Insurance marketing firms play a critical role in the insurance industry by assisting companies in effectively reaching their target audience and selling insurance products. These businesses need a licence to advertise insurance to operate legally. This blog post will review the insurance marketing firm licence, which differs depending on the jurisdiction but generally adheres to a similar framework.
Brief Description of the Insurance Marketing Firm License
A new business model and channel of distribution for the insurance industry is the insurance marketing firm. One of the insurance committees brought this up in 2007. A group of businesses was established to promote the goods associated with selling mutual funds and insurance. Aside from this, the primary objective was to market financial services, pension plans, and stocks.
Insurance marketing firms provide similar services related to an insurance distribution firm. An organisation that wants to act as an insurance marketing firm must obtain a licence. To advertise their products, insurance marketing businesses work with insurance companies. The applicant must be a business, LLP, cooperative society, or any other recognised entity to be eligible to get an insurance marketing firm licence. An individual cannot operate a marketing agency for insurance.
These businesses are free to promote various insurance companies’ insurance goods. However, an insurance marketing company must adhere to specified rules while engaging with customers. When interacting with clients, marketing companies must be prudent and transparent. There is no exclusivity agreement between insurance marketing companies and one insurer. They may work for various insurance providers.
Insurance marketing companies employ Insurance Sales Persons (ISPs), who conduct marketing and solicitation tasks on their behalf. A Financial Service Executive (FSE), sometimes known as a financial executive, is also hired by an insurance marketing company. These executives are in charge of promoting and soliciting non-insurance items subject to different regulatory bodies.
Acts, rules, and regulations that are relevant and control the insurance marketing firm licence
Various nations may have laws governing Insurance Marketing Firm licence, and new rules may have passed since then.
Insurance Regulatory and Development Authority of India (IRDAI):
In India, the Insurance Regulatory and Development Authority of India (IRDAI) regulates insurance activities, including the licensing and functioning of Insurance Marketing Firms (IMFs). The regulations about IMFs can be found in the IRDAI (Insurance Marketing Firm) Regulations, 2015.
Insurance Distribution Directive (IDD) in the European Union:
Laws in the European Union govern the sale of insurance goods. One such law that controls the licensing and behaviour of insurance intermediaries, including Insurance Marketing Firms, is the Insurance Distribution Directive (IDD).
Insurance Acts in Various Countries:
Particular insurance acts or regulations in various nations govern the insurance sector. The licensing and limitation of intermediaries, including IMFs, may be addressed in these statutes. Examples include the Insurance Act in the United Kingdom and the Insurance Act in Canada.
Insurance Regulatory Authorities:
In some nations, the insurance sector is governed by specific regulatory bodies that can also issue IMF-related guidelines, rules, and regulations. These authorities might specify particular conditions for getting and keeping an IMF licence.
Qualifications for acquiring a licence for an insurance marketing firm
Depending on the particular laws and requirements of the nation or territory where you wish to conduct business, there may be different eligibility requirements for acquiring an Insurance Marketing Firm licence. The appropriate governmental entities or insurance regulating agencies commonly establish the insurance regulations, which may change over time.
Depending on the particular laws and requirements of the nation or territory where you wish to conduct business, there may be different eligibility requirements for acquiring an Insurance Marketing Firm licence. The appropriate governmental entities or insurance regulating agencies usually establish the insurance regulations, which may change over time.
How to Apply for a Licence for an Insurance Marketing Firm
The applicant must submit the following documents for registering an insurance marketing firm under Regulation 4 of the IRDAI (Registration of Insurance Marketing Firm) Regulations, 2015:
Application for Insurance Marketing Firm License Certificate of Registration
- The applicant must submit a Form-A application for the Insurance Marketing Firm Licence.
- The authority must receive a non-refundable cost of Rs. 5000 + service tax (GST).
- Along with Form-A, all essential paperwork must be supplied.
- The FIT and PROPER requirements met by the directors/chief officers of the insurance marketing firm must be declared by all of the principal officers and directors.
- The Application must be submitted with the exam pass certificate from the Insurance Marketing Firm. The principal officers and directors of the insurance marketing company will be named on the test pass certificate.
- In addition, the authority should receive a copy of the employee’s surveyor and loss assessor licence if they work for an insurance marketing company.
- A copy of the approved person certificate must also be delivered to the authority.
- The insurance marketing company must provide the authority with the licences of all the registered individuals. The IRDAI, SEBI, RBI, PFRDA, and Post Office charges would also be included in this.
- The application must comply with the authority’s requirements.
Licence for Insurance Marketing Firm Registration
- The authority will issue a registration certificate in Form-B if it determines that all the necessary information complies with the Insurance Marketing Company Licence.
- The insurance marketing company requesting a registration certificate may also request consideration for any additional IRDAI categories.
Licence for an Insurance Marketing Firm is denied.
- If the authority determines that the applicant still needs to meet the conditions, the application for opening an insurance business may be refused.
- Within 30 days after communicating the denial, the authority must communicate its decision not to approve the application for an insurance marketing firm.
- Within 30 days of receiving such a refusal, an applicant may appeal the decision to the authority’s Chairman.
- Within 60 days of getting the appeal, the power’s director will dissect the application and rethink the choice.
- In something like 45 days of receipt, a subsequent allure might be recorded with the Securities Appellate Tribunal (SAT).
- If the SAT denies the appeal, the candidate has one year to present another application.
Renewal of Insurance Marketing Firm License
An insurance marketing company’s licence is suitable for three years. A company that markets insurance cannot operate with an expired certificate. In order to renew an insurance marketing firm’s registration, an applicant must follow the steps outlined in Chapter III of the IRDAI (Registration of Insurance Marketing Firm) Regulations, 2015:
- 30 days before the licence expiration, applications for renewal of an insurance marketing licence must be submitted to the appropriate authority. In FORM AA, the application must be submitted. However, a renewal application may be submitted 90 days before the licence’s expiration.
- Documents and the renewal fee of Rs. 2000 + service tax (GST) must be submitted with Form AA.
- A fee of Rs. 100 must be submitted with the application if it is submitted after the time mentioned above period has passed but before the certificate’s expiration.
- The authority will only consider a request for certificate renewal for an insurance marketing firm licence submitted 60 days following the initial year. The applicant is not permitted to operate an insurance marketing firm.
- Before renewing the certificate, the Principal Officer and the ISP must complete at least 25 hours of practical training.
- The authorities may require additional information from the applicant before renewing the application. Within 21 days of obtaining the report, the insurance marketing company must submit it.
- The authority will issue the Form-D certificate for a certificate of registration renewal.
Conclusion
Insurance marketing companies are essential to the insurance sector since they help insurance companies contact their target audiences and sell insurance products. To operate lawfully, these companies must have a licence to advertise insurance. This blog article will discuss the insurance marketing firm licence procedure, which varies based on the jurisdiction but generally follows a similar framework.
