Registration:
The renewal of registration shall only be done annually and the application for renewal shall be made before 31st December of the preceding year following which the renewal is sought for, along with the fees as below:
- The fees should not be less than INR 50,000 for each class of insurance;
- For reinsurance companies, 0.25% of the premium received in India during the year;
- The renewal fees shall be paid to the RBI.
If you want to register for an IRDA insurance License, HBF Direct Ltd. can help you with the entire process and make it a seamless experience for you. Contact us if you have any queries!