How to start an Insurance Broker Company in India?

Given the steady growth of the insurance sector in India, starting an insurance broker company can be a good business opportunity. The number of insurance brokers in India is still low compared to many other businesses. So, this is a good time if you want to start an insurance broking business. Besides earning profits, an insurance broker company also gives you the chance to help others. 

As an insurance broker firm’s owner, you get the chance to help people as well as businesses choose the right insurance policy as per their needs. You can help them to compare policies from different insurance companies and select the one that suits them best. In this post, you will learn everything you need to know about starting an insurance broker company in India from the ground up. 

What is an Insurance Broker Company?

An Insurance Broker Company is an entity that is authorised by the Insurance Regulatory and Development Authority of India (IRDAI) to carry out insurance broking activities. IRDAI grants different categories of insurance broker registration. Each registration allows the broker to carry out specific broking activities. This includes Direct Broking, where the broker helps clients buy insurance policies. A Direct Broker may be registered as Direct (Life), Direct (General & Health) or Direct (Life & General). It also includes Reinsurance Broking, where the broker helps insurance companies arrange reinsurance cover. 

A Composite Broker is authorised to carry out both direct broking and reinsurance broking activities. Without IRDAI authorisation, it is not possible to operate an insurance brokerage company in India. It is a mandatory legal requirement to obtain this authorisation. To start an insurance broking company, the applicant entity must meet prescribed eligibility criteria, prepare required documents and submit an online application for IRDAI insurance broker licence.

If all the requirements are met, the applicant obtains an insurance-broker licence. Thereafter, the insurance broker company is required to abide by the provisions of the applicable laws, regulations and guidelines issued by IRDAI. Brokers are meant to serve as a middleman between insurance companies and insurance buyers. This kind of system is meant to enable the sale of a large number of insurance policies.

Laws & Regulations Governing Indian Insurance Broker Companies 

There are specific laws and regulations that govern insurance companies in India. These include the following:-

• Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025
• The Insurance Regulatory and Development Authority Act, 1999
• The Insurance Act, 1938 
• IRDAI (Insurance Brokers) Regulations, 2018 

After obtaining registration from IRDAI, every insurance brokerage company must comply with the requirements of the above-mentioned laws and regulations. 

What are Types of Insurance Brokerage Companies?

Below, we have explained each type of insurance broker company in India in detail:-

Direct Insurance Broker

A Direct Insurance Broker Company’s main role is to help individuals and businesses purchase right insurance policy. These companies first understand the client’s insurance needs, then compare policies offered by different insurance companies and then finally recommend the most suitable option. They also assist clients throughout insurance policy buying process and earn a brokerage for the policies sold. In addition, direct insurance brokers provide market-based information and professional advice to help clients make informed insurance decisions. 

Direct brokers may fall under Direct (Life), Direct (General & Health) or Direct (Life & General) category. A Direct (Life) Broker arranges life insurance policies for individuals and businesses while a Direct (General & Health) Broker arranges general and health insurance policies. A Direct (Life & General) Broker arranges both life insurance and general & health insurance policies.

Reinsurance Broker

As the name suggests, a Reinsurance Broker helps insurance companies obtain reinsurance from reinsurers. Their role involves understanding the insurer’s requirements, negotiating with reinsurers so as to secure the most suitable terms and assisting in arranging reinsurance contracts.

Composite Insurance Broker

A Composite Broker is authorised to carry out both direct insurance broking and reinsurance broking activities. This means the broker can help individuals and businesses purchase insurance policies while also assisting insurance companies in arranging reinsurance. 

Since composite brokers are authorised to provide both types of broking services, they hold a Composite Broker licence issued by IRDAI and are required to comply with the applicable regulatory requirements.

What are the Eligibility Criteria Insurance Broker License?

