The Insurance Broking Sector in India

India’s insurance sector is one of the fastest-growing in the world. With a population of over 1.4 billion, growing awareness about financial protection, and aggressive government push through schemes like Pradhan Mantri Fasal Bima Yojana (PMFBY) and Ayushman Bharat, the demand for insurance products has never been higher. At the heart of this growth engine stands the Insurance Broker — a professional intermediary who plays a pivotal role in connecting policyholders with the most suitable insurance products from multiple insurers.

An insurance broker in India must be licensed by the Insurance Regulatory and Development Authority of India (IRDAI), the apex regulatory body overseeing the insurance sector. Unlike insurance agents who represent a single insurer, insurance brokers are independent intermediaries who represent the interests of the client and can deal with multiple insurance companies — making them an indispensable part of India’s insurance distribution ecosystem.

Whether you are a professional aspiring to enter the insurance distribution business, an existing financial services firm looking to expand your offerings, or a corporate entity seeking to facilitate employee benefits and risk management, this comprehensive 2026 guide covers everything you need to know about obtaining and maintaining an Insurance Broking License from IRDAI.

What is Insurance Broking? Understanding the Concept

Insurance broking refers to the professional activity of soliciting, negotiating, and placing insurance or reinsurance contracts on behalf of clients with one or more insurers. An insurance broker acts as a fiduciary to the client — their primary obligation is to the policyholder, not the insurer — which distinguishes them fundamentally from insurance agents.

Insurance brokers provide advisory services, help clients assess their risk exposures, recommend appropriate insurance products from across the market, assist in claims management, and provide ongoing policy servicing. In India, the business of insurance broking is regulated exclusively by IRDAI and no person or entity can carry on this business without a valid license from IRDAI.

Key Distinctions: Broker vs. Agent vs. Corporate Agent

Legal Framework Governing Insurance Broking in India

Insurance broking in India operates within a comprehensive legal and regulatory framework. Entities and professionals seeking to enter this space must be fully conversant with the following laws, regulations, and guidelines:

Primary Legislation

• Insurance Act, 1938 (Amended up to 2021): The foundational legislation governing the insurance sector in India. It provides the statutory basis for IRDAI’s powers and defines the categories of insurance business.
• Insurance Regulatory and Development Authority of India Act, 1999 (IRDAI Act): Establishes IRDAI as the independent regulatory body for the insurance sector and grants it comprehensive regulatory and supervisory powers.
• Insurance Laws (Amendment) Act, 2015: Significantly amended the Insurance Act, including provisions relating to intermediaries, capital requirements, and foreign investment in insurance.

Primary Regulations for Brokers

• IRDAI (Insurance Brokers) Regulations, 2018: The primary subordinate legislation governing insurance brokers — covering registration, categories, qualifications, net worth, code of conduct, and obligations. These regulations replaced the earlier 2013 regulations.
• IRDAI (Insurance Brokers) (Amendment) Regulations, 2022 & 2023: Important amendments updating capital norms, technology obligations, and compliance requirements for brokers.
• IRDAI Circular on Guidelines for Insurance Brokers (2024–2026): Various circulars issued periodically updating norms on solvency margins, E&O insurance, IT infrastructure, and policyholder servicing.

Other Relevant Laws and Regulations

• Prevention of Money Laundering Act (PMLA), 2002: Insurance brokers are reporting entities under PMLA and must comply with KYC, AML, and suspicious transaction reporting obligations.
• Income Tax Act, 1961: Tax compliance obligations for brokerage income, TDS on commissions, and GST applicability.
• Goods and Services Tax (GST) Act, 2017: GST at 18% is applicable on brokerage income earned by insurance brokers.
• Digital Personal Data Protection Act (DPDPA), 2023: Governs data privacy obligations for insurance brokers handling client information.
• Consumer Protection Act, 2019: Establishes consumer rights and the obligations of service providers including insurance intermediaries.
• Foreign Exchange Management Act (FEMA), 1999: Relevant for reinsurance brokers dealing with foreign reinsurers and for FDI norms in insurance broking entities.

Categories of Insurance Broking License in India (2026)

IRDAI grants insurance broking licenses under three distinct categories, based on the type of insurance business the broker intends to conduct. Each category has different capital requirements, scope of activities, and eligibility criteria.

Category 1: Direct Broker

A Direct Broker is licensed to solicit and procure insurance business (other than reinsurance business) from clients in India on behalf of insurance companies. Direct brokers work directly with retail and corporate clients.

