Guidelines

 

 

InsuranceRegulatory and Development Authority of India (International Financial ServiceCentre Insurance Intermediary Offices) Guidelines, 2019

 

 

Guidelines ReferenceNo. IRDA/RI/GDL/MISC/012/01/2019, dated 16-01-2019

CHAPTER – I

 

1.       Objective:

Theaim of these Guidelines is to grant permission to “Intermediaries or Insurance Intermediaries”registered by the Authority to undertake operations in International FinancialService Centre (IFSC) as per the objectives of the IFSC.

 

2.       Legal and Other Provisions:

Inexercise of the powers conferred by Section 18 (2) of Special Economic ZonesAct, 2005 read with Section 14 of IRDA Act, 1999, the Authority hereby makesthe following Guidelines;

 

3.       Short Title and Commencement:

i.         These Guidelines may be called the InsuranceRegulatory and Development Authority of India (International Financial ServiceCentre Insurance Intermediaries Offices) Guidelines, 2019.

ii.       These Guidelines shall come into force from thedate of issuance.

 

4.       Definitions:

In these Guidelines, unless the contextotherwise requires -

 

a.   ‘Act’ means the Insurance Act, 1938;

b.   ‘Applicant’ means an intermediary or insuranceintermediary registered with the Authority under Section 42D of the Act;

c.   ‘Authority’ means the Insurance Regulatoryand Development Authority of India established under Section 3(1) of theInsurance Regulatory and Development Authority Act 1999 (41 of 1999);

d.   “Authorization” means permission grantedby the Authority to the applicant to act as an IIIO;

e.   ‘Domestic Tariff Area (DTA)’ means thearea as defined under Section 2(i) of the Special Economic Zones Act, 2005;

f.    ‘International Financial Service Centre’ or ‘IFSC’means an International Financial Services Centre which has been approved by theCentral Government under Section 18(1) of the Special Economic Zones Act, 2005;

g.   ‘International Financial Service CentreInsurance Intermediary Office’ or ‘IIIO’ means a branch office of applicant inIFSC as authorized by the Authority;

h.   ‘Intermediary or Insurance Intermediary’means a person as defined in section 2 (f) of the IRDA Act, 1999 and grantedcertificate of registration by the Authority;

i.     ‘Special Economic Zone’ or ‘SEZ’ means aspecial economic zone as defined under Section 2 (za) of the Special EconomicZone Act, 2005;

j.     All Words and expressions used herein but notdefined in these Guidelines but defined in the Insurance Act, 1938 (4 of 1938)or Insurance Regulatory and Development Authority Act, 1999 (41 of 1999) or TheSpecial Economic Zones Act, 2005 (28 of 2005) shall have the meaningsrespectively assigned to them in those Acts, Rules, Regulations issued underthose Acts, as the case may be.

CHAPTER II

 

AUTHORIZATION OF IFSCINSURANCE INTERMEDIARY OFFICE (IIIO)

 

5.       Applicability:

a)   Theseguidelines are applicable for the applicants who wish to undertake operations asIFSC Insurance Intermediary Office (IIIO) and to IIIOs;

b)   Noperson or entity shall commence or undertake or render services as an insuranceintermediary from an IFSC without obtaining prior permission from the Authority,to act as an IIIO.

 

c)    The applicantmay apply for any one of the following categories of intermediary;

i)    InsuranceBroker;

ii)    CorporateAgent;

iii)   Surveyorand Loss Assessor;

iv)   ThirdParty Administrator – Health Services;

v)   Anyother category of intermediary recognized by the Authority from time to time.

 

Provided that, the applicant mayseek authorization to act as an IIIO for such category of above mentionedintermediaries for which it has been registered with the Authority.

