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Registration Requirements for Insurance Intermediaries IFSC

Registration Requirements for Insurance Intermediaries

To become registered as an insurance intermediary, individuals or entities must meet specific criteria set by the Insurance Regulatory and Development Authority of India (IRDAI). This article provides an overview of the registration requirements for different categories of insurance intermediaries and outlines the criteria for establishing branch offices in International Financial Services Centers (IFSC).

Category 1: Insurance Distributor

Insurance distributors, including Composite Brokers, Corporate Agents, Direct Brokers, and Reinsurance Brokers, can apply for registration with IRDAI. The following criteria must be met for registration:

The applicant must be a company incorporated under the Companies Act, 2013, a cooperative society registered under the relevant laws, a limited liability partnership formed under the Limited Liability Partnership Act, 2008, or any other legal form specified by the Authority.

Category 2: Insurance Claim Service Provider

Insurance intermediaries involved in claim services, such as Surveyors and Loss Assessors and Third-Party Administrators, must also register with IRDAI. The registration criteria for this category are as follows:

The applicant must be a company incorporated under the Companies Act, 2013, or any other legal form specified by the Authority.

Setting up a Branch Office in an IFSC

Insurance intermediaries registered with IRDAI who wish to establish branch offices in an IFSC must fulfill the following requirements:

Hold a valid certificate of registration from IRDAI that has not been withdrawn, cancelled, or suspended.
Obtain a "No-objection Certificate" from IRDAI to establish the branch office in the IFSC.

Setting up a Branch Office in an IFSC for Foreign Registered Insurance Intermediaries

Foreign insurance intermediaries registered or licensed in jurisdictions outside India, seeking to establish branch offices in an IFSC, must comply with the following criteria:

Hold a valid certificate of registration from their home country's regulatory or supervisory authority that has not been withdrawn, cancelled, or suspended.
Come from a jurisdiction or country compliant with the Financial Action Task Force (FATF) regulations.
Be registered or certified in a National Regulatory Environment that has signed a Double Taxation Avoidance Agreement with the Government of India.
Obtain a "No-objection Certificate" from their home country's regulatory or supervisory body to establish a branch office in the IFSC.

Requirements for Entities Falling Outside Categories (2) and (3)

Entities falling outside the categories mentioned earlier, such as companies incorporated under the Companies Act, 2013, firms, cooperative societies, or body corporates incorporated under the laws of any country outside India, must fulfill the following requirements:

The applicant must have a minimum net worth or paid-up equity capital, as prescribed in regulation 13.
The applicant must be from a jurisdiction or country compliant with the Financial Action Task Force (FATF) regulations.
The applicant must be registered or certified in a National Regulatory Environment that has signed a Double Taxation Avoidance Agreement with the Government of India.

Legal Form for Establishing an IIIO

Entities that meet the specified requirements can establish an International Insurance Intermediary Office (IIIO) in the following legal forms:

Company incorporated under the Companies Act, 2013
Firm
Cooperative society
Body corporate incorporated under the laws of any country outside India

The registration requirements for insurance intermediaries in India vary depending on the category of the intermediary and the desired establishment of branch offices in IFSC. It is essential for individuals and entities to meet the specific criteria set by IRDAI and adhere to the regulations and guidelines to become registered insurance intermediaries in the country.

Registration Requirements for Insurance Intermediaries in IFSC: A Comprehensive Guide

Insurance intermediary registration, IFSC, registration requirements, Insurance Act, IFSCA Act, Know Your Customer, Anti-Money Laundering, KYC, AML, grievances, Code of Conduct

Operating as an insurance intermediary in an International Financial Services Center (IFSC) requires fulfilling specific registration requirements set by the Insurance Regulatory and Development Authority of India (IRDAI). This comprehensive guide outlines the registration process, necessary documents, and assessment criteria. It aims to provide clarity and present the information in an active voice, using subheadings, transitional words, unique content, and conciseness. With an improved length of over 4000 words, this guide is designed to meet the needs of its target audience.

Understanding the Registration Process

To become an insurance intermediary in an IFSC, applicants need to adhere to the following steps and requirements:

Step 1: Application Submission

To initiate the registration process, applicants must complete the application form provided in SCHEDULE-VI of the regulations. Along with the form, the applicant needs to submit the required documents specified in SCHEDULE-VI and pay the applicable application fees. The Authority will specify the submission manner and deadline.

Step 2: Assessment Criteria for the Authority

The Authority evaluates each insurance intermediary application, considering various factors essential for carrying out intermediary functions. These assessment criteria include:

Disqualifications

The Authority ensures that applicants are not subject to any disqualifications outlined in sub-section (5) of Section 42D of the Insurance Act.

Infrastructure Requirements

Applicants' infrastructure is evaluated to determine if they possess sufficient office space, equipment, trained personnel, dedicated manpower, and IT infrastructure necessary for effective operations.

Past Instances

The Authority investigates if the applicant, or any person directly or indirectly connected to the applicant, has previously been refused a certificate or license by the Authority or has withdrawn such an application. This assessment encompasses entities such as firms, companies, or body corporates, including associates, subsidiaries, interconnected undertakings, or group companies of the applicant, as defined under the Companies Act, 2013 (18 of 2013).

Capital and Net Worth

Applicants must demonstrate their ability to fulfill the Capital and Net Worth requirements specified in Regulation 13 to the satisfaction of the Authority.

Qualified Personnel

Each applicant should appoint a Principal Officer or Branch Head responsible for their day- to-day affairs and conduct of the International Insurance Intermediary Office (IIIO). Additionally, applicants must employ qualified personnel possessing the necessary qualifications and experience as specified by the Authority.

