Insurance broker capital and deposit requirements in India
Category-wise IRDAI minimum capital, continuing net-worth, and fixed-deposit requirements for direct, reinsurance, and composite insurance brokers in India.
A direct broker needs Rs 75 lakh minimum capital, Rs 50 lakh net worth, and a Rs 10 lakh fixed deposit. A reinsurance broker needs Rs 4 crore minimum capital, Rs 2 crore net worth, and a Rs 40 lakh deposit. A composite broker needs Rs 5 crore minimum capital, Rs 2.5 crore net worth, and a Rs 50 lakh deposit.
Minimum capital by broker category
The applicant must bring in the prescribed paid-up capital or contribution before IRDAI grants registration. The amount depends on the broker category sought.
- Direct broker: Rs 75 lakh
- Reinsurance broker: Rs 4 crore
- Composite broker: Rs 5 crore
Continuing net-worth requirement
After registration, the broker must maintain continuing net worth at the prescribed level and restore any shortfall immediately. A half-yearly auditor-certified net-worth certificate must be submitted to IRDAI.
- Direct broker: at least Rs 50 lakh
- Reinsurance broker: at least Rs 2 crore
- Composite broker: at least Rs 2.5 crore
Fixed deposit with an IRDAI lien
Before commencing business, the broker must place the required amount as a fixed deposit with a scheduled bank. The deposit is subject to an IRDAI lien, cannot be used as security for a loan or overdraft, and cannot be released without prior written permission from the Authority.
- Direct broker: Rs 10 lakh
- Reinsurance broker: Rs 40 lakh (10% of minimum capital)
- Composite broker: Rs 50 lakh (10% of minimum capital)
Source
IRDAI (Insurance Brokers) Regulations, 2018, amended up to 30 October 2019
Anchors: Regulations 19, 22, and 23; Schedule I, Form D