 

6.       Eligibility norms - TheAuthority may consider requests from those applicants to set-up IIIO that meetthe following criteria:

 

i)    Theapplicants are eligible to set-up an IIIO provided, they hold a validcertificate of registration issued by the Authority and the same has not beensuspended or canceled.

ii)   Theapplicant shall be eligible to apply for authorization in the category forwhich it has been granted certificate of registration by the Authority.

iii)  Anyother requirement that may be stipulated by the Authority from time to time.

 

7.       The Authority may take a decision on thenumber of intermediaries that may be permitted to set-up offices in IFSC in ayear depending on the orderly growth of the insurance and reinsurance market,national interest, or other related aspects.

 

CHAPTER – III

 

8.       Application for grant of authorization toundertake operations as IIIO:

a)    Everyapplication for grant of authorization of the insurance intermediary shall be accompaniedwith;

i)     Copy ofcertificate of registration issued by the Authority;

ii)    Aprovisional letter of allotment (PLoA) of space to operate from IFSC, issued byIFSC - SEZ Authorities;

iii)   Certifiedcopy of approval from the board of directors or its equivalent of the applicantthrough a resolution to set up such IIIO in IFSC;

iv)   Any otherrequirement that may be stipulated by the Authority from time to time.

 

b)    Furnishingof further information and clarification, etc. - The Authority mayrequire the applicant, to furnish further information or clarificationregarding the matters relevant to consider the grant of authorization.

 

9.       Consideration of application for authorizationas IIIO:-

a)   TheAuthority shall take into account all matters relating to carrying on the insuranceintermediary business by the applicant while considering its request to act asIIIO.

 

b)   Inparticular, and without prejudice to the generality of the foregoing, theAuthority shall consider the following matters, namely: -

i)    thegeneral track record of conduct and performance of applicant in the respectivefield they are engaged in;

ii)   therecord of conduct and performance of the directors and persons in management ofthe applicant;

iii)  theplanned infrastructure of the IIIO, to effectively act as an insurance intermediary;

iv)  theproposed business plan for next three (3) years; and

v)   otherrelevant matters for carrying out the provisions of the Act.

 

c)   TheAuthority on being satisfied with the information submitted and on verificationthat-

i)     the FormIRDAI/ IIIO/ R1 is complete in all respects and is accompanied by all documentsrequired therein;

ii)    the IIIO ofthe applicant is capable of carrying on all functions in respect of theinsurance intermediary business;

mayaccept the application for operating as an IIIO.

 

10.    Procedure for issuance of authorizationas an IIIO – The Authority, on being satisfied that;

a)   theapplicant is eligible, and in its opinion, is likely to meet effectively itsobligations as an insurance intermediary specified under the Act and respectiveregulations thereunder;

b)   thefinancial condition and the general character of management of the applicantare sound;

c)   theinterests of the insurance sector will be served if the authorization isgranted to the applicant in respect of the category of intermediary businessspecified in the application;

 

mayauthorise the applicant to act as an IIIO for the category for which the applicationis made.

 

11.    Validity of authorizationas an IIIO: The authorization granted bythe Authority for the first time shall be valid till the expiry of thecertificate of registration issued by the Authority and thereafter for a periodco-terminus with the expiry of the original certificate of registration.

 

12.    Conditions of authorizationto IIIO - The authorizationgranted shall be subject to all the conditions which the applicant is subjectto and those referred to under the SEZ Act, 2005 and the Rules, Regulations,Circulars, Guidelines and any other instructions issued there under from timeto time.

 

13.    Rejection of authorizationapplication;

a)    Where therequirements under these guideline nos. 8 and 9 are not complied with, theAuthority may, after giving the applicant a reasonable opportunity of beingheard, reject the application.

b)    The order forrejecting the application under guideline 13 (a) shall be communicated by theAuthority within thirty days of such rejection to the applicant in writing,stating therein the ground on which the application has been rejected.

 

14.    Time Limit:

a)   Anapplicant authorized under these guidelines shall commence insuranceintermediation business within three months of the date of authorization.