The eligibility criteria for the insurance brokerage license are stated below:-

• The applicant entity must be a company registered under the Companies Act, 2013, a Limited Liability Partnership (LLP) registered under the Limited Liability Partnership Act, 2008 or a co-operative society registered under the Co-operative Societies Act, 1912 or any corresponding law.
• Insurance broking must be the main and exclusive business object mentioned in the applicant’s Memorandum of Association.
• The promoters, directors and key managerial personnel must satisfy IRDAI’s fit and proper criteria.
• The applicant must meet prescribed paid-up capital as well as net worth requirements based on category of broker:-
  • Direct Broker:- Requires paid-up capital of Rs. 75 lakh and net worth of Rs. 50 lakh.
  • Reinsurance Broker:- Requires paid-up capital of Rs. 4 crore and net worth of Rs. 2 crore.
  • Composite Broker:- Requires paid-up capital of Rs. 5 crore and net worth of Rs. 2.5 crore.
• The applicant must maintain the required fixed deposit with a scheduled bank as prescribed by IRDAI.
• The applicant must appoint a qualified Principal Officer who fulfils the educational, training and certification requirements specified by IRDAI.
• The applicant must employ at least two Broker Qualified Persons who have completed required training and passed prescribed examination.

What Documents Are Required for an Insurance Broker Licence? 

The following documents are generally required while filing an application for an Insurance Broker Licence:-

• Certificate of Incorporation
• Memorandum of Association (MOA)
• Articles of Association (AOA)
• PAN Card of Company
• Registered Office Address Proof
• Net Worth Certificate from CA
• Audited Financial Statements
• Details of Directors, Shareholders and Principal Officer
• Educational and Qualification Documents of Principal Officer
• Board Resolution authorising Insurance Licence Application
• Business Plan and Organisational Structure
• Fit and Proper Declarations
• Other Documents as required by IRDAI.

How to Apply for Insurance Broker License in India?

The following steps are involved in Insurance Broker License process in India:- 

Step 1:- The applicant must submit a duly filled Form B of Schedule I along with required documents and prescribed application fee to IRDAI. The application must be submitted online through the IRDAI BAP portal.

Step 2:- After receiving the application, IRDAI carefully checks all the documents and information submitted by applicant. If any document is missing or any clarification is necessary, IRDAI may ask applicant to submit additional documents/information.

Step 3:- The authorities will verify whether applicant satisfies all eligibility requirements prescribed under applicable IRDAI regulations. If  documents and details provided are satisfactory, IRDAI will grant an in-principle approval to insurance-broker company. An in-principle approval means that the applicant has fulfilled the main requirements for obtaining the Certificate of Registration.

Step 4:- After receiving the in-principle approval, the applicant must comply with any additional requirements specified by IRDAI and pay the prescribed registration fee through the online payment mode available on the portal.

Step 5:- Once the applicant fulfils all the requirements and complies with applicable IRDAI regulations, IRDAI issues Certificate of Registration to it. This certificate allows the applicant entity to carry on insurance broking business in India.

Conclusion

Starting an insurance broker firm can be a great business opportunity. It allows you to help customers choose right insurance policies while building a successful business. However, you cannot simply set up a firm and start offering insurance brokerage services right away. There are several legal and regulatory requirements that must be completed first. You must register your business as a company, LLP or cooperative society. You also need to meet minimum paid-up capital and net worth requirements. After that, you must collect required documents, provide necessary information and submit an application to IRDAI.

You can legally operate as an insurance broker only after IRDAI grants you Certificate of Registration. If you need assistance in obtaining an IRDAI Certificate of Registration for an insurance brokerage firm, you can get in touch with our Registrationkraft consultants. 

Frequently Asked Questions (FAQs)

Q1. What is the paid-up capital and net worth requirement for a Direct Insurance Brokerage License?

To obtain a Direct Insurance Brokerage License in India, the applicant must have a minimum paid-up capital of Rs. 75 lakh and maintain a minimum net worth of Rs. 50 lakh at all times.

Q2. What is validity of Insurance Broker Registration?

The Insurance Brokerage Registration is valid on a perpetual basis, subject to compliance with the applicable IRDAI regulations and payment of the prescribed annual fees.