Sub-categories:  Direct Broker (Life), Direct Broker (General), or Direct Broker (Life & General — also called ‘Composite’). A Composite Direct Broker can deal in both Life and General (including Health) insurance products.

• Minimum Net Worth: ₹75,00,000 (₹75 Lakh) — this is the net worth requirement at the time of application and must be maintained on an ongoing basis
• Deposit: ₹50,00,000 (₹50 Lakh) — to be deposited with any scheduled commercial bank and maintained at all times
• Scope: Can solicit insurance from all registered insurers operating in India
• Target Clients: Individual retail customers, SMEs, and corporate clients for insurance placement
• Renewal Frequency: License is valid for 3 years and must be renewed before expiry

Category 2: Reinsurance Broker

A Reinsurance Broker is licensed to solicit and procure reinsurance business for insurance companies operating in India. Reinsurance brokers facilitate the placement of risk with reinsurers, both domestic and foreign.

• Minimum Net Worth: ₹4,00,00,000 (₹4 Crore)
• Deposit: ₹1,00,00,000 (₹1 Crore) with a scheduled commercial bank
• Scope: Can deal with domestic and foreign reinsurers including Lloyd’s of London syndicates
• Clients: Primarily insurance companies and large corporate entities with significant risk exposures
• Special Condition: Must have qualified personnel with demonstrated reinsurance expertise

Category 3: Composite Broker

A Composite Broker holds a license that combines both Direct Broking and Reinsurance Broking activities. This is the most comprehensive and capital-intensive category.

• Minimum Net Worth: ₹4,00,00,000 (₹4 Crore)
• Deposit: ₹1,00,00,000 (₹1 Crore) with a scheduled commercial bank
• Scope: Can carry on both direct insurance broking and reinsurance broking in India
• Target Clients: Corporate clients, insurance companies, and multinational corporations with complex risk profiles
• Preferred by: Large broking firms, international broking groups, and conglomerates

Summary of Capital Requirements by Category (2026)

Eligibility Criteria for Insurance Broking License

IRDAI has prescribed detailed eligibility criteria that applicants must satisfy before applying for an Insurance Broking License. These criteria are designed to ensure that only financially sound, professionally qualified, and ethically fit entities enter the insurance broking business.

Eligibility for the Applicant Entity

• The applicant must be a company incorporated under the Companies Act, 2013 (or the Companies Act, 1956 for existing entities)
• The memorandum of association (MOA) must specifically permit the business of insurance broking
• The applicant must not be engaged in any other business other than insurance broking, unless specifically permitted by IRDAI
• Foreign companies cannot directly apply — they must establish an Indian subsidiary with the appropriate FDI structure
• FDI in insurance broking is permitted up to 100% under the automatic route (as per the Insurance Laws Amendment Act, 2021 and subsequent government notifications up to 2026)

Fit and Proper Criteria for Promoters and Directors

• Promoters and directors must possess good character, integrity, and relevant professional background
• No promoter or director should have been convicted of any criminal offence involving moral turpitude
• No director should be an undischarged insolvent
• No director or promoter should be an insurance agent, surveyor, or loss assessor (to avoid conflict of interest)
• IRDAI reviews the CIBIL and financial track record of key promoters

Principal Officer (PO) Requirements

Every insurance broker must designate a Principal Officer (PO) who is the primary responsible person for the licensed business. The PO must satisfy the following requirements:

• Minimum educational qualification: Graduate degree from a recognised university
• Minimum experience: At least 2 years of experience in life insurance, general insurance, or the financial services sector
• Mandatory Examination: Must pass the IRDAI-approved Insurance Broker Examination (conducted by the Insurance Institute of India — III or other IRDAI-approved examination bodies)
• The PO must be designated at the time of application and cannot be changed without IRDAI’s prior approval
• All key management personnel (KMP) involved in insurance broking activities must also hold valid broker qualifications

Infrastructure and Technology Requirements

• Dedicated office premises with adequate facilities for insurance broking operations
• Robust IT infrastructure for policy management, client records, and claims tracking
• Secure data storage system compliant with IRDAI’s IT security guidelines and DPDPA 2023
• Functional website (from 2024 onwards, IRDAI has encouraged all brokers to maintain an informative client-facing digital presence)
• Dedicated Grievance Redressal Officer and mechanism as per IRDAI’s IGMS (Integrated Grievance Management System)

Step-by-Step Application Process for IRDAI Insurance Broking License (2026)

