In a significant stride towards enhancing the regulatory landscape, the International Financial Services Centres Authority ( IFSCA Official ) has unveiled a comprehensive framework for Insurance Intermediary Offices (IIIOs) - Corporate Agents operating within GIFT City IFSC. This new framework aims to streamline operations, ensure compliance, and foster growth in the insurance sector by clearly defining the roles, responsibilities, and regulatory requirements for corporate agents. By establishing robust guidelines, the IFSCA seeks to create a conducive environment for insurance intermediaries, encouraging transparency and professionalism while enabling them to efficiently serve policyholders and contribute to the financial ecosystem.
Key Definitions
Corporate Agent: A person registered with the Authority who undertakes the solicitation and servicing of insurance business.
Eligible Entities
Entities eligible for registration as a Corporate Agent include:
Companies incorporated under the Companies Act, 2013
Co-operative societies registered under the Co-operative Societies Act, 1912 or other relevant state laws
Limited liability partnerships (LLPs) formed under the LLP Act, 2008
Banking companies as defined in clause (4A) of Section 2 of the Insurance Act
Banking units set up in IFSC
Regional rural banks established under Section 3 of the Regional Rural Banks Act, 1976
Micro lending finance organizations or non-banking financial companies registered with RBI
Any other legal form as specified by the Authority
Eligible Business
IIIOs registered as direct insurance brokers can perform direct insurance business activities within IFSC, other SEZs in India, and outside India. However, they cannot solicit direct insurance business from the Domestic Tariff Area (DTA) in India, except in accordance with Section 2CB of the Insurance Act. Composite or reinsurance brokers can perform their respective activities within IFSC, other SEZs, DTA, and outside India.
Net Worth & Capital Requirements
Minimum Capital Requirements for Insurance Intermediary
Corporate Agent: $75,000
Minimum Net-Worth Requirements for Insurance Intermediary
Corporate Agent: $75,000
Minimum Capital Requirements for Insurance Intermediary Registered as a Branch in the IFSC
Corporate Agent: $7500
Professional Indemnity Insurance
Corporate agents whose insurance intermediation activities constitute more than fifty percent of their total revenue must maintain professional indemnity insurance throughout the registration period. The indemnity cover should be at least twice the total annual remuneration of the corporate agent, with a minimum of USD 25,000 and a maximum of USD 13.5 million.
Ceiling on Business from a Single Client
Corporate agents must ensure that no more than 50 percent of their remuneration comes from any one client in a financial year.
Functions and Activities of Corporate Agents
Corporate agents can have arrangements with up to three general insurers, three life insurers, and three health insurers. They must:
Disclose arrangements with insurers to the Authority within 15 days
Ensure no compulsion or promises are made to distribute insurer products against policyholder interests
Service policies until expiry or for six months post-termination of arrangements
Prohibit signing fees or direct incentives from insurers
Fee Structure
Fee Structure for Insurance Corporate Agents:
Application Fee: $500
Registration Fee: $500
Annual Fee: $200 (starting from the end of the financial year in which registration is sought)
Tax Benefits
100% Tax Exemption: Business profits are fully exempt for 10 years out of the first 15 years of operation.
Minimum Alternate Tax (MAT): Reduced MAT rate of 9% for IFSC units.
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Code of Conduct
General Code of Conduct
Corporate agents must follow professional standards and act in the interest of policyholders by:
Conducting dealings with clients with good faith and integrity
Ensuring clients understand their relationship with the corporate agent
Keeping client information confidential
Maintaining the security of confidential documents
Avoiding conflicts of interest
Pre-sale Code of Conduct
Corporate agents must:
Identify themselves and disclose registration details to prospects
Provide accurate information about insurance products
Disclose the scale of commission if asked
Explain the importance of disclosure in insurance contracts
Post-sale Code of Conduct
Corporate agents must:
Advise policyholders on nominations, address changes, and options
Ensure timely premium remittance and renewal notices
Assist in claim settlements and notify clients of any claim decisions promptly
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