FAQs on IFSC Insurance Intermediary Offices (IIIOs)

1.

i. an intermediary or insurance intermediary registered with the Insurance Regulatory and Development Authority of India (IRDAI);

ii. a foreign insurance intermediary registered with home country regulatory or supervisory authority;

iii. an Indian company incorporated under the Companies Act, 2013, or a firm or a co-operative society;or

iv. a body corporate incorporated under the laws of any country outside India.

1. In an incorporated form

2. In an unincorporated form (i.e. branch form)

1. If applicant is registered as an intermediary or insurance intermediary with IRDAI

a. It holds a valid certificate of registration issued by IRDAI, which is not withdrawn, cancelled or suspended;

b. It has acted as an insurance intermediary in such category for which it is registered; and

c. It has obtained a “No-objection Certificate” from IRDAI to establish branch office in IFSC;

2. If applicant is registered or licensed as an insurance intermediary in a jurisdiction

outside India

a. It holds a valid certificate of registration issued by its home country regulatory or supervisory authority, which is not withdrawn, cancelled or suspended;

b. It has acted as an insurance intermediary in such category for which it is registered;

c. It should be from a FATF compliant jurisdiction or country;

d. It should be registered or certified in a national regulatory environment with whom the Government of India has signed Double Taxation Avoidance Agreement; and

e. It has obtained “No-objection certificate” from its home country regulatory or supervisory body to establish a branch office in IFSC.

3. The applicant has to fill Form A for registration.

Requirements for setting up presence in an IFSC in an incorporated form:

An entity which is a company incorporated under the Companies Act, 2013 or a firm or a co-operative society or a body corporate incorporated under the law of any country outside India shall meet the following requirements:

1. The applicant shall have minimum net worth or paid-up equity capital, whichever is applicable, as specified in the IIIO Regulations;

2. The applicant is from a FATF compliant jurisdiction or a country; and

3. The applicant is registered or certified in a National Regulatory Environment with whom the Government of India has signed Double Taxation Avoidance Agreement.

4. The applicant has to fill Form B for registration

insurance broker means a person registered with the Authority under the IIIO
Regulations, who is a direct broker, a reinsurance broker or a composite broker.

and/or reinsurers, and/or provide risk management services, as permitted under IIIO Regulations.

a. Insurance distributor:

i. Composite Broker;

ii. Corporate Agent;

iii. Direct Broker;

iv. Reinsurance Broker;

b. Insurance claim service provider:

i. Surveyor and Loss Assessor;

ii. Third Party Administrator.

i. A company incorporated under the Companies Act, 2013;

ii. A co-operative society registered under the Co-operative Societies Act, 1912 or under any other law for the time being in force in any State relating to co­operative societies or under the Multi-State co-operatives societies Act, 1984;

iii. A limited liability partnership formed under the Limited Liability Partnership Act, 2008; or

iv. Any other legal form as may be specified by the Authority.

i. A company incorporated under the Companies Act, 2013;

ii. A co-operative society registered under the Co-operative Societies Act, 1912 or under any other law for the time being in force in any State relating to co­operative societies or under the Multi-State co-operatives societies Act, 1984;

iii. A limited liability partnership formed under the Limited Liability Partnership Act, 2008;

iv. A banking company as defined in clause (4A) of Section 2 of the Insurance Act;

v. A banking unit set up in IFSC;

vi. A regional rural bank established under Section 3 of Regional Rural banks Act, 1976;

vii. A micro lending finance organization covered under the cooperatives society Act, 1912 or a Non-banking financial company registered with RBI; or

viii. Any other legal form as may be specified by the Authority.

i. A company incorporated under the Companies Act, 2013;

ii. Any other legal form as may be specified by the Authority.

i. A company incorporated under the Companies Act, 2013;

ii. A limited liability partnership formed under the Limited Liability Partnership Act, 2008;

iii. Any other legal form as may be specified by the Authority.

1. If, after considering the application, the Authority is of the opinion that registration cannot be granted, it shall communicate the deficiencies to the applicant giving it thirty (30) days’ time to rectify them.

2. If the applicant fails to rectify such deficiencies to the satisfaction of the Authority within the specified time, the Authority may refuse to grant registration and shall communicate the same to the applicant, giving reasons for such refusal.

3. However, no such refusal shall be made by the Authority without giving the applicant an opportunity to make written submissions on the grounds on which the registration is proposed to be refused.

