Chennai: The Insurance Regulatory and Development Authority (IRDA) has directed all the licensed broking companies to suffix the words `Insurance Broker'', `Insurance Brokers'' to their name in order to distinguish themselves from the unlicensed entities like insurance consultants, risk managers.

According to an IRDA directive, brokers have to submit a proof of name change application filed with the Registrar of Companies and later the new Certificate of Incorporation.

Insurance brokers applying for a broking license for the first time, have to comply with specific stipulations. (See details)

After fulfilling the stipulated requirements, applicants are required to appear before IRDA for a presentation of its business plan in connection with the application.

Stipulations for a broking licence

Insurance brokers applying for a broking license for the first time, must comply with following requirements prescribed by the Insurance Regulatory and Development Authority (IRDA):

1. Remittance of requisite fee as per the category of insurance broking licence that is being applied for, by a demand draft payable at Hyderabad, as prescribed under Schedule II of IRDA (Insurance Brokers) Regulations, 2002.

2. Printed copy of Memorandum and Articles of Association issued by Registrar of Companies. The main objects of the Memorandum and Articles of Association should be as per regulation 9(2) (H) of the IRDA''s (Insurance Brokers) Regulations, 2002.

3. The applicant has to comply with the mandatory training requirements as specified in regulation 9 (2) (F). Training requirement as specified under section 9 (2) (F) of the IRDA (Insurance Brokers) Regulations, 2002 have to be complied with before any application can be considered for granting a license.

4. One principal officer has in the broking company has to fulfill the requirements of Regulation 9.

5. Information on whether any person associated with the applicant company in his capacity as directors / shareholder / promoter / key management personnel or employee holds an insurance agency or insurance surveyor''s license. If so, the complete details have to be submitted. According to regulations, no agent or surveyor is permitted to work simultaneously as a broker. Therefore, the applicant is required to take steps to cancel the agencies and submit documentary proof of the same to the authority.

6. Detailed CV of all the directors highlighting their past and present activities.

7. Detailed CV`s and attested copies of testimonials of the educational qualifications of the principal officer and key management personnel.

8. The designated principal officer has to submit an affidavit, duly notarized, certifying that that the applicant (directors, principal officer, key management personnel and employees of the company) do not attract any disqualifications specified under sub-section 42 D of the Insurance Act, 1938.

9. List of all shareholders (current as well as proposed) of the applicant company.

10. Photocopy of the asset register of the firm, duly certified by a chartered accountant.

11. List of employees who will be responsible for soliciting and procuring insurance business along-with their qualifications.

12. Details of statutory auditors and principal bankers along with the bank account number of applicant.

13. In the case of any of the shareholders being a business entity they have to specify if they happen to be non-banking finance companies (NBFC). NBFCs have to submit a No Objection Certificate from the Reserve Bank of India on the investment in the insurance broking entity.

14. Shareholders that are business entities are required to furnish a board resolution stating the board''s intention to promote or invest in the applicant company.

15. Business entities that are shareholder, must also submit the audited annual report, balance sheet for the last three years along with certified copies of income tax returns.

16. Individual promoters need to submit certified copies of income tax returns and copies of the balance sheet filed by it, certified by the auditors, for the last three years, along with net worth certificates certified by a chartered accountant.

17. The balance sheet of the applicant company

18. Explain in detail the existing activities of the applicant company.

19. Clarification on how the applicant company proposes to deal with its existing customers / business / liabilities once it commences business as an insurance broker.

20. The company must have the words `Insurance Broker` or `Insurance Broking` in its name so as to reflect its line of activity i.e. insurance broking.

21. Details of infrastructure along with supporting evidence thereof like ownership / lease agreement papers with regard to office space / equipment / trained manpower, etc. for the registered office and the future planning for opening branch offices at various locations in the country and the estimated time frame with photographs of premises.

22. 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.

23. Provide an organisation chart giving a complete picture of the company''s activities like IT, underwriting, risk assessment, claims settlement, marketing, accounts, back office, etc.

24. List of experienced personnel inducted from the general and life insurance sectors with sound knowledge and experience of working in the areas of risk assessment, underwriting and claims management, etc. Submit a detailed CV, copies of educational qualifications along with their appointment and joining letters of all the people selected by the applicant to the Authority.