An Insurance Company License gives an individual permission to seek and sell insurance items. The license is issued by the State insurance commissioner for the purpose of seeking and selling the insurance. It is involved in various insurance types, including inability and life, health, auto, or workers' compensation. A person living in one state and selling insurance in another state requires a license for selling insurance in a particular state. A person does not have to go to an enlisted office to obtain an insurance company license, but it is required once he/she plans to work together.
Overview of Insurance Company License
An Insurance Company License authorizes an individual to sell insurance. The State insurance commissioner issues insurance company license to seek and sell the insurance and is involved in various insurance types, including inability and life, health, auto, or workers' compensation. A person living in one state and selling insurance in another state requires a license for selling insurance in a particular state. A person does not have to go to an enlisted office to obtain an insurance company license, but it is required once he/she plans to work together.
The controller of insurance managed the insurance sector before 1999, under the Insurance Act of 1938. But the formation of the Insurance Regulatory Development Authority of India (IRDAI) has brought considerable changes in the insurance sector. The growth of the Insurance Regulatory Development Authority of India (IRDAI) caused peoples to feel the necessity of restitution in the field of insurance. Earlier provisions of the insurance sector were obsolete and were never on point.
All individuals must acquire a certificate from the concerned authority before applying for insurance company licenses. The authorization to be obtained for different insurance classes can be obtained from the Insurance Regulatory Development Authority of India (IRDAI), for instance, fire insurance, marine insurance, life insurance, and so forth. An individual has to keep in mind that the life insurance business will not be connected with some other type of insurance business.
Scope of Insurance Regulatory Development Authority of India (IRDAI)
The preparation of activity of attainment insurance license from IRDAI;
The way toward getting approval of insurance items from IRDAI; and
The methodology for the engagement of the insurance intermediary.
Different Types of Insurance Businesses IRDAI License
Necessary Documents for Insurance Company License
Any person who wants to obtain an insurance company license has to file an application to the Insurance Regulatory Development Authority of India (IRDAI) in form IRDAI/R1 for issuance of demand for the registration application.
Documents that will Support the Application are:
The applicant is a company formed under the Companies Act 2013.
Certified copy of Memorandum of Association
Certified copy of Articles of Association
Information about the directors like name, address, and occupation
Certified copy of annual foreign investors and Indian promoters for the previous five years.
Certified copy of the shareholding agreement between foreign investors and Indian promoters of the applicant.
Five-year business plan accepted by the Board of Directors.
Application for Registration of Insurance Company License
When the authority recognizes the application for demand, the applicant will apply in Form IRDAI/R2 for the registration certificate issuance. The application will contain the associated data:
Application for General Insurance/Life Insurance/Health Insurance
The Evidence articulates that settled up capital value is more than INR 100 crore or more;
Application for Reinsurance Business
The evidence is articulating that settled up capital value is more than INR 200 crore or more;
An affidavit provided by the foreign and Indian promoters confirming that the paid-up equity capital is sufficient after barring preliminary expenses.
Articulation of shareholding enclosing the idiosyncratic number of shares gave to promoters;
WTD, MD, CEO of foreign investors and Indian developers, stating that the holding of remote paid-up equity capital is calculated as referenced under the Indian Insurance Companies Rules of 2015 for Foreign Investments.
FIPB approval if the Foreign Direct Investment exceeds the restricted limit of 26%;
Certified copy of published prospectus;
Certified copy of Memorandum of Understanding (MOU) or any other agreement done by promoters such as shareholder agreement or management agreement or voting agreement or any other agreement type.
A non-refundable payment of INR 5 lakh for the purpose of the expense.
PCS or PCA certificate establishing the consistency of registration charges, value share capital and other requirements of the Act;
The authority in the wake of attaining the application will take into the thought of the nature of insurance items, the extent of bookkeeping, actuarial, and other expert professionals in the administration, the association structure. Authority will conduct an inquiry, and after the authority is satisfied, the applicant's certificate will be issued in Form IRDAI/R3. The authority also has the power to dismiss the application if they do not find the candidate's details for the purpose of acquiring an insurance company license. The information regarding the rejection will be conveyed to the applicant within 30 days from the day rejection order was passed.
The applicant who has successfully acquired an insurance company license must initiate the business activities within 12 months of receiving the license.
Registration Procedure for Obtaining Insurance Company License
An applicant can record an application for extra security, health insurance business, reinsurance business, or general insurance organization.
In the wake of accepting the application, the authority can ask for additional information or explanation identified with the application's consideration.
After accomplishment, the authority might grant approval, and the applicant at that point documents another application in Form IRDAI/R2 for obtaining a registration certificate.
The authority can also reject the application and give an explanation for rejection in hard copy to the applicant.
The applicant can make an appeal against the rejection of the application to the Securities Appellate Tribunal within 30 days from receiving the rejection letter.
Conclusion
An Insurance Company License authorizes an individual to sell insurance. The State insurance commissioner issues insurance company license to seek and sell the insurance and is involved in various insurance types, including inability and life, health, auto, or workers' compensation.