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Insurance Company Registration In India: Eligibility, Procedure & Renewal

Are you looking for insurance company registration in India? Learn all the requirements, procedure & eligibility requirements to be met by IRDAI (Insurance Regulatory Development Authority of India).

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insurance company registration in india

Insurance Company Registration in India

The insurance market in India has grown significantly in recent years compared to the previous year, and is anticipated to grow substantially in the decades to come. The Insurance Regulatory Development Authority of India (IRDAI) was established, which has significantly changed the insurance business as a whole. The IRDA of India additionally issues permits for a number of categories of insurance businesses, including life, fire, and marine insurance. The 55 players that are active now in India include 24 life insurance companies and 31 non-life insurance companies. If an insurance business is sold on an interstate basis, a license is required in each area where the business is performed. 
Are you looking for insurance company registration in India? Learn all the requirements, procedure & eligibility requirements to be met by IRDAI (Insurance Regulatory Development Authority of India).

The formation of the Insurance Regulatory Development Authority of India (IRDAI) has fundamentally altered the insurance industry as a whole. The permit for various classifications of insurance enterprises, including life insurance, fire insurance, and marine insurance, is additionally granted by the IRDA of India. 24 life insurance firms and 31 non-life insurance businesses make up the total of 55 players in India which are present today.  A license is necessary in each state where the business is conducted if insurance business is sold on an interstate basis. 

The IRDA of India issues a certificate of registration to any insurer wishing to conduct insurance business in India prior to the start of operations. In accordance with the Insurance Act of 1938 and the different regulations established by the Authority, there are prerequisites for submitting an application for such registration.

How can insurance company registration be done?

To apply for Insurance company registration there are 3 parts which a person has to go through: R1,R2 and R3.

  • Request for a registration requisition to be issued.
    Documents which are necessary for an insurance company registration are:
    • The applicant is from a firm that was incorporated in accordance with the Companies Act of 2013 with Name, address, and/or profession of the trustees.
    • Legal document of the Indian promoters and foreign investors along with the annual reports for the previous five years.
    • A verified copy of the shareholding agreement between the applicant’s foreign investor and Indian Promoters.
    • A five-year business strategy that the board of directors has authorized.
    • A potential customer may submit an application for life insurance, general insurance, health insurance businesses solely, or reinsurance companies.
    • The Authority may request more data or clarification in relation to an application’s review after receiving one.
    • The applicant must then submit a fresh application in Form IRDAI/R2 seeking the granting of a certificate of registration when the Authority has satisfied itself with the request.
    • The Authority may decline a request for the issuance of a demand for a registration form by providing written justification for its decision.
    • The Securities Appellate Tribunal must accept an appeal from an applicant who is unhappy with the decision within 30 days of receiving the rejection communication.
  • A potential customer may submit an application for life insurance, general insurance, health insurance businesses solely, or reinsurance companies.
  • The Authority may request more data or clarification in relation to an application’s review after receiving one.
  • The applicant must then submit a fresh application in Form IRDAI/R2 seeking the granting of a certificate of registration when the Authority has satisfied itself with the request. 
  • The Authority may decline a request for the issuance of a demand for a registration form by providing written justification for its decision.
  • The Securities Appellate Tribunal must accept an appeal from an applicant who is unhappy with the decision within 30 days of receiving the rejection communication.

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Eligibility of the Insurance company Registration

  1. Any business falling within the designated category of businesses
  2. Any organisation that has IRDAI recognition.
  3. Any LLP that has been authorised by the LLP Act of 2008.
  4. Any business that offered insurance before the Act’s implementation may continue to do so, provided that foreign ownership is limited to a maximum of 26 percent of the paid-up capital.
  5. The phrase “insurance marketing firm” should appear in the registered name when forming LLPs.

Request for an implementation to register an insurance firm

  • Once the authority acknowledges the application for demand, the contender will submit an application to the Form Insurance Regulatory Development Authority of India or R2 for the issuance of a certificate of incorporation.
  • The Proposal Will Include The Complementary Information:
  • An application for health, general, and life insurance
  • Evidence demonstrating that the capital has a settled up value of at least Rs. 100 crore.
  • Application for Reinsurance: According to business data, paid-up capital is more than or equivalent to Rs. 200 crore;
    • A declaration in writing from the Indian and international promoters that the funded equity capital is sufficient after subtracting startup costs.
    • A assertion of shareholding that consists of the unique quantity of stocks given to the promoters.
    • Indian builders and overseas buyers CEO, MD, and WTD indicating that the protecting of faraway paid-up fairness capital is being decided according with the Indian Insurance Companies (Foreign Investment) Rules, 2015 study with numerous ideas related with it.
  • FIPB approval is required if FDI exceeds the 26 percent cap.
  • Certified copy of the prospectus that was published.
  • A certified copy of the MOU or any other contract signed by the promoters, such as a management agreement, shareholder agreement, voting agreement, or other contract.
  • A statement attesting to the payment of nonrefundable expenses of Rs. 5 lakh.
  • A PCA or PCS certificate confirming the consistency of the registration fees, value of the share capital, and other Act requirements.

