You can open an insurance brokerage firm with an insurance broker license. It’s a company that operates as a go-between for an insured and an insurer. It is a business entity that is licensed by the IRDA under the Insurance Brokerage program, which is based on strict eligibility criteria.
In this article, we will discuss the purpose behind this license. After reading this article, you can decide whether or not this license is suitable for your requirements.
What is an Insurance Broker License?
Before we dive into the purpose, we must know about the license itself. An Insurance Broker License is the certificate of registration issued to companies, LLPs or societies. By the Insurance Regulatory and Development Authority of India. It is a license to:
- Act as an intermediary between the insured and the insurer
- Become the representative of the client
- Who provides client with premium payment support
- Give complete assistance to those seeking insurance policies in India
To conclude it, your job is to act as the foundation between the client and the companies that can be made.
The following are the things that you are not allowed to do as an insurance broker:
- You are not allowed to lead the client astray
- Under no circumstances, you have permission to fabricate the terms and conditions of the license.
- And, you can’t cheat the client in anyway whatsoever.
But how can the IRDA watch over the way you conduct your insurance broking business?
That’s where the insurance broker license comes into play.
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Reason behind the insurance of insurance broker License
Following is the list of reasons why the IRDA has made the Insurance Broker License mandatory in India:
Watching over the insurance market
The insurance market is always in a flux, prompting the IRDA to ensure that all the regulations align with the continuous changes.
Ensuring that all the insurance brokers follow the regulatory measures
Not every insurance broker pick up the profession for pure reasons. Greed is what drives some of them. As the IRDA understands where this dubious aspect can take the brokers, it has created a code of conduct that every broker must adhere to.
Protecting the interest of the policy holders
It is the technical complexity of the insurance market that ends up turning many policy holders into victim. And while the IRDA cannot do much in the way of reducing that complexity, they can provide safeguards to ensure that all the policyholders remain safe. Surveyor and Loss Assessor is one of the example of that safeguard.
Maintaining the sanctity of the insurance market
Not a day goes by when the insurance market is not going through changes. Someone has to be there to ensure that these changes don’t destroy the market itself. The role of putting that leash is the responsibility of the Insurance Regulatory and Development Authority of India.
An insurance broker license is not just a permission, it is a regulatory tool to control the conduct of insurance brokers in India. Without it, the service providing will run amok- fooling everyone. Therefore we have clarify through this article about all the things that you will require to get start.
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