An Insurance Marketing firm is a new type of distribution and business channel for the Insurance sector in India. This was introduced by one of the insurance committees in 2007 with an aim to launch a group of companies that can market products related to mutual funds and the insurance sector. The plan also included the sale of pension plans, stocks, and other financial services.
Insurance Marketing firms conduct their business on similar lines of insurance distribution firms. Any entity willing to operate as an Insurance marketing company must get the insurance marketing firm license and registration. These firms have collaborations with insurance companies for the marketing of their new and existing products. To obtain the insurance Marketing company License a firm must be registered under the Companies Act and apply for a license to the IRDA.
The GOI and IRDA have prescribed certain criteria that must be met by any company willing to register as an Insurance Marketing Firm.
1. Corporate Structure: A company must be one of the following entities to be eligible for Insurance marketing firm license.
2. Capital Requirements: The applicant must meet the following requirements to qualify for the license
3. Principal Officer: there are some conditions specified for the principal officer of an insurance marketing Firm. The principal officer of a firm is the main administrative officer of the company. Here are the criteria for the PO (principal officer of the company)
4. Foreign Holding: It should not exceed 49% of the paid-up equity share capital or the contribution of insurance Marketing Firm. IRDA will calculate the foreign equity holding of the firm before granting the license.
5. Name of the Company: The name must contain the words ‘Insurance Marketing firm’ in it.
6. Purpose of the Company: The main objective of the company is insurance marketing and it should be mentioned as such in the MoA and AoA. These activities should concur to the activities prescribed by the authority (IRDA).
7. Office/ Facilities: The office or infrastructure of such firm must be capable of successfully conducting the business of insurance marketing. Equipment and manpower should be efficient to take on the challenges of the business.
8. Certificate from FSE and ISP: The FSE and ISP or Financial Service Executive and Insurance salesperson must satisfy the required training and qualification required to get the Insurance Brokers License.
A license granted by the authority must be renewed after 3 years which is its period of validity. The authority holds the right to suspend a license in case the company fails to comply with the norms of the IRDA Act.
MUDS help companies in getting the license easily by giving complete end-to-end support to new companies in getting their Insurance Marketing Firm license and registration.
Yes, IMF or Insurance marketing firms do require NOC from the Registrar of Companies as it is operating as a company. After this, they can apply for a license from the IRDA.
The following documents are required to obtain No Objection Certificate for IMF licence:
The Principal Officer is often the presiding officer or key management executive of the Insurance Marketing Firm (IMF). The PO conducts all the activities of the business. The principal officer must have the requisite qualifications and training as required. The PO of the applicant company must complete training from an institute notified as per the authority.