Provided,however, that if the IIIO is not able to commence the insurance intermediationbusiness within the specified period of three months, it can before the timelimit expires, seek an extension, by a proper written application, to theChairperson of the Authority.

 

b)   TheChairperson of the Authority on receipt of the request will examine it andcommunicate its decision in writing either rejecting the request or grantingit.

 

Provided,no extension of time shall be granted by the Chairperson of the Authoritybeyond six months from the date of grant of authorization.

 

CHAPTER – IV

 

Renewal & Voluntary Surrender of authorization

 

15.    Renewal of authorization;

a)    Therenewal of authorization shall be partof the renewal application of the insurance intermediary for certificate ofregistration. No separate application shall be submitted.

b)    Therenewal of authorization shall beco-terminus with the period of certificate of registration of the insuranceintermediary.

 

16.    Voluntary Surrender of authorization;

a)    An applicantmay make an application to the Authority for surrender of its authorizationto act as an IIIO. The Authority may consider such application on merit.No IIIO shall be closed without the prior approval of the Authority;

b)    Uponacceptance of the application for surrender made by the applicant, theAuthority may pass an order.

 

Provided that, theintermediary whose application for surrender of authorization isaccepted by the Authority, shall forthwith inform the concerned insurers and orreinsurers as the case may be for taking alternative steps such as appointmentof another intermediary or undertaking for the servicing of the affectedpolicies as may be necessary, immediately, to continue to cater to the insuredor policyholders serviced by such intermediary.

 

CHAPTER - V

 

OPERATIONSOF IIIO’s

 

17.    Operational guidelines pertaining to IIIO:

TheIIIO authorized by the Authority to undertake insurance intermediary businessshall ensure compliance to the following minimum requirements:

 

a)    Scope ofOperations

i)     An IIIOshall be a branch office of the applicant;

ii)    IIIOs are authorizedto undertake insurance intermediary business to the extent permitted under theSEZ Act and Rules framed thereunder;

iii)   IIIOs canundertake insurance intermediary business emanating outside the country;

iv)   No IIIOshall undertake insurance intermediary business, which is otherwise notpermitted to the applicant by the Authority.

 

b)    Capital: The IIIOis not required to bring in additional capital.

 

c)    Appointmentof In-charge of IIIO: The applicant shall inform the Authority within10 days on the appointment, reappointment and removal of the person in-chargeof IIIO.

 

d)    Accounting – The IIIOshall maintain separate financial returns including statement of accounts.

 

e)    Duties,Functions and Obligations – The applicant shall be responsible for thedischarge of the duties, functions and obligations by the IIIO as perapplicable extant regulations, circular guidelines notified by the Authority.

 

f)     Reportingrequirements of the IIIO by the applicant to the Authority- The applicantshall submit half-yearly regular returns on the following aspects as may bestipulated by the Authority from time to time -

                         i.       Financialreporting

                       ii.       BusinessReporting

                      iii.       Others

 

g)    ForeignExchange Requirements - All applicants shall comply with extantForeign Exchange Management (IFSC) Regulations, 2015 or any other correspondingcircular guidelines issued by RBI, from time to time, in the matter ofcurrency transactions in IFSC and any other laws as applicable to SEZs.

 

h)   Furtherpowers of the Authority

i)     TheAuthority shall have the right to call, inspect or investigate any document,record or communication from the IIIO.

ii)    Notwithstandingthe above, where the Authority is of the opinion that, the operations of IIIO arenot in the interests of the insurance sector, the Authority reserves the rightto take appropriate steps including withdrawal of authorization after givingadequate opportunity to the applicant of being heard.

 

18.    Applicability of extant regulatory framework- Save as provided for in theseguidelines the extant provisions applicable to the respective insuranceintermediaries which include but not limited to code of conduct, suspension orcancellation, compliance requirements shall apply mutatis mutandis to IIIOs.

 

19.    Power of the Authority to issueclarifications: In order to remove any difficulties inrespect of the application or interpretation of any of the provisions of these Guidelines,the Chairperson of the Authority may issue appropriate clarifications from timeto time.