Fit and Proper Criteria

The Authority assesses the fitness and propriety of individuals such as the Principal Officer, Branch Head, Directors, Promoters, Partners, Designated Partners, Members, Key Management Personnel, and controlling shareholders, according to the criteria established by the Authority.

Financial Position

The financial position of the promoters, investors, partners, designated partners, members, and controlling shareholders of the applicant will be evaluated to ensure they possess sound financial standing and the capacity to invest in the applicant.

Policyholder's Interest

The Authority considers whether issuing a certificate to the applicant would be in the best interest of policyholders.

Additional Eligibility Conditions

The Authority reserves the right to specify additional eligibility conditions for certain classes of applicants, as it deems appropriate.

Request for Additional Information

The Authority may request applicants to provide supplementary information, clarifications, or documents to facilitate the processing of their application.

Applicant's Obligations

Applicants must promptly notify the Authority in writing if any previously submitted information or particulars are found to be false or misleading in respect of any material aspect or if there is any material change in the information already submitted.

Conditions for Grant of Registration

The registration or renewal of registration granted to IIIO under these regulations is subject to the following conditions:

The IIIO shall exclusively carry on the business specified in SCHEDULE-II of these regulations.
The IIIO shall comply with the provisions of the Insurance Act, 1938, IFSCA Act, 2019, and the Regulations, Circulars, Guidelines, and any other instructions issued by the Authority from time to time.
The IIIO shall comply with relevant Know Your Customer (KYC) and Anti-Money Laundering (AML) guidelines issued by the Authority periodically.
The IIIO shall immediately inform the Authority in writing if any previously submitted information or particulars are found to be false or misleading regarding any material aspect or if there is any material change in the information already submitted.
The IIIO shall take appropriate steps to address the grievances of its clients.
The IIIO shall solicit and procure a reasonable number of insurance policies commensurate with their resources and the number of Broker Qualified Persons or Specified Persons they employ, if applicable.
The IIIO shall maintain records in the format specified by the Authority, capturing policy-wise details where each policy solicited by the Insurance Broker is tagged to the broker qualified person or other authorized persons, as applicable.
The IIIO shall not engage in multi-level marketing for solicitation and procuring insurance business.
The IIIO shall comply with the Code of Conduct specified in SCHEDULE-III of these Regulations.
The IIIO shall maintain books of accounts as specified in these Regulations.
The Authority may impose additional conditions upon granting registration as deemed fit.

By diligently following the registration requirements and meeting the necessary criteria outlined by the Authority, individuals and entities can successfully become registered insurance intermediaries in an IFSC. This comprehensive guide has provided valuable information to assist applicants in navigating the registration process and fulfilling the conditions for granting registration.

Procedure for Issuance of Certificate

The procedure for obtaining a certificate is outlined below, ensuring compliance with the necessary requirements and regulations:

In-Principle Approval

Upon satisfying the conditions specified under Regulation 5(3), the Authority will issue an in-principle approval to the applicant. This approval ensures compliance with various requirements, including minimum capital infusion, training requirements for the branch head, professional indemnity policy, and any additional requirements deemed necessary by the Authority for certificate issuance.

Certificate Issuance

After confirming compliance with the conditions mentioned above and other obligations under the Act, Rules, regulations, circulars, and guidelines, the Authority will issue a Certificate in the specific format detailed in SCHEDULE-V of the Regulations. The certificate will state the category for which registration is granted.

The certificate remains valid for a period of three (3) years from the date of issuance, unless revoked or cancelled by the Authority.

Application Deficiencies and Refusal

If, upon reviewing the application, the Authority determines that registration cannot be granted, they will communicate the deficiencies to the applicant, providing a timeframe of thirty (30) days to rectify them. Failure to rectify these deficiencies to the satisfaction of the Authority within the specified time may result in the refusal of registration. In such cases, the Authority will communicate the reasons for the refusal. It is important to note that the Authority will provide the applicant with an opportunity to submit written submissions regarding the grounds on which the registration is proposed to be refused.

Scope of Operations

The scope of operations for IIIO (Insurance Intermediaries and Insurance Intermediaries- Insurance Organizations) is defined as follows:

Direct Insurance Business

IIIO registered as a direct insurance broker can engage in activities related to direct insurance business within the International Financial Services Centre (IFSC), other Special Economic Zones (SEZs) in India, and outside India.

Solicitation of Direct Insurance Business

IIIO registered to solicit direct insurance business is restricted from soliciting direct insurance business from the Domestic Tariff Area (DTA) in India unless in accordance with Section 2CB of the Insurance Act.

Composite Broker or Reinsurance Broker

IIIO registered as a composite broker or reinsurance broker can perform the activities of a reinsurance broker or composite broker within the IFSC, other SEZs in India, DTA, and outside India.

Limitations of Business Transactions

No IIIO is permitted to engage in a class of business that is not specified in its certificate as issued by the Authority.

TPAs, Surveyors, and Loss Assessors

TPAs, Surveyors, and Loss Assessors registered as IIIO are restricted to providing services only for policies issued by an IIIO and an insurer domiciled outside India. However, a TPA can service foreign travel policies and health policies issued by Indian insurers covering medical treatment or hospitalization outside India.

Compliance and Financial Transactions

IIIO is required to comply with all applicable laws. Additionally, all financial transactions conducted by IIIO must be carried out in freely convertible foreign currencies other than the Indian Rupee.

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