Insurance Regulatory & Development Authority
Master Circular Ref: IRDAI/F&I/CIR/RIC/90/4/2023 Date: 24.04.2023
Master Circular on Registration of Indian Insurance Company, 2023
The Authority has notified the IRDAI (Registration of Indian Insurance Companies) Regulations, 2022 (herein after referred to as “Regulations”). In exercise of the powers conferred by Section 14 of the IRDA Act, 1999, the Authority hereby issues this Master Circular to specify various forms as referred in the said Regulations and to provide clarifications on various provisions of the said Regulations.
The following Guidelines and Circulars shall stand repealed from the date of issuance of the Master Circular:
1. IRDAI (Investment by Private Equity Funds in Indian Insurance Companies) Guidelines, 2017.
2. Guidelines for Listed Indian Insurance Companies, 2016 dated 15.06.2017.
3. Circular No. IRDA/F&A/CIR/TRSH/195/07/2020 dated 22.07.2020 on Transfer of Shares of the Insurance Companies.
4. Circular No. IRDA/F&A/CIR/EHP/162/09/2018 dated 27.09.2018 on Details of Equity Holding Pattern of Insurance Companies.
This Master Circular shall come into force from the date of its issuance and shall be in effect for a period of 3 years from the date of its issuance unless reviewed and/or extended earlier.
(Rakesh Joshi)
Member (F&I)
Table of Content
| S. No. | Regulation No. | Description | Page No. |
| I | 5(1)(ii) | No-Objection Certificate | 2 |
| II | 5(1)(iii) | Application for Issuance of Form IRDAI/R1 | 2 |
| III | 5(2)(i)/(ii) | Form IRDAI/R1 | 3 |
| IV | 5(2)(iv)/(v) & 5(3(i) |
Form IRDAI/R2 | 11 |
| V | 11 | Form IRDAI/R4 | 16 |
| VI | 6(10) & clause 1(a) of Schedule 2 | Form IRDAI/ToS: Application for approval u/s 6A | 17 |
| VII | Clause 7(a) of Schedule 2 | Equity Shareholding Pattern & Fit and Proper Declaration | 22 |
| VIII | – | Transitory Provisions and Clarification | 28 |
I. No-objection Certificate (NOC) [refer Regulation 5(1)(ii)]
The application for issuance of No-Objection Certificate (NOC), as referred in Regulation 5(1)(ii) shall be filed online at IRDAI website i.e. www.irdai.gov.in [currently, the form to apply for NOC for ‘New Insurers Registration’ is placed under the ‘E-services’ section on the website of the Authority.]
II. Application for Issuance of Form IRDAI/R1 [refer Regulation 5(1)(iii)]:
The application for issuance of Form IRDAI/R1, as referred in Regulation 5(1)(iii) shall be made on the letter head of the applicant, duly signed by its authorized person and shall be accompanied with the following documents:
1. Copy of Certificate of Incorporation of the applicant.
2. Copy of Memorandum of Association and Articles of Association of the applicant.
3. A Resolution passed by the Board of the promoter of the applicant for following:
(i) Approval for entering into the insurance business.
(ii) Authorization of person to act on behalf of the promoter.
4. A Resolution passed by the Board of the applicant for the following:
(i) Approval for entering into the insurance business.
(ii) Authorization of person to act on behalf of the applicant.
