NOTE ON CORPORATE AGENT LICENSE FOR BANKERS

1. INTRODUCTION:

The insurance regulatory authority has notified about the regulations to be followed by the corporate agents. The primary purpose behind such regulation is to protect the interests of policyholders.

The matters relating to insurance are regulated by the Insurance Regulatory and Development Authority of India (IRDAI). The authority in consultation with the Insurance advisory committee formed certain regulations for the proper operation of the corporate agents. In this note we shall highlight the regulations for corporate agents under IRDAI.

1. WHO ARE CORPORATE AGENTS?

Corporate agents are entities that sell insurance policies to the customers. The IRDAI (registration of corporate agents) Regulations, 2015 defines corporate agents as any applicant who holds a valid registration certificate issued by the authority for soliciting and serving the insurance business for categories like life, general and health.

1. ELIGIBILITY CRITERIA

The following criteria would apply to secure a Corporate Agent Licence:

• Minimum Capital Requirements

1. 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.

1. 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.

• Applicant

For being registered as a Corporate Agent, the applicant must be the following:

1. A company formed under the Companies Act, 2013 or the company law; or
2. A Limited Liability Partnership under the LLP Act, 2008; or

• A Co-operative Society registered under Co-operative Societies Act; or

1. A banking company; or
2. A corresponding new bank under the Banking Companies Act, 1949; or
3. A regional rural bank established under the Regional Rural Banks Act, 1976; or

• A Non-Governmental organization or a micro-lending finance organization covered under the Co-operative Societies Act, 1912 or a Non-Banking Financial Company registered with the Bank of India; or
• Any other person as may be recognized by the Authority to act as a corporate agent.

• Other Criteria

For the Corporate Agency Licence, the applicant must also satisfy other criteria prescribed as per the regulations:

1. The applicant should not be disqualified under any law in force.
2. The applicant requires possessing adequate office space, equipment, and trained workforce on their rolls to discharge its activities effectively.

• According to the requirements of the Authority, the Principal Office must be a graduate and receive a minimum of 50 hours of practical training according to the syllabus and preparation.

1. The principal officer and the employees must not have violated the code of conduct which is prescribed by the Authority for securing the corporate agency license. This must be during the last three years.
2. If the applicant has a business that is not related to insurance, then it must maintain an arm’s length relationship between the financial matters of the other business and the corporate agency business.
3. The key management personnel must satisfy the FIT and PROPER criteria.

1. DOCUMENTS REQUIRED FOR CORPORATE AGENT LICENSE

• 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

1. THE VALIDITY OF A CORPORATE AGENT LICENCE FOR BANKERS:

The licence is valid for a period of three years and can be renewed for a further period of three years.

1. CONFIDENTIALITY:

All communications between the Parties shall be treated as confidential. We will keep confidential and not disclose to any third party any information or documents received from you, unless otherwise required to be disclosed by law and/or agreed between Parties. For the purposes of the foregoing, “Parties” shall mean the Company and LBA (“Ladda Bhutada & Associates).

1. PROFESSIONAL FEES:

*All government charges and out-of-pocket expenses at actuals.

1. PLACE OF RENDERING SERVICES:

The place of rendering services generally shall be our office situated at Office No. 106, B – Wing Sr. No. 55, Sukhniwas, 15^th August Chowk, Mangalwar Peth, Pune – 411011, Maharashtra, India.

“Our priority is Client’s satisfaction and we believe in maintaining healthy and long-term relations with our clients.”

Kindly sign a copy of the letter/ or mail me at info@csladda.com in token of approval or you may issue separate letter accepting terms and condition of this letter.

Thanking you and assuring best professional services.

For Ladda Bhutada & Associates,

(Company Secretaries)

Pramodkumar R. Ladda

(Partner)