What makes an Insurance Marketing Firm worthy of registration?

What makes an Insurance Marketing Firm worthy of registration

Before learning how to become Insurance Marketing Firm in India, let us understand something much more basic as a pre-requisite for the registration procedure. Every business interested in registering itself as an Insurance Marketing Firm must check their eligibilities before applying for the license registration. In this article, we have detailed the requisite pre-conditioning procedures before applying for IMF license registration. Let us see them one by one.

Eligible Corporate Entities for IMF registration

As per the Regulations of IRDAI for Registration of Insurance Marketing Firms in India, published in 2015, any of the following applicants can apply for the Insurance Marketing Firm license:

  • Company established under the Companies Act of 2013
  • Partnership registered under the Limited Liability Partnership Act of 2008
  • Cooperative Society registered under the Cooperative Societies Act of 1912
  • Individual/Business permitted for business related to an IMF

Capital Requirements for Insurance Marketing Firm Registration

As per regulation 6 of the IRDAI regulations for the IMF Registration of 2015, every registration applicant must meet the following capital requirements before applying for the Insurance Marketing Firm in IRDAI:

1. Net Worth of the IMF

The Net-Worth of the IMF applicant must be at least Rs 10 lakhs. To become an IMF in a particular district, the applicant’s net worth must be a minimum of Rs 5 lakhs. Also, the applicant must maintain their net worth at all times. For such purposes, the applicant must submit a certificate certified by a chartered accountant within 90 days of the closing of that particular, fiscal year.

2. IMF’s Foreign Holding

The IMF applicant must ensure that its aggregate holdings of equity shares and foreign contributions by foreign investors, as well as portfolio investors, must not exceed 49% of the total contribution or the paid-up equity capital of the IMF at any time.

Appointment of the IMF’s Principal Officer

Every Insurance Marketing Firm must have a principal officer with designated qualifications. He must be responsible for all the activities undertaken by the IMF. Also, as per the IRDAI’s rules, every Principal Officer must meet the following educational as well as experiential criteria:

  • He or she must be an Associate or a Fellow of the Insurance Institute of India in Mumbai
  • He or she must be an Associate or a Fellow of the Institute of Actuaries of India
  • He or she must be an Associate or a Fellow of the Chartered Insurance Institute in London
  • He or she must possess a postgraduate qualification from the Institute of Insurance and Risk Management in Hyderabad
  • He or she must be a graduate with Experience of five years preceding the year in which the IMF application was made
  • He or she must be a graduate with ten years of experience in the financial services sector. It must precede the year in which the IMF application is made

Fit and Proper Criteria for all Company Personnel

The appointed principal officer must also satisfy the requisite training requirements per the IRDAI’s regulations. The following personnel of the Insurance Marketing Firm must not be disqualified under the law in force:

  • Directors
  • Principal Officers
  • Shareholders

In all, they must satisfy the FIT and PROPER criteria with the requisite test. The Principal Officer must meet the general eligibilities, and their name must have the following words ‘ Insurance Marketing Firm’ on the trail.

Office Facility of the Applicant Firm

The IMF applicant must satisfy the need for the necessary infrastructure to discharge their duties effectively:

  • Adequate Office Space
  • Equipment
  • Trained Manpower
  • IT Infrastructure

Objects of the IMF

The registration applicant must ensure that the main object of the business must be Insurance Marketing. The details of such must be mentioned in the objects clause of the following:

  • Articles of Association
  • Memorandum of Association

To secure your IMF registration with the IRDAI, your conduct must be as per the set activities by the Authority.