 

20.    Repeal and Savings:

a.    From thedate of issuance of these guidelines, the following guidelines shall besuperseded:

 

i.      IRDAI(International Financial Service Centre) Guidelines, 2015 issued vide Ref. No.IRDA/NL/GDL/MISC/065/04/2015 dated 06-04-2015 along with all forms andcirculars issued there under.

ii.    CircularNo. IRDA/NL/CIR/MISC/019/01/2016 dated 28-01-2016

iii.   The IIIOswhich have been issued permission by the Authority as per provisions ofguidelines with Ref. No. IRDA/NL/GDL/MISC/065/04/2015 dated 06-04-2015 andCircular No. IRDA/NL/CIR/MISC/019/01/2016 dated 28-01-2016 continue to be validas on the date of issuance of these guidelines shall be deemed to be holdingvalid authorization as if they have been issued under these guidelines.

 

b.    Applicationsfor grant of permission as an IIIO, which are filed as per provisions of guidelineswith Ref. No. IRDA/NL/GDL/MISC/065/04/2015 dated 06-04-2015 and Circular No.IRDA/NL/CIR/MISC/019/01/2016 dated 28-01-2016 and under process with theAuthority as on the date of issuance of these guidelines, shall be processedfor grant of authorization under these guidelines.

 

c.    Where anyinspection has been conducted or proceedings have been initiated by theAuthority as per guidelines with Ref. No. IRDA/NL/GDL/MISC/065/04/2015 dated06-04-2015 and Circular No. IRDA/NL/CIR/MISC/019/01/2016 dated 28-01-2016; theyshall continue to be governed by above mentioned guidelines only till theirfinal disposal.

 

 

SUJAY BANARJI

MEMBER (DISTRIBUTION)

Date: 16-01-2019

FORM IRDAI/ IIIO/ R1

(under Guideline 9(c)

AUTHORIZATION APPLICATION FOR IIIO

 

1.   Name ofthe applicant:

2.   Address:

3.   Date ofincorporation as an intermediary: DD/MM/YYYY

4.   RegistrationNo. (issued by the Authority):

5.   Categoryof Insurance Intermediary:

6.   Name,Address and contact details of the person responsible for the affairs of the proposedIIIO.

7.   AdditionalInformation:

 

S. No.	Points	Response
1	Planned Infrastructure for proposed IIIO
2	a)       Office Infrastructure
	b)       Staff Strength
	c)       Details of IT Infrastructure
3	Proposed revenue from operations of proposed IIIO for 3 years
4	Proposed expenditure of operations of proposed IIIO for 3 years
5	Profit Before Tax of the applicant for the previous 3 years
6	Details of Regulatory / Governmental Action by way of specific directions, penalties, warnings, etc to the applicant in the last 3 years

 

5.   DECLARATION- THISDECLARATION IS TO BE SIGNED BY TWO OF THE DIRECTORS, TWO OF THE PARTNERS AS THECASE MAY BE.

1)   We havegone through the IRDAI (IIIO) Guidelines, 2019 and are satisfied that:

a.   We areeligible to apply for the authorization to act as IIIO.

b.   Westate that we have truthfully and fully answered the questions above andprovided all the information which might reasonably be considered relevant forthe purposes of authorization.

c.   Wedeclare that the information supplied in the application form is complete andcorrect.

 

Forand on behalf of

 

 

 

__________________________ __________________________

(Signature& Name) (Signature &Name)

Director/ Partner Director /Partner

Place: Place:

Date: Date:

 

 

Documentsattached:

a)   Copy ofcertificate of registration issued by the Authority;

b)   Aprovisional letter of allotment (PLoA) of space to operate from IFSC, issued byIFSC - SEZ Authorities.

c)   Certifiedcopy of approval from the board of directors or its equivalent of the applicantthrough a resolution to set up such IIIO.