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Preface: This post was originally published in 2022 and has been updated on April 16, 2025, to provide you with the most current and accurate information.
As per the Insurance Brokers regulations issued by the IRDAI (Insurance Regulatory and Development Authority of India in 2018, an Insurance Broker is defined as a business entity that implements their skills and knowledge about the insurance industry and acts as an intermediary between the seeking insurance policy seeking clients and insurance companies. To operate in the insurance market as an insurance broker, you must have a specific license.
An Insurance Broker License (IBL) is formally defined as the legal document issued by the IRDAI to allow a business to operate as an insurance broker. IRDAI is a government authority that formulates laws for any business entity to become an insurance broker in India. These laws bound the applicant after obtaining the IBL for insurance solicitation and procurement.
In India, the following entities can offer insurance broker services as long as they have IBL:
A registered company defined under the Companies Act of 2013,
A cooperative society registered under the Cooperative Societies Act of 1912 or any law for the registration of cooperative societies,
An LLP formed under the Limited Liability Partnership (LLP) Act of 2008 with no partner being a non-resident entity or a person resident outside India as defined in the Foreign Exchange Management Act of 1999 and not being a foreign Limited Liability Partnership registered thereunder.
An Insurance Brokerage Firm must contain the terms' Insurance Broker',' Insurance Brokers', or 'Insurance Broking' in its registered name. The words must reflect their line of activity and enable the public to differentiate insurance brokers registered with the Insurance Regulatory and Development Authority of India (IRDAI) from other non-registered insurance-related entities.
There are three categories of insurance brokers in India:
Direct Insurance Broker (Life, General, Life & General both)
Reinsurance Broker
Composite Broker
A direct broker is a type of Insurance Broker registered under the IRDAI who solicits and arranges insurance business for its clients with insurers located in India or provides claim consultancy, Risk Management services, or other similar services as permitted under the IRDAI (Insurance Brokers) Regulations of 2018 for remuneration or a fee.
Gather the relevant data about the client's business and risk management strategy.
Get acquainted with the insurance business and its underwriting information in assessing the risk to decide pricing terms and conditions for cover to explain it to their insurers.
Advise their customers regarding appropriate insurance coverage and terms according to their needs.
Maintain a database of current insurance products and services for a detailed knowledge of current market trends.
Submit the quotation received from the insurer for clients to consider.
Act promptly on instructions from a client and provide them with written acknowledgments and progress reports.
Assist clients in paying their premiums. Let them know about the current trends.
Provide insurance consultancy and risk management advisory services.
Assist in negotiating the claims and maintain proper records of such claims.
According to the IRDAI regulations, Direct Insurance Brokers can be further classified into three categories:
Life Insurance Direct Brokers: They are India's most sought-after insurance brokers. They provide Insurance and risk management services to clients seeking life insurance policies in the country.
General Direct Broker: This kind of broker license is issued to a property insurance broker. Also, auto insurance and health Insurance Broker licenses are issued under this kind of broker license.
Direct Broker (Life & General): This broker insurance certificate is for businesses that want to engage in life and general insurance policies.
A reinsurance broker is a type of insurance Broker registered under the Authority who solicits and arranges reinsurance for its clients with insurers or reinsurers with reinsurers or insurers located in India or abroad; and/or provides claims consultancy, Risk Management services, or other similar services as permitted under IRDAI (Insurance Brokers) Regulations of 2018 for remuneration and/or a fee.
Acquaintance with the client's business and risk retention philosophy
Create a database to maintain records of the insurer's business relating to insurance products and services
Advice the in-need insurers regarding the reinsurance cover available in the international insurance and reinsurance markets
Maintain a database of insurance products and services available in the reinsurance markets, with the solvency ratings of individual insurers
Provide insurance consultancy and risk management services for reinsurance to potential customers
Keep multiple insurers in your canon for extending recommendations to their clients.
Carry out negotiations with insurers on behalf of your client
Assist in the case of commutation of reinsurance contracts placed with them
Act promptly on instructions from a client and providing it written acknowledgments and progress reports
Collect and remit the premiums and claims within an agreed-upon time
Assist in the negotiation and settlement of claims on behalf of your customers
Maintain proper records of your claims
Exercise due care and diligence when selecting insurers and international insurance brokers regarding their respective security ratings and establishing responsibilities when engaging their services
A composite broker is a type of insurance broker, registered under the Authority, who solicits and arranges the Insurance and/or reinsurance for its clients with insurers and/or reinsurers located in India and/or abroad; and/or provides claims consultancy, Risk Management services or other similar services as permitted under IRDAI (Insurance Brokers) Regulations of 2018 for remuneration and/or a fee.
A composite broker can carry out any of the duties previously mentioned in the direct broker or the reinsurance broker duties list.
In India, insurance brokers fall into three categories: Direct Insurance Broker (Life, General, or both Life & General), Reinsurance Broker, and Composite Broker. IRDAI issues separate insurance licenses to businesses intending to operate in each of these categories. This means a Direct Insurance Broker cannot offer the services of a Reinsurance Broker, which requires a distinct license.
To get a broker license from IRDAI, connect with Registrationwala. We’ll help you in the application process, and increase your chance of getting this license!
Q1. Which authority issues insurance broker license to businesses wanting to operate as insurance brokers in India?
A. The Insurance Regulatory and Development Authority of India (IRDAI) issues insurance broker license to businesses so they can operate as insurance brokers in the country.
Q2. Who is a Reinsurance Broker?
A. It is an intermediary who assists insurance companies to purchase reinsurance policies from reinsurers (i.e., insurance companies providing reinsurance policies).
Q3. Which primary regulation governs the insurance brokers in India?
A. The IRDAI (Insurance Brokers) Regulations 2018 is the primary regulation governing the insurance brokers. It outlines licensing, code of conduct, compliance, and operational requirements.
Q4. Who is a Composite Broker?
A. A composite broker is an insurance broker who conducts both direct insurance and reinsurance business operations.
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