The application process for an Insurance Broking License from IRDAI is a structured, multi-stage process. Below is a detailed walkthrough of every step from inception to licensing:

Stage 1: Pre-Application Preparation and Company Incorporation

1. Incorporate a private limited or public limited company under the Companies Act, 2013. Ensure the MOA includes insurance broking as a primary business activity.
2. Achieve the minimum net worth requirement through equity infusion from promoters or investors.
3. Identify and appoint a qualified Principal Officer (PO) who meets IRDAI’s educational and experience requirements.
4. Ensure the PO completes the IRDAI-approved Insurance Broker Examination and obtains the requisite qualification certificate.
5. Set up office premises with the required infrastructure and IT systems.
6. Open an escrow/deposit account with a scheduled commercial bank and deposit the required amount (₹50 Lakh for Direct Broker or ₹1 Crore for Reinsurance / Composite Broker).

Stage 2: Application Submission on IRDAI Portal

7. Access the IRDAI Online Portal (www.irdai.gov.in) — applications for Insurance Broking License are submitted online through the IRDAI Bima Vahak / regulatory portal.
8. Create an entity account and fill out the prescribed application form (Form B under IRDAI (Insurance Brokers) Regulations, 2018).
9. Upload all required documents in the prescribed format (see documents checklist below).
10. Pay the non-refundable application fee as stipulated by IRDAI:

Stage 3: Documents Checklist

The following documents must be submitted along with the online application:

• Certificate of Incorporation issued by the Registrar of Companies (ROC)
• Memorandum of Association (MOA) and Articles of Association (AOA)
• Board Resolution authorising the application and appointing the Principal Officer
• Audited financial statements (last 3 years, or projections for new companies)
• Net Worth Certificate from a Chartered Accountant (on the specified IRDAI format)
• Bank Certificate confirming the deposit of the required amount (₹50 Lakh / ₹1 Crore)
• PAN Card, Aadhaar, and educational/professional details of all promoters and directors
• CIBIL/credit report of promoters and directors
• Qualification certificate of the Principal Officer (PO) from IRDAI-approved examination body
• Resume/CV and experience proof of the Principal Officer
• List of proposed key management personnel with their qualifications
• Declaration by promoters and directors under Fit & Proper Criteria (in the prescribed format)
• Office address proof (ownership document or rental agreement)
• Details of proposed business plan, business model, and target segments
• Details of IT infrastructure and cybersecurity measures
• Undertaking to comply with IRDAI regulations and applicable laws
• Details of any previous license applications or rejections by IRDAI (if any)

Stage 4: IRDAI Scrutiny and Due Diligence

11. IRDAI scrutinises the application for completeness, accuracy, and compliance with eligibility criteria.
12. IRDAI may raise queries, seek additional documents, or call for a personal meeting with the promoters and Principal Officer.
13. Background verification of promoters, directors, and the PO is conducted.
14. IRDAI may inspect the proposed office premises in certain cases.

Stage 5: Grant of Certificate of Registration (CoR)

15. Upon being satisfied, IRDAI grants the Certificate of Registration (CoR) — i.e., the Insurance Broking License — to the applicant.
16. The CoR specifies the category (Direct / Reinsurance / Composite) and the sub-category (Life / General / Life & General) of the license.
17. The CoR is valid for 3 years from the date of issue and must be renewed thereafter.
18. The license registration number must be prominently displayed on all business communications, website, and marketing materials.

Important 2026 Update:  IRDAI has streamlined the online application process and introduced a dedicated digital workflow for broker registration and renewal. As of 2026, all correspondence, submissions, and approvals are processed through the IRDAI online portal, significantly reducing timelines. The typical processing time for a complete and compliant application is now 45–90 days.

Renewal of Insurance Broking License

The Insurance Broking License (CoR) is valid for a period of 3 years from the date of its grant. Brokers must apply for renewal well in advance to avoid a lapse in authorisation. Operating without a valid license after expiry is a serious violation and can result in penalties and prosecution.