III. Form IRDAI/R1 [Refer Regulation 5(2)(i)/(ii)]
| S. No. | Particulars | Response |
| A) Information about Applicant | ||
| 1 | Basic Details
i. Name ii. Address (Registered Office and Communication address) iii. Contact details (Name of Authorized person, email id and phone number) iv. Legal status (Company, Cooperative Society or Statutory body) and CIN Number v. Registration Number and address of registrar vi. Date of incorporation vii. Permanent Account Number |
|
| 2 | Class of Insurance Business for which registration is sought (Refer Regulation 3) | |
| 3 | Capital Structure
i. Amount of Authorized capital, total number of shares and face value per share ii. Amount of Issued capital and number of shares iii. Amount of Paid-up capital and number of shares iv. Details if there are different classes of shares v. Details if there are different voting rights |
|
| B) Shareholders of applicant (separate for each promoter and investor) | ||
| 1 | Basic details:
i. Name (including previous names, if any) ii. Address (registered address and communication address) iii. Contact details (Name of Authorized person, email id and phone number): iv.Legal status (Company, LLP etc.) and CIN Number v. Number and date of incorporation (date of birth in case of individual) vi. Residential status (in case of non-resident entity, please specify the country of residence and incorporation) vii. Permanent Account Number viii. Whether registered with any financial sector regulator in India or outside India. If yes, provide details thereof. ix. Ownership and control status (as per DPIIT Guidelines, Govt of India and FEMA as may be applicable) x. Proposed status of shareholder (i.e. Investor or Promoter) xi. In case of ‘Indian Promoter’, state the applicable sub-regulation under Regulation 2(h) |
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| 2 | Capital Infusion & Commitments:
a) Capital Infusion i.% of equity stake proposed to be acquired. ii. Amount proposed to be infused in applicant iii. Source of funds to infuse capital in applicant iv. Source and capability to meet future capital requirement of the applicant b) Capital and other Commitments i. Details of capital and other commitments to the applicant ii. Details of financial liabilities and other financial commitments iii. Details of obligations and commitments of applicant to shareholders |
|
| 3 | Assets and Investments:
a) Provide details of investments i. Investment in other insurer(s) or other applicant(s) in India ii.Investment in any insurance intermediary(ies) in India iii. Investment in insurers or insurance intermediaries outside India iv. Other investments in India v. Other Investments outside India vi. Other assets held b) Details of Liquid assets and investments |
|
| 4 | Business record and experience:
i. Present occupation ii. Total number of years of operation in business/profession iii. Business record and experience in insurance business including insurance intermediation in India iv. Business record and experience in insurance business including insurance intermediation outside India v. Business record and experience in other business(es) in India or outside India. |
|
| 5 | Due Diligence:
i. Past record of regulatory interventions, restrictive directions and/or proceedings including conviction against the shareholder or any of its promoter / group entities or any of their directors or KMPs, by any regulatory / statutory / judicial bodies in India or outside India. Please also furnish details of pending proceedings, if any. ii. Whether the shareholder has ever been adjudged as insolvent. If yes, provide details thereof. iii. Whether the shareholder or its directors or key managerial personnel has ever been accused of or penalized for Insider trading, fraudulent or unfair trade practices or market manipulation iv. Details of civil/criminal/regulatory action taken / pending against the proposed shareholder or its directors or key managerial personnel. v. Whether the shareholder or its directors have ever been refused (or had revoked) a license or authorization to carry on any regulated financial business. If yes, provide details thereof. vi. Details of any censure or disciplinary actions initiated by any Government Regulatory or professional body against the shareholder or its directors or key managerial personnel. vii. Whether any qualification, reservation or adverse remark on the books and accounts and financial statements was made by the auditors in their report of the shareholder, during the past five financial years. viii. Whether any Governmental Regulatory or Professional Body has ever investigated any company, firm or organisation with which the directors and key persons of the shareholder have been associated as a director, officer, manager or shareholder. (If yes, provide details thereof) |
|
| C) Business Plan | ||
| 1 | Geographical spread of business including states and union territories in which company plans to operate | |
| 2 | Distribution channels and strategy | |
| 3 | Marketing strategy | |
| 4 | Underwriting strategy | |
| 5 | Reinsurance strategy | |
| 6 | Products to be sold
i. Pricing strategy and Profitability criteria used in product pricing ii. Product features such as coverage periods, premium levels, non-forfeiture values, loan provisions etc. iii. Average policy size |
|
| 7 | Investment strategy | |
| 8 |
Information Technology (IT) i. IT systems to be deployed and areas of deployment ii. Cyber security policy iii. Degree of interconnectivity iv.Whether the systems to be bought off the shelf, developed locally or imported into India by the foreign investors. v. Degree to which the systems will be used for policyholder servicing. vi. Details of procedures and operations which will remain manual vii. Description of how the IT system will be used to develop the required Management Information System. |
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| 9 | Customer service
i. Policies and systems to be put in place w.r.t. grievance redressal ii. Strategy to increase insurance awareness iii. Proposed contribution to increase insurance penetration iv. Service standards planned to be introduced for various aspects of customer service v. Time schedule for various types of services proposed to be offered. |
