Insurance Marketing Firms (IMFs) serve as a comprehensive platform for offering various financial products and insurance services. Established under the IRDAI (Registration of Insurance Marketing Firm) Regulations, 2015, IMFs are structured to operate on an open architecture model, allowing them to tie up with up to two life, two general, and two health insurance companies, along with specific partnerships with Agriculture Insurance Company of India Ltd. and Export Credit Guarantee Corporation (ECGC).
Eligibility and NOC Process
Before registering as an IMF, applicants must first obtain a No Objection Certificate (NOC) from the Insurance Regulatory and Development Authority of India (IRDAI). The NOC is essential for registering the IMF name with the Registrar of Companies (ROC) and remains valid for six months from the date of issuance.
Steps to apply for NOC include:
- Register on the IMF portal (https://imf.irda.gov.in).
- Request an NOC from IRDAI, mentioning the firm name that includes “Insurance Marketing / IMF”.
- Once the NOC is issued, the applicant can proceed with company incorporation.
Application Procedure for IMF Registration
After obtaining the NOC and incorporating the firm, the applicant must register on the IMF portal within a year and complete the following steps:
- Submission of Form A: Fill in all required fields and upload relevant documents.
- Non-refundable Application Fee: A fee of ₹5,000 must be paid via the IMF's bank account.
- Fit & Proper Criteria: Provide declarations from directors or managing partners to meet IRDAI's standards.
- Principal Officer Certification: Submit the pass certificate of the Insurance Marketing Firm Exam for the principal officer and proposed Insurance Sales Persons (ISPs).
- Qualification Documents: Include qualification and experience certificates for the principal officer and ISPs.
- Net Worth Certificate: Provide a certified net worth statement from a Chartered Accountant, ensuring the firm's net worth meets the required threshold.
- Bank Statement: Provide a bank statement as supporting evidence of net worth.
- Company Documents: Submit a copy of the Memorandum of Association (MoA) and Articles of Association (AoA), or the LLP Agreement if applicable.
- Business Plan and Organization Structure: Present a three-year business plan with projected activities, income, and an organizational chart.
- Infrastructure Details: Provide proof of office space, equipment, manpower, and other relevant infrastructure.
- Consent Letters: Obtain at least one consent letter from an insurance company willing to work with the IMF.
IMF Operational Framework
Once registered, IMFs are permitted to offer a range of insurance products and financial services, as regulated by various authorities including RBI, SEBI, and PFRDA. They are limited to operating within three districts of a state, providing retail insurance products for general insurance and the full spectrum of life insurance products.
IMFs may also distribute other financial products with the required approvals, creating a one-stop shop for individuals looking for financial solutions across different stages of life. Their ability to tie up with a limited number of insurers ensures diversity in offerings while maintaining focus on customer needs.
Conclusion
Becoming an IMF involves a rigorous registration process to ensure that the firm meets all regulatory requirements. The process starts with obtaining an NOC, followed by company incorporation, and fulfilling all compliance measures set by IRDAI. By adhering to these standards, IMFs can provide a wide array of financial and insurance services, making them a crucial player in India's evolving financial ecosystem.
Related Topic: Overview of Insurance Broker License
