What is an Insurance Marketing Firm (IMF)?

An Insurance Marketing Firm (IMF) is a registered entity licensed by the IRDAI to solicit and procure insurance products and provide other related services through qualified individuals called Insurance Sales Persons (ISPs).

What are the IRDAI guidelines for setting up an IMF?

As per IRDAI (Registration of Insurance Marketing Firm) Regulations, 2015, a company or LLP must meet capital, infrastructure, and personnel requirements to be eligible. The firm must also appoint a Principal Officer and pass a fit and proper test.

What is the minimum capital required to start an IMF in India?

A minimum capital of ₹5 lakh is required for rural areas, and ₹10 lakh for urban areas, as prescribed under IRDAI regulations for registering an IMF.

Who can apply to set up an Insurance Marketing Firm?

Any individual, partnership firm, LLP, or private/public limited company meeting the IRDAI's eligibility criteria regarding capital, training, and infrastructure can apply to set up an IMF.

What is the role of the Principal Officer in an IMF?

The Principal Officer (PO) is the key managerial person responsible for regulatory compliance, business operations, and coordination with IRDAI. The PO must pass IRDAI-specified training and examination.

What qualifications are needed for the Principal Officer of an IMF?

The Principal Officer must be a graduate and undergo 50 hours of training from an IRDAI-approved institute, followed by passing an examination conducted by the Insurance Institute of India.

What is the registration process for an IMF with IRDAI?

Applicants must submit Form A with required documents and fees to IRDAI. Upon verification and compliance with all conditions, the IRDAI grants a Certificate of Registration valid for three years.

What is the validity period of an IMF license?

The IMF license granted by IRDAI is valid for a period of three years and is renewable subject to compliance with ongoing regulatory conditions.

Can an IMF operate in multiple states in India?

Yes, an IMF can operate pan-India provided it complies with IRDAI norms and maintains a network of registered Insurance Sales Persons (ISPs) and branch offices as required.

What kind of insurance products can an IMF distribute?

An IMF can distribute life insurance, general insurance, and health insurance products of up to two life, two general, and two health insurers at any given time.

What are the prospects of starting an IMF business in India?

With increasing insurance penetration, digital tools, and government push for financial inclusion, IMFs have excellent prospects, especially in Tier-II and rural markets.

What is the job profile of an Insurance Sales Person (ISP) under IMF?

ISPs are authorized representatives of the IMF who solicit insurance business, offer policy servicing, and assist clients in choosing suitable insurance plans. They must complete IRDAI-mandated training.

Is training mandatory for ISPs and Principal Officers?

Yes, both ISPs and Principal Officers must undergo IRDAI-approved training modules and pass the relevant examination conducted by designated institutions like the Insurance Institute of India.

Can someone with no insurance experience start an IMF?

Yes, but they must meet IRDAI’s training and certification requirements, especially for the role of Principal Officer. A basic understanding of the insurance domain is highly recommended.

How long does it take to get an IMF license from IRDAI?

The process typically takes 45–90 days from application submission, depending on completeness, compliance, and IRDAI’s review cycle.

Can an IMF also provide other financial services?

Yes, IMFs can offer services like mutual fund distribution, pension products, and loans under regulated frameworks, provided they comply with the rules of other regulatory bodies like SEBI or PFRDA.

Is it mandatory to have a physical office to start an IMF?

Yes, a physical office with minimum infrastructure is mandatory as per IRDAI norms, along with staff and basic facilities for client servicing and regulatory communication.

What documents are needed to register an IMF?

Required documents include company incorporation certificate, PAN, MOA/AOA, principal officer's qualification proof, training certificates, fit and proper declaration, infrastructure details, and application Form A.

What are the recurring compliance requirements for an IMF?

IMFs must submit periodic business reports, maintain records of transactions, renew ISP licenses, undergo audits, and comply with code of conduct and grievance redressal mechanisms.

Who regulates the functioning of IMFs in India?

The Insurance Regulatory and Development Authority of India (IRDAI) regulates and monitors the functioning of Insurance Marketing Firms under the 2015 Regulations.

How to set-up an Insurance Marketing Firm?

What is an Insurance Marketing Firm?

As the name suggests, an insurance marketing firm is an organisation engaged in marketing insurance products or services and has been registered with the authority i.e. IRDAI. This is a new business model and channel of distribution for insurance products introduced by the IRDAI. This model does not fit for individual but are reserved for entities who are into the business of distributing other financial products.

IRDA defines Insurance Marketing Firm as an entity registered by the Authority to solicit or procure insurance products as specified in regulation and undertakes insurance service activities as specified in regulation and to distribute other financial products by employing individuals licensed to market, distribute and service such other financial products.

Insurance marketing companies requires to employ Insurance Sales Persons (ISP) who conduct marketing and solicitation tasks and a financial service executive called a financial service executive(FSE). These executives are in charge of promoting and soliciting insurance and non-insurance items respectively that are subject to different regulatory bodies.

Role of Insurance Marketing Firm

In addition to the marketing of insurance products and insurance services, an IMF can also engage in marketing Financial Products: Being a marketing firm, IMF has the power to market the following financial products as per the directions of the IMF registration:

Insurance Services:

Back office services of the insurance companies with which the tie up exists.
Survey job subject to meeting the prescribed requirements.
Act as Approved Person of Insurance Repositories.

Financial products through FSE:

Mutual Funds regulated by SEBI.
Pension Products regulated by PFRDA.
Other financial products distributed by SEBI licensed Investment Advisors.
Banking and Financial Products by NBFC, Banks regulated by RBI.
Non insurance products of Dept. of Posts.
Any other financial products under the regulations of the IRDA.

Area of Operation of IMF is now extended to one entire selected State of IMF registration.

