There are 4 types of Corporate Agents in India

• 1. Corporate Agent (Life)
• 2. Corporate Agent (General)
• 3. Corporate Agent (Health)
• 4. Corporate Agent (Composite)

Composite Insurance Agent” means an individual who is appointed as an insurance agent by two or more insurers subject to the condition that he/she shall not act as an insurance agent for more than one life insurer, one general insurer, one health insurer, and one of each of the mono-line insurers

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 License, they can serve life insurance business, non-life insurance business, and health insurance business.

• A Corporate Agent for a life insurance business can have arrangements with only three life insurers to advertise, solicit, and procure different insurance products.
• A Corporate Agent for a general insurance business can have arrangements with only three general insurers to solicit, advertise, and procure different types of insurance products on behalf of the insurance companies. The corporate agent for this type of business would only solicit, service, and procure retail and commercial insurance products for insurers whose risk does not exceed Rs. 5 Crore. This amount is the sum of individual insurance amounts.
• Corporate agents for health insurance can have arrangements only with three health insurers to advertise, procure and service their products.
• Corporate agents for composite insurance can have arrangements with a composite insurance provider for three years.

If there is any change in the arrangement related to the insurance types covered under a corporate agency, then prior permission is required from the Insurance Regulatory and Development Authority of India.

Why Corporate Agent License is required

• To ensure that the corporate agent acts on behalf of the insurance companies.
• To solicit products on behalf of the insurance companies.
• To act in the best interests of life insurance, non-life insurance, and general insurance business.
• This License is required so that sufficient regulation is present in the insurance business.

Eligibility Criteria

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

Minimum Capital Requirements

• An applicant 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.

Applicant

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

• A company formed under the Companies Act, 2013 or the company law; or
• A Limited Liability Partnership under the LLP Act, 2008; or
• A Co-operative Society registered under the Co-operative Societies Act; or
• A banking company; or
• A corresponding new bank under the Banking Companies Act, 1949; or
• 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 who may be recognized by the Authority to act as a corporate agent.

Other Criteria

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

• The applicant should not be disqualified under any law in force.
• 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.
• 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.
• 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.
• The key management personnel must satisfy the FIT and PROPER criteria.

Process / Procedure for Applying for a Corporate Agency License
Application for Grant of Certificate of Registration:

• The applicant should make an application for a Corporate Agency License.

Qualification

• 1) The corporate agent can act as an entity whose principal business does not deal with the distribution of insurance products, and insurance distribution is a subsidiary activity of the company.
• 2) A business that wants to carry out insurance intermediation exclusively.

• The application for a Corporate Agency License must be made in Form A of Schedule –I.
• A fee of Rs. 10,000/- plus taxes must be paid through an Account Payee draft in favor of ‘The Insurance Regulatory and Development Authority of India’ payable at Hyderabad. The fees can also be made through electronic transfer.
• If the applicant is an institution in the financial sector, then a No Objection Certificate (NOC) must be obtained by the applicant regarding the same. The NOC is to conduct transactions in the corporate agency business. However, corporate agents who are licensed under the 2002 regulations would not be required to get a NOC.
• 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.
• The application for granting the corporate agent License will be rejected if it does not confirm the requirements.
• The Authority may request from the applicant further information and documents.

The procedure of Registration for Corporate Agency License

• Upon receipt of communication for grant of registration from the Authority, the applicant shall pay a fee of Rs.25,000/-, plus applicable taxes, within 15 days of receipt of such communication.
• If the Authority is satisfied with the application, then the certificate would be granted in Form- B.
• The Authority would also have to send intimation to the applicant regarding the category in which the applicant has been granted registration.
• An applicant can apply for another category if specific requirements related to the regulation are satisfied. This application must be made only after the completion of 1 year of the corporate agency License.

Conditions required for a Corporate Agency License

There are specific conditions for granting a corporate agency License:

• Corporate agents have to follow the code of conduct for insurance regulation business.
• Corporate agents must only solicit and service the insurance business.
• Corporate agents must be compliant with the Act, Regulations, and Rules provided by the Authority.
• The applicant should inform the Authority of any material change or false/ misleading information, for previously provided documents.
• Corporate Agents should take adequate steps for the redressal of grievances within 14 days.
• The Corporate Agent shall solicit and procure a reasonable number of insurance policies commensurate with the resources.
• The corporate agent has to maintain records of the business. These include policy details and person-wise details of the different policies. The corporate agency will have adequate systems in place to ensure that records are maintained.
• The corporate agent cannot carry out multi-level marketing for solicitation of insurance-related products.
• The corporate agent has to maintain specific books of accounts for their business.
• The corporate agent has to ensure that during the solicitation process, there is no conflict of interest.

Validity for Certificate of Registration for Corporate Agency License

• Once the corporate agency License is given, it can be renewed after three years.

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