1. IIIO registered as direct insurance broker is permitted to perform the activities of direct insurance business from and within the IFSC, from other SEZs in India and from outside India;

2. IIIO registered to solicit direct insurance business, shall not solicit direct insurance business from the Domestic Tariff Area (DTA) in India except in accordance with Section 2CB of the Insurance Act;

3. IIIO registered as composite broker or reinsurance broker is permitted to perform the activities of reinsurance broker or composite broker within the IFSC, in other SEZs in India, DTA and outside India;

4. No IIIO shall be permitted to transact a class of business, which is not permitted in its certificate as issued by the Authority;

5. The TPAs, Surveyors and Loss Assessors registered as IIIO, shall not render

services for the policies other than those issued by an IFSC Insurance Office (IIO) and an insurer domiciled outside India. However, TPA can service foreign travel policies and health policies issued by Indian insurers covering medical treatment or hospitalization outside India.

transactions of the IIIO shall be carried out in freely convertible foreign currency other than Indian Rupee.

2. A renewal application received after sixty (60) days from the date on which the registration ceases to remain in force will be considered only after a lapse of twelve (12) months from the date of submission of the late application. However, during the interregnum, the certificate of the IIIO shall cease to exist and it shall not solicit any new business, except servicing the existing policies till the expiry of the contract.

However, if an IIIO is not able to commence business within the specified period, it can, before the expiry of the time, but at least thirty (30) days in advance, make an application, for an extension of time to the Chairperson of the Authority.

On receipt of the application, the Chairperson of the Authority, shall examine it and communicate the decision there on, in writing. No extension of time shall be granted by the Chairperson of the Authority beyond eighteen (18) months from the date of grant of certificate under these Regulations.

1. Every IIIO shall purchase and maintain at all times a professional indemnity insurance cover as specified in SCHEDULE-IV of the IIIO Regulations throughout the validity of its Registration.

2. In appropriate cases the Authority may allow a newly registered IIIO to purchase such a policy within twelve (12) months from the date of grant of certificate.

3. IIIO established in a branch form shall comply with the professional indemnity policy requirements at its head office and shall have endorsement on such policy to the effect that liabilities if any, arising out of operations at the IFSC branch office are also covered in such policy.

i. a balance sheet as at the end of each financial year;

ii. a profit and loss account for that period, which shall be maintained on accrual basis;

iii. a statement of cash/fund flow (direct method);

iv. Additional statements on its business as may be specified by the Authority.

However, for an IIIO set up in an unincorporated entity form (branch form), it shall refer to the financial year followed by its home country’s regulatory or supervisory authority.

However, in case of such IIIO (who is established as branch in an IFSC), it shall inform the Authority about changes effected by way of scheme of amalgamation or merger & acquisition within thirty (30) days of such change.

2. Reinsurance Broker – USD 550,000

3. Composite Insurance Broker – USD 675,000

If setup in an unincorporated/ branch form:

1. Direct Insurance Broker – USD 10,000

2. Reinsurance Broker – USD 55,000

3. Composite Insurance Broker – USD 67,500

1. General activities and functions:

i. Familiarize itself with the client’s business and risk management or retention philosophy;

ii. Render advice on appropriate insurance cover and terms;

. Maintain a database of available insurance and reinsurance markets;

iii. Act promptly on instructions from a client and provide it with written acknowledgements and progress reports;

iv. Negotiate with an insurer/reinsurer on client’s behalf;

i. Maintain proper records of claims;

vii. Maintain a register of its broking staff;

2. Risk Management Services

i. An insurance broker may charge the client fee for the services rendered by it to the client for risk management services or other similar services;

ii. The insurance broker can undertake this activity only for commercial risks based on the written confirmation from client for those fees;
iii. The Insurance broker cannot receive both the remuneration and reward and fees for the same risk management services;

iv. The insurance broker shall obtain a written mandate from the client to offer risk management services and shall keep a record of risk management services offered to the client;

v. In case the insurance broker does not have the necessary skills and resources, it may engage external experts or specialists for undertaking the risk management services or such other similar services.

vi. The insurance broker shall be responsible for all acts of the external experts for undertaking risks management services.

3. Co-broking:

i. Two or more registered insurance brokers can jointly handle the broking of insurance requirements of any client with the written consent of the client.

ii. The client may appoint more than one insurance brokers in writing to jointly handle the broking of its insurance requirements and may also decide the manner in which the remuneration or fee payable on the business be shared among them.

iii. The way the remuneration is shared among the co-brokers shall be disclosed to the insurer.

4. Direct Co-broking:

i. The insurer will be guided by the instructions of the client with regard to payment of remuneration to each co-broker for their share.

ii. Co-broking is not permitted for individual and retail lines of insurance business.

5. Reinsurance Co-broking:

i. The insurer will be guided by the instructions of the client with regard to payment of remuneration to each co-broker for their share or to the lead co-broker who will then be responsible to pay the other co-brokers.

ii. The name and other particulars of the foreign reinsurance co-broker shall be disclosed to the insurer.