Registration & Licence

No person or a firm or a company shall act as an Insurance Marketing Firm without being registered under Regulation 3. Only following type of entities can be registered as Insurance Marketing Firm:

A company formed under the Companies Act; or
A limited liability partnership (LLP) formed and registered under the Limited Liability Partnership Act, 2008; or
A Co-operative Societies registered under Co-operative Societies Act, 1912 or under any law for registration of Co-operative Societies; or
Any other person as may be recognized by the Authority to act as an Insurance Marketing Firm.

Every eligible person/organisation intending to act as an Insurance Marketing Firm in respect of insurance business shall apply to the Authority for grant of registration in the Form as may be specified by the Authority.
The registration granted shall be valid for a period of three years.

Other requirements for registration

Capital Requirements:

The Applicant shall have a net worth of not less than ten lakh rupees.

Principal Officer:

Shall designate a Principal Officer who conforms to the eligibility criteria with regards to education and training etc. He shall be the overall in-charge and shall be responsible for regulatory compliance to the Authority.

Professional indemnity insurance:

Shall take out and maintain at all times a professional indemnity insurance cover with minimum sum insured of Rs 10 lakhs.

ISPs and FSE:

The requirements relating to engaging ISPs and FSEs are met and their enrolment meets the qualification and Training criterion.

Fees:

The registration fees (Rs 5000/-) is to be paid online only.

Documents required for filing registration application:

Certificate of Incorporation
The applicant’s LLP agreement of an LLP: (for Applicant who is applying as a Limited Liability Partnership)
Memorandum and Articles of Association
Details of Qualifications and information of the Principal officer
Information on the insurance salesperson and their qualifications
Bank account statement
Qualification and details of FSE
Certificate of the business entity’s net worth
Three-year business plan
Photographs of the manpower and office equipment and other facilities
Consent letter of insurance companies that the applicant proposes to work with
Detailed information on the organisation’s management structure
Undertaking by the Principal officer ensuring information accuracy
Projected P&L and balance sheet for three years
Organisation Chart showing operations including IT, risk, claims, marketing, accounts, etc.
Any other service details provided for expansion
Any other requirements as deemed necessary by the authority

Scope

The Insurance Marketing Firms (IMF) can solicit and procure insurance products of maximum of six Life insurers, six General insurers and six Health insurers at any point of time. As such, the scope is vast. The Insurance Marketing Firm are allowed to solicit or procure:

All kinds of products sold on individual and/or retail basis, including crop insurance for non-loanee farmers and combi products of any combination of life, general and health insurance as approved by the Authority.
Property, group personal accident, group health, GSLI and term insurance policies for Micro, Small and Medium Enterprises (MSME). (However, IMF is not allowed to solicit and procure commercial lines of business other than for MSMEs.)
Insurance Servicing Activities of insurers as allowed in Regulations;
Becoming approved person of Insurance Repositories;
Any other insurance related activity permitted by the Authority from time to time.
Marketing of other financial products through the FSE engaged by the Insurance Marketing Firm namely:

Mutual funds of mutual fund companies regulated by SEBI;
Pension products regulated by PFRDA;
Other financial products distributed by SEBI licensed Investment Advisors;
Banking/ financial products of banks/ NBFC regulated by RBI;
Non-insurance products offered by Department of Posts, Government of India;
Any other financial product or activity permitted by the Authority from time to time.

Expected Salary/Commission/Earning:

The payment of remuneration and/ or reward to an Insurance Marketing Firm by an insurer shall be as per IRDA prescribed Regulations

In addition, the Insurance Marketing Firm may receive reimbursement of expenses from Life insurers towards recruitment, training and mentoring of their ISPs. This reimbursement shall not exceed 50% of first year commission and 10% of renewal commission received by the IMF in case of Life insurers.

Separate fee to be paid for undertaking insurance service activities as per mutual agreement with the insurer. Such fee shall be reasonable depending upon the time and effort and on the basis of fees being clearly agreed.

The Insurance Marketing Firm will also be entitled to collect the 'Applicable Service Charges' from the financial entities for the services rendered by the FSE employed by the Insurance Marketing Firm.

Qualification and Training required:

For Principal Officer of the Insurance Marketing Firm

(a) Associate/Fellow of the Insurance Institute of India, Mumbai; or
(b) Associate/Fellow of the Institute of Actuaries of India; or
(c) Associate/Fellow of Chartered Insurance Institute, London; or
(d) Post graduate qualification of the Institute of Insurance and Risk Management, Hyderabad; or
(e) Graduate with Insurance experience of two years preceding the year in which the application is made; or
(f) Graduate with five years of experience in financial services sector preceding the year in which the application is made.
(g) Master’s in Business Administration or its equivalent from any institution / university recognized by UGC / AICTE / any State Government or the Govt. of India; or
(h) Associate / Fellow of the Institute of Chartered Accountants of India, New Delhi; or
(i) Associate / Fellow of the Institute of Cost Accountants of India, Kolkata; or
(j) Executive/Professional of the Institute of Company Secretaries of India, New Delhi; or
(k) Any other qualification specified by the Authority from time to time.

For Insurance Sales Person

Pass in 12th Class or equivalent examination from a recognized Board/Institution.

For Financial Service Executives

FSEs engaged by the Insurance Marketing Firm to market financial products, should have valid license or certificate issued by the respective regulator as specified in these Regulations.

Training:

The Principal Officer shall undergo Fifty Hours of Insurance Marketing Firm training from an institution recognised by the Authority, and should pass an examination, at the end of the period of training, conducted by the Examination Body recognised by the Authority.
The Insurance Sale person should have undergone the Insurance Marketing Firm Training prescribed by the Authority and qualified in the Insurance Marketing Firm Examination from an institution recognized by the Authority
The ISP of an Insurance Marketing