Renewal Process and Timeline

• Application for renewal must be submitted at least 30 days before the expiry of the existing license
• Renewal is applied through the IRDAI online portal with updated documents and financial statements
• The renewal fee is the same as the application fee (₹25,000 for Direct Broker; ₹50,000 for Reinsurance / Composite Broker)
• IRDAI reviews ongoing compliance, net worth maintenance, deposit maintenance, and performance record before granting renewal
• Any pending disciplinary actions, complaints, or regulatory violations are considered at the time of renewal

Conditions for Renewal

• The broker must have maintained the required minimum net worth throughout the previous license period
• The broker must have maintained the required deposit with the scheduled commercial bank
• The Principal Officer must hold a valid, updated qualification (renewal of PO examination/certificate as required by IRDAI)
• All mandatory training requirements for key personnel must have been fulfilled
• No major regulatory violations or pending penalties in the previous license period
• Compliance with Errors and Omissions (E&O) Insurance requirement — see below

Ongoing Compliance Obligations for Registered Insurance Brokers

Registration with IRDAI is the beginning, not the end, of compliance for insurance brokers. The following is a comprehensive overview of the ongoing obligations that licensed brokers must fulfil in 2026:

1. Errors and Omissions (E&O) Insurance — Mandatory

Every registered insurance broker must obtain and maintain a valid Professional Indemnity (Errors and Omissions) Insurance Policy from a general insurer. This protects clients against any financial loss arising from the broker’s errors, omissions, or negligence.

• Mandatory for all categories of brokers
• The sum assured of the E&O policy must be equivalent to at least the minimum net worth of the broker (i.e., at least ₹75 Lakh for Direct Brokers; ₹4 Crore for Reinsurance / Composite Brokers)
• The E&O policy must be renewed annually without break
• Proof of E&O insurance must be submitted to IRDAI annually

2. Net Worth and Deposit Maintenance

• The minimum net worth must be maintained at all times — if net worth falls below the prescribed minimum, the broker must immediately notify IRDAI and take corrective steps
• The deposit with the scheduled commercial bank must not be withdrawn without IRDAI’s permission
• Annual certificate of net worth and deposit balance must be submitted to IRDAI as part of the annual compliance filing

3. Segregation of Client Funds

• Insurance brokers must maintain a separate, designated bank account (client premium account) for client premium monies
• Premium collected from clients must be remitted to the insurer within the timeframes specified in the IRDAI (Insurance Brokers) Regulations
• Brokerage income must be credited to the broker’s own account and must not be mixed with client premium funds
• Detailed records of all premium remittances and receipts must be maintained for inspection

4. KYC and AML Compliance

• Insurance brokers are ‘reporting entities’ under PMLA 2002 and must maintain full KYC records for all clients
• Brokers must implement a board-approved AML/CFT (Anti-Money Laundering / Countering Financing of Terrorism) policy
• Suspicious Transaction Reports (STRs) and Cash Transaction Reports (CTRs) must be filed with FIU-IND
• A designated Principal Officer for PMLA reporting must be appointed and notified to FIU-IND

5. Training and Qualification of Personnel

• All persons engaged in solicitation or procurement of insurance business must hold a valid IRDAI-approved qualification
• IRDAI mandates a minimum number of training hours per year for brokers’ employees involved in insurance activities
• As of 2025–2026, IRDAI has introduced digital training modules and online examinations through the National Insurance Academy (NIA) and the Insurance Institute of India (III)
• Continuing Professional Development (CPD) credits are increasingly expected by IRDAI for senior broker professionals

6. Reporting and Filing Requirements

7. Code of Conduct

IRDAI’s Code of Conduct for Insurance Brokers is specified in Schedule I of the IRDAI (Insurance Brokers) Regulations, 2018. Key obligations include:

• Act in the best interest of the client at all times
• Disclose full details of brokerage/commission to clients
• Not misrepresent insurance products or mislead clients
• Not accept any gifts, rebates, or inducements that create conflicts of interest
• Maintain client confidentiality — especially critical under DPDPA 2023
• Assist clients actively in claims settlement
• Not engage in price-fixing or other anti-competitive practices

Brokerage Income, Remuneration, and Revenue Model for Insurance Brokers

Understanding the revenue model is critical for anyone planning to enter the insurance broking business. Insurance brokers in India earn income primarily in the form of brokerage (or commission) paid by the insurer whose products are placed by the broker.

Brokerage Structure

IRDAI prescribes maximum brokerage rates that insurance companies can pay to brokers. These rates are capped category-wise. As of 2026, the indicative brokerage rates are as follows:

Important Note:  IRDAI periodically revises brokerage caps. Brokers must always refer to the latest IRDAI circulars for the current applicable rates. As of 2026, IRDAI has been moving towards a more liberalised brokerage framework to incentivise deeper insurance penetration.

