An insurance broker is a person who knows a lot of insurance policies. He has tapped into the insurance market, knows the type of insurance policies that are best for the customers. leveraging all that knowledge, he serves both who seek insurance policy and those who sell it:
- He consults the customers on which insurance policies to buy as per their requirement
- He represents one and if need be, many insurance companies – selling their insurance policies to the right people.
Needless to say, an insurance broker is the one who has hands full of all the cakes. That’s why, if we were you, we would opt to become an insurance broker when we had the chance.
While our time is gone, your chance is still here. Here are the ways you can become eligible for the insurance broker license in India.
Establish your company
First, you need to know who is allowed to have the insurance broker license, and it’s not an individual. For IRDA, the insurance regulatory development authority of India, issuing the broker license is a matter of great importance. It prompts it to take great care when issuing the license. And deciding who to issue the license to, is a big factor. As an individual, regardless of your financial stability, you won’t be able to manage the complexity of the insurance broker business.
That’s why the IRDA has resolved to only give chance to companies to become insurance agents online.
Register your insurance broker business as a company so that you can cross the first eligibility hurdle.
Meet the minimum financial requirements
Finance-wise, your state should be stable enough to run and manage your insurance brokerage company. There are three types of insurance brokers and the IRDA expects each of them to meet their respective minimum financial requirement:
- If you’re a direct insurance brokers, intermediating between insurance companies and customers, your minimum required capital is INR 75 Lakh
- If you’re reinsurance broker, intermediating between insurance companies and reinsurance firms, your minimum required capital is INR 4 Crore.
- If you’re a composite broker, a combination of a direct and an reinsurance broker, your minimum required capital is INR 5 Crore.
Meet the minimum net worth requirements
The minimum capital requirement is how much you’ve initially put in the business. Your minimum net worth is the net worth of the insurance broker company. IRDA regulations for the minimum net worth as per the types of insurance brokers are as follows:
- For Direct brokers, the net worth requirement is set to INR 50 lakh.
- For the reinsurance brokers and the composite brokers, the net worth requirement is set to 50% of capital invested. For instance, if the net capital is INR 10 Crore, the net worth requirement is INR 5 Crore.
Meet the deposit requirements
Depositing a certain amount as collateral is part of the procedure to obtain the insurance broker license. As per the different types of brokers, the deposit requirements are as follows:
- Aspirants of the Direct insurance broker license need to deposit INR 10 Lakhs.
- Aspirants of the reinsurance or composite broker license need to deposit 10% of their overall capital.
As you can see, much of what makes you eligible for the insurance broker license is your financial stability. Think of these points as part of the Insurance Broker License cost that you need to bear.
If you’re ready to bear those finances, it means you’re ready to become a broker. And that means you’d need all the help you need to obtain the license.
Contact registration for help.
You must gain eligibility to become an insurance broker. This blogs lists the eligibility criteria and gives you hints about how to meet each of them. For more info, contact registrationwala.