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| 10 | Risk Management Framework
i. Enterprise Risk Management ii. Business Continuity Plan iii. Nature of internal controls to be put in place. |
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| 11 | Financial Projections for 5 years along with key assumptions underlying the assumptions: The projections shall be duly approved by the Board of Directors of the applicant. The projections shall be accompanied by a certificate from a fellow actuary having Certificate of Practice from Institute of Actuaries of India with confirmation to the following effect:
a) The projections are reasonable and workable. b) Certification of projections for the purpose of R1 of the applicant c) The financial projections are carried out on a technically sound basis. d) The assumptions / calculations are in line with applicable IRDAI Regulations / norms. e) He/she does not have any conflict of interest in assessment of projection exercise. f) The solvency ratio / reserves etc. have been calculated in line with the IRDAI (Assets, Liabilities, and Solvency Margin of Life Insurance Business) Regulations, 2016 as amended from time to time. g) The other assumptions / calculations are also in line with applicable IRDAI Regulations The projections shall include, at the minimum, the following: i. Premium income (ticket size) ii. Number of lives, policies, agents and insurance intermediaries iii. Segment wise Premium income iv. Segment wise claims or benefits, policyholders surplus and bonus declaration. v. Segment wise retention vi. Underwriting profit vii. Investment income viii. Operating Expenses (with break up in major heads), ix. Commission payouts x. Overall Expenses of Management xi. First year and renewal expense ratio xii. Available Solvency Margin, Required Solvency Margin and Solvency Ratio xiii. Capital requirements: Total, Indian and Foreign xiv. Break-even period and return on capital xv. Key Ratios (separate for each segment) a. Retention ratio b. Incurred Claim Ratio, Combined Ratio and Loss Ratio (as applicable) c. Persistency Ratio, if applicable xvi. Capital expenditure with break up in major heads xvii. Statutory reserves and Reserving methods used. xviii. Size of sales staff, sales support staff and administrative staff xix. The following as per the formats applicable for insurance companies under extant Regulations/Circulars: a. Cash flow statement b. Revenue Account c. Profit & Loss Account d. Balance Sheet (In addition, a sensitivity analysis of the business projections shall also be submitted on optimistic and pessimistic scenarios w.r.t. following assumptions: i. Solvency ratio ii. Volume of Sales iii. Average size of sales iv. Claims experience v. Size of sales force vi. Levels of mortality, morbidity, policy termination (Life) vii. Administrative expenses (including inflation) viii. Investment income ix. Break even period) |
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| D) Action plan to ensure compliance with the following | ||
| 1 | Protection of Policyholders Interest including customer service and grievance redressal | |
| 2 | Motor Third Party Obligations (if applicable) | |
| 3 | Rural and Social Sector Obligations | |
| E). Details and Documents to be submitted along with the application | ||
| 1 |
i. All the details/documents as specified in Regulation 5(2)(ii) ii. Copy of Resolution passed by Board of each of the promoter and investors authorizing investment in the applicant. iii. Merchant Banker certificate, as applicable (as per Reg 6) iv. Copies of approvals, as may be applicable, obtained by applicant, promoter and investor: a. Approval of relevant jurisdiction or sector regulator(s); b. Approval under Foreign Exchange Management Act, 2000 c. Approval of Competition Commission of India d. Approval from other statutory bodies v. Particulars of the previous applications, if any, filed with the Authority by the applicant or any of its promoter(s) or investors(s). vi. Changes, if any, in any of the information submitted to the Authority vii. Proof in support of payment of the fee as specified in the Regulations viii. Letter of consent of promoter/investor confirming compliance with all stipulations as may be laid down by the IRDAI. ix. Copy of agreement in place / proposed to be entered into between the applicant and/or amongst the shareholders. x. Details of Directors and Key Managerial Personnel of the applicant, if finalized. xi. Details pertaining to proposed promoters and investors, as applicable a. Net Worth Certificate duly certified by practicing Chartered Accountant (or its equivalent in the jurisdiction of incorporation in case of a foreign shareholder) which inter-alia includes bifurcation of assets on the basis of their liquidity. b. Financial statements for last 5 financial years c. Income tax returns filed for 5 years prior to the date of application. d. Memorandum of Association and Articles of Association e. Shareholding pattern / details of partners f. Undertaking to infuse capital in insurer to meet its solvency and/or business requirement. g. Details of capital raised during the past 5 years (if applicable) h. List of Directors and Key Managerial Personnel i. Brief note about the background, financial strength etc. j. Details of directorship, partnership, shareholding in other entities. k. Any other information, as may be considered relevant. xii. Shareholding pattern as per annexure 1 to Form IRDAI/R1 xiii. Self-attested certificate confirming that the information furnished in form IRDAI/R1 along with the attachments therewith is correct and complete, and nothing has been concealed and/or suppressed. |
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Certification
I, ____________________ the undersigned, solemnly declare that the facts given in this application form on behalf of M/s…(Name of Applicant)…. are true to the best of my knowledge and that the projections and estimations are based on reasonable assumptions.
Date:
Place:
Signature of the Authorised Person
Name and Designation
(with Seal)
health insurance co r raising premium s enormously 30 to 40% yrly without any valid reason
Regulatory body must check this manmani, why they r keeping cap on payment s
must inform insurers about reasons duly approved by govt