Other Revenue Streams for Insurance Brokers

• Risk Management Consulting Fees: Charged to corporate clients for risk analysis, exposure assessment, and insurance programme design
• Claims Management Fees: Charged to clients for assistance in claims preparation, negotiation, and settlement
• Placement Fees: Charged to clients (especially corporate) for complex risk placements
• Training and Advisory Fees: Revenue from training client employees on insurance and risk management

Penalties and Enforcement Actions by IRDAI

IRDAI has robust enforcement powers under the Insurance Act, 1938, IRDAI Act, 1999, and the IRDAI (Insurance Brokers) Regulations, 2018. Non-compliance can result in severe consequences for licensed brokers.

Types of Regulatory Actions

• Monetary Penalty: IRDAI can impose a penalty of up to ₹25,00,000 (₹25 Lakh) per violation under Section 102 of the Insurance Act. For continuing violations, additional daily penalties may be levied.
• Warning and Caution Letters: For minor non-compliances, IRDAI may issue formal warnings that are placed on record and can affect renewal.
• Suspension of License: IRDAI can suspend the CoR for a defined period, during which the broker cannot solicit new business.
• Cancellation of License: For serious, repeated, or wilful violations, IRDAI can permanently cancel the CoR.
• Disqualification of Directors/PO: IRDAI can disqualify individuals from holding positions in any IRDAI-regulated entity.
• Prosecution: For criminal violations including fraud and misappropriation of client premiums, criminal prosecution under the Insurance Act and IPC/BNS can be initiated.

Common Violations Leading to Penalties

• Misappropriation or delayed remittance of client premiums to insurers
• Issuing fake or forged policies to clients
• Soliciting business without valid license or by persons without qualification
• Failure to maintain required net worth or deposit
• Non-disclosure of conflicts of interest or brokerage to clients
• Failure to file mandatory returns and reports on time
• Violation of KYC / AML obligations under PMLA
• Breach of the Code of Conduct

Major IRDAI Updates and Regulatory Developments (2025–2026)

The insurance broking regulatory landscape has witnessed significant changes in 2025 and 2026. Staying current with these developments is essential for existing brokers and new applicants alike.

1. IRDAI Vision 2047 — Insurance for All

IRDAI has articulated a bold vision of ‘Insurance for All’ by 2047 — India’s centenary of independence. This vision envisions every Indian citizen and enterprise having access to appropriate life, health, and property insurance. Insurance brokers are identified as a critical channel for achieving this vision, particularly for reaching under-served markets in rural and semi-urban India.

2. Bima Trinity — Bima Sugam, Bima Vistar, and Bima Vahak

IRDAI’s three flagship initiatives form the Bima Trinity:

• Bima Sugam: A revolutionary one-stop digital insurance marketplace (similar to a stock exchange for insurance) where all insurance products will be available for comparison, purchase, and servicing. Insurance brokers will be able to access Bima Sugam to offer products to clients digitally. Expected to be fully operational in 2026.
• Bima Vistar: A comprehensive bundled insurance product providing Life + Health + Property + Accident coverage, targeted at the mass market. Brokers will play a key role in distributing Bima Vistar.
• Bima Vahak: A network of local insurance distribution agents (including women representatives) at the panchayat level. While primarily focused on agents, brokers can collaborate with Bima Vahak networks.

3. 100% FDI in Insurance Intermediaries

The Indian government has allowed 100% Foreign Direct Investment (FDI) in insurance intermediaries, including insurance brokers, under the automatic route. This has opened significant opportunities for foreign broking groups to establish or fully acquire Indian insurance broking companies without requiring prior government approval. As of 2026, several global broking groups have leveraged this provision to enter or expand in the Indian market.

4. Enhanced Capital Norms and IRDAI Review

IRDAI has been reviewing the capital and net worth norms for insurance brokers as part of its broader regulatory reforms. While the formal revisions to the IRDAI (Insurance Brokers) Regulations are expected in 2026, brokers should prepare for potentially enhanced capital requirements, especially for brokers operating at scale.

5. Mandatory Digital Infrastructure and DPDPA Compliance

From 2025 onwards, IRDAI has made digital infrastructure compliance non-negotiable for brokers. Insurance brokers must:

• Maintain updated, functional broker portals or apps for client policy management
• Integrate with the IRDAI Integrated Grievance Management System (IGMS) for real-time complaint tracking
• Comply with DPDPA 2023 — including appointment of Data Protection Officer, consent management, and data breach protocols
• Implement Cyber Security frameworks aligned with IRDAI’s updated IT Security Guidelines (2024 circular)

Market Opportunities and Business Landscape for Insurance Brokers in India (2026)

India’s insurance market remains significantly under-penetrated relative to its economic size. India’s insurance penetration (premiums as % of GDP) stands at approximately 4.2% in 2024-25, compared to the global average of 7%, presenting enormous growth opportunities for insurance brokers.

