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Insurance Broker License
Entry posted by Adviso in Insurance Broker License
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Insurance Broker License
An insurance broker serves as an aid to insurance companies as they help sell their insurance products to potential customers. They play a vital role in maximizing their sales by suggesting apt products to end-users based on their requirements. In response, the insurance companies pay the mutually agreed commission to the broker. The terms insurance broker and insurance agent are often used interchangeably, which is technically incorrect.
Types
1. Direct Brokers
Licensed by IRDAI, direct brokers offer advisory services to clients, sorting, orchestrating, and advising insurance policies with insurers. Their key role involves staying updated on the prevailing market trends, maintaining paperwork, and helping with claims negotiation. The minimum capital requirement for Direct Broker registration has been capped at Rs 75 lakhs.
2. Reinsurance Brokers
Reinsurance brokers bridge the direct insurers and reinsurers by arranging contracts. They work at the forefront, allowing either party to focus on other key areas. Their primary role involves negotiating contracts and finding apt policies. IRDAI demands a minimum capital requirement of Rs 4 Crore for such a registration.
3. Composite Brokers
As the name suggests, a composite broker serves a dual function, one being a direct broker and another being a reinsurance broker. IRDAI specifies Rs 5 crore as a minimum capital requirement for such a registration.
Eligibility Criteria and Procedure to Apply
- Partnership under the Limited Liability Partnership Act, 2008.
- Co-operative society under the Co-operative Society Act, 1912.
- Company established under the Companies Act, 2013.
- Any individual recognized by IRDAI to carry on insurance broker business.
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