The degree of actuarial, accounting, and other professional specialists in the management, as well as the organization structure, must all be taken into account by the authority after receiving the application.

The Authority issues the applicant a certificate in Form IRDAI/R3 following an investigation and finding it satisfactory. If the Authority is unsatisfied with the applicant’s disclosure of information, he may reject the application.

The applicant must be informed of their application’s denial within thirty days after the day the order of rejection was passed, along with the reason for the rejection. A candidate may submit an appeal with the SAT before the completion of 30 days of getting a rejection letter. Within a year of receiving a certificate, the applicant must start a business. The authorities can grant the extension, but it cannot be for a period more than 24 months.

Who is prohibited from submitting an Insurance Company Registration application?

The applicant is ineligible to submit an application under IRDAI/R1 under the following situations:

  • The application for a registration request has been denied by the Authority or withdrawn;
  • The existing venture’s foreign investors and Indian promoters have left for any reason at any time.
  • the period of time during the two financial years prior to the date of the request for registration application;
  • During the previous two fiscal years from the date of the request for registration application,the Authority has denied the utility for registration or it’s been withdrawn via way of means of the applicant for any reason;
  • The Authority, on the other hand, has withdrawn the Certificate of Registration.
  • The words “insurance” or “assurance” are not present in the applicant’s name.

Causes behind the suspension of insurance company registration certificate

  • Violates the rules governing the activities involving the value of assets and liabilities.
  • The insurance is in receivership or has been declared insolvent.
  • Except for the authority’s consent, the insurer’s enterprise or a category of its enterprise has been transferred to a person else, transferred to any other insurer, or merged with the enterprise of any other insurer.
  • Failure to follow an authority-issued directive or order, a rule, regulation, or provision of the Act.
  • Any claim that is not paid within three months of the court’s ruling remains unpaid.
  • The company does business that is not related to insurance or prescribed business.
  • A failure to conform with a legalized responsibility below the Companies Act of 2013, the General Insurance Business Act of 1972, the Foreign Exchange Management Act of 1999, or the Prevention of Money Laundering Act of 2002.
  • Fails to pay the yearly payments mandated by the Act.
  • The insurer has been found guilty of a crime under any statute.

Renewal of Insurance Company Registration

It is necessary to renew the insurance company registration license. For one year, the registration is granted. This means that it must be renewed every year, and the renewal application must be submitted by the 31st of the year before the renewal together with the following fees:

 

  • For each class of insurance, the fees should not be less than 50,000;
  • For reinsurance businesses, the costs should not be less than 1/4% of the premiums collected in India during the year; and
  • The renewal fees should be paid to the Reserve Bank of India.

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Conclusion

The IRDAI was given important duties in order to safeguard policyholder’s interests. Effectively performing insurance business and defending the rights of policyholders in areas relating to policy assignment. 

Nominations made via way of means of policyholders, insurable interest, price of coverage claims, give up cost of the policy, and different phrases and situations of coverage contracts accepting the phrases and situations of the services supplied by various insurers regulating insurance companies’ investment of money and maintaining a solvency margin by defining the standards for financial reporting for insurance firms ensuring that insurance is available in rural areas and to the most vulnerable members of society.

FAQ’s

  • The preparation of the application for an insurance registration from the IRDA;
  • The procedure for getting insurance products approved by the IRDA; and
  • The method for selecting an insurance broker.

It’s a business that offers financial security to insurance companies. Reinsures tackle risks that are arbitrarily large for agencies to handle on their own and enable backup strategies to win more business.

A new company cannot be incorporated unless it has a minimum paid-up capital of Rs. 100 crores if it plans to function as an insurance provider. If the business is a reinsurance company, the required paid-up capital is Rs. 200 crores.

  • The Aegon Life Insurance Co.
  • The Shriram Life Insurance Co.
  • Life insurance company Star Union Dai-Ichi Ltd.
  • Tata Life Insurance Corporation Ltd.

The goals of insurance regulation are to safeguard customers, maintain insurer solvency, provide insurance to those who might not otherwise be able to obtain it due to bad risk factors, and control premium costs.

An association created in accordance with the Companies Act of 1956 is referred to as a “Insurance Repository.” It is a group that has received authorization from the Insurance Regulatory and Development Authority (IRDA) to maintain information on insurance policies in an electronic format for its insurers. The Insurance Repositories enable the unwinding of holding protection contracts that are communicated electronically.

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