High-Growth Segments for Brokers

• Health Insurance: Post-COVID awareness has driven explosive growth in health insurance demand. The individual health insurance segment is growing at over 20% year-on-year, offering significant brokerage opportunities.
• SME and MSME Insurance: Over 63 million MSMEs in India remain largely uninsured or under-insured — a massive untapped market for commercial insurance brokers.
• Cyber Insurance: With digital adoption accelerating and cybercrime rising, demand for standalone cyber insurance policies has surged. Brokers with expertise in cyber risk are in high demand.
• Agriculture Insurance: Government schemes like PMFBY and AIC products, combined with India’s vast agricultural economy, create significant business for agri-specialist brokers.
• Employee Benefits and Group Insurance: The growing organised sector workforce demands sophisticated group health, life, and accident insurance programmes — a sweet spot for corporate brokers.
• Infrastructure and Project Insurance: India’s massive infrastructure spending (₹10+ Lakh Crore annually) creates huge demand for specialised construction and engineering insurance brokerage.

Competitive Landscape

• IRDAI has licensed over 500+ insurance brokers across all categories as of 2025. The market is dominated by large national and international brokers.
• Top players include Marsh India, Aon India, Willis Towers Watson, Gallagher India (international), and Mahindra Insurance Brokers, Prudent Insurance Brokers, and BajajCapital Insurance Broking (domestic) — though specific market positions may vary in 2026.
• Niche and boutique brokers focusing on specific sectors (healthcare, marine, aviation, cyber) are finding profitable opportunities.
• Insurtech-driven brokers combining technology platforms with brokerage services are disrupting traditional distribution models.

Insurance Broking License vs. Other IRDAI Licenses — Which Is Right for You?

Frequently Asked Questions (FAQs) on IRDAI Insurance Broking License

Q1: Can an individual person obtain an Insurance Broking License from IRDAI?

No. IRDAI grants Insurance Broking Licenses only to companies incorporated under the Companies Act, 2013. An individual cannot hold an insurance broking license. Individuals can, however, become insurance agents or Certified Insurance Facilitators (CIFs) under an insurance company.

Q2: What is the difference between a Direct Broker License and a Composite Broker License?

A Direct Broker can only solicit direct insurance (life, general, or both) for policyholders. A Composite Broker can do everything a Direct Broker can, plus additionally conduct reinsurance broking for insurance companies. The Composite License requires higher capital (₹4 Crore net worth vs ₹75 Lakh for Direct).

Q3: How long does it take to get an IRDAI Insurance Broking License?

With a complete, compliant application, the typical processing time is 45 to 90 days from the date of submission. Incomplete applications or those requiring additional information can take 6 to 12 months. It is advisable to ensure all documentation and eligibility criteria are fully met before submission.

Q4: Can a foreign insurance broking company operate in India?

Yes — but only through an Indian subsidiary company. As of 2026, 100% FDI in insurance broking intermediaries is permitted under the automatic route. A foreign company can therefore wholly own an Indian insurance broking company without prior government approval, subject to IRDAI licensing requirements being fulfilled by the Indian entity.

Q5: Is GST applicable on insurance brokerage income?

Yes. Insurance brokerage income is a financial service and is subject to GST at 18% (9% CGST + 9% SGST for intra-state, or 18% IGST for inter-state). Brokers registered under GST must file regular GST returns. The GST liability is on the broker, who collects it from the insurer (the payor of brokerage).

Q6: What happens if an Insurance Broker’s net worth falls below the required minimum?

If the net worth of a registered insurance broker falls below the prescribed minimum (₹75 Lakh for Direct Broker; ₹4 Crore for Reinsurance/Composite), the broker is required to immediately notify IRDAI in writing. IRDAI may give a specific time period to restore the net worth. Failure to restore within the given period can result in suspension or cancellation of the CoR.

Q7: Can an Insurance Broker also act as an Insurance Company Director?

No. The IRDAI (Insurance Brokers) Regulations, 2018 prohibit insurance brokers and their directors/employees from being directors, agents, surveyors, or employees of any insurer — to prevent conflicts of interest and ensure the broker’s independence in representing client interests.