Sub: Note on Corporate Agent License
A) Introduction:
A corporate agent is usually an organization or a company that represents the interest of an insurance company. Therefore, a corporate agent acts in the best interest of the insurance company. There are several guidelines required to be adhered to and followed by a corporate agent. The corporate agent not only represents the interest of the insurance company but also sells the policies of the insurance company. To operate on behalf of the insurance company, a corporate agent would require obtaining a corporate agency license.
B) Definition of Corporate Agent?
Corporate agent means any applicant specified in point D holds a valid certificate of registration issued by the Insurance Regulatory and Development Authority of India for solicitation and servicing of insurance business for any specified category of life, general and health.
C) Categories of Corporate Agents :
D) Scope of Corporate Agent:
Corporate Agents are companies that solicit, procure, and provide service to different forms of insurance businesses. Once a corporate agent obtains the licence, they can serve life insurance business, general insurance business, and health insurance business.
a) A Corporate Agent (Life), may have arrangements with a maximum of three life insurers to solicit,procure and service their insurance Products.
b) A Corporate Agent (General), may have arrangements with a maximum of three general insurers to solicit, procure and service their insurance products.
Further, the Corporate Agent (General) shall solicit,procure and service retail lines of general insurance products and commercial lines of such insurershaving a total sum insured not exceeding Rs.5crores per risk for all insurances combined.
c) A Corporate Agent (Health), may have arrangements with a maximum of three health insurers to solicit,procure and service their insurance products.
d) Corporate agent (Composite) may have arrangements with a composite insurance provider for three years.
If there is any change in the arrangement related to the insurance policies, then prior permission is required from the Insurance Regulatory and Development Authority of India.
E) Eligibility Criteria
The following criteria would apply to secure a Corporate Agent Licence:
Minimum Capital Requirements
- An applicant with an insurance distribution business must have an equity capital or contribution and net worth of Rs. 50 Lakhs. The net worth requirement has to be maintained by the company at all times.
- For an applicant in the area of insurance distribution, the aggregate holding of equity shares or contributions made by the foreign investor will be prescribed by the central government.
Other Eligibility requirements:
a) Having passed minimum of l2th Class or equivalent examination from a recognized Board/Institution:
b) (i) The specified person shall have undergone at least 50 hours of training’ for the specified category of life, general, health for which registration is sought for, from an approved institution andshall have passed the examination conducted by the examination body;
(ii) The specified person of corporate agent (composite) shall have undergone at least 75hours of training from an approved institution and shall have passed the examination conducted by the examination body;
c) The specified Persons engaged by the corporate agent to solicit and procure insurance business shall have valid certificate issued by the authority, as specified in these Regulations. The certificate shall be valid for a period of three years from the date of issue subject to the valid registration of the Corporate Agent.
d) The applicant should not be disqualified under any law in force.
e) The applicant requires possessing adequate office space, equipment, and trained workforce on their rolls to discharge its activities effectively.
f. The key management personnel must satisfy the FIT and PROPER criteria.
F) Registration Process:
(1) An applicant desiring to obtain a Certificate of Registration to act as acorporate agent is either –
(i) An entity whose principal business is other than distribution of insurance products and insurancedistribution is a subsidiary activity;
(ii) An entity whose principal business is to exclusively carry on insurance intermediation.
(2) The applicant shall make an application in Form A to the Authority with requisite fees.
(3) An applicant registered or licensed by any other regulatory body in the financial sector, shall obtain noobjection certificate from the respective bodies and file along with the application made under sub-regulation(2) above.
(4) An application under Form A shall be made for any one of the below categories, namely: – a. Corporate Agent (Life); b. Corporate Agent (General); c. Corporate Agent (Health) d. Corporate Agent (Composite)
(5) The applicant along with the group entities of the applicant would be granted the certificate for registration. However, the applicant or any other entity must not be doing another business such as a Corporate Agent, insurance marketing firm, insurance brokering, or corporate agency firm.
If an entity is already in the business of insurance intermediation, then the application would be considered on the merits and there must not be any form of conflict of interest between the businesses.
(6) The application for granting the corporate agent licence will be rejected if it does not confirm the requirements.
(7) The Authority may request from the applicant further information and documents.
G) Documents required for Corporate Agent Licence:
- Submission of relevant information as required in the FORM A.
- Remittance of requisite fee by electronic mode as prescribed under Regulation 17 of IRDAI (Registration of Corporate Agent) Regulations, 2015.
- Submission of charter documents of the applicant (Memorandum and Articles of Association/Byelaws as the case.
- Declaration of Fit & Proper criteria from Principal Officer, Directors and Managing Partners (separately for each person) to be provided in the ‘Fit and Proper Form as per annexure .
- Details of infrastructure, supporting evidence thereof like ownership/lease agreement papers about office space/ equipment/ trained workforce, etc. for the registered office and the branch offices at various locations.
- Projections of administrative expenses, salaries and wages, and other expenses, draw the revenue account, the profit and loss account and the balance sheet for the projected three years.
- Organization chart giving a complete picture of the company’s activities like IT, underwriting, risk assessment, claims settlement, marketing, accounts, back office, etc.
- Board approved policy on open architecture.
- Any other record of information relevant to the nature of services rendered by the applicant for the growth and promotion of insurance business.
- Any other requirements as deemed necessary by the Authority.
H) Validity of Registration:
A registration once issued shall be valid for a period of three years from the dateof its issue, unless the same is suspended or cancelled pursuant to these regulations.
PLACE OF RENDERING SERVICES.
The place of rendering services generally shall be our office situated at 2nd Floor, 496/B, Om Apartment, Near KCC Classes, KasbaPeth, Pune – 411 011, Maharashtra, India.
Pramodkumar R. Ladda
Company Secretary & Insolvency Professional
Tel: +91-20-24570055 | Office Cell : +91- 9284293227, 9309845448, 8080051671 |
Personal Mob. : +91- 7972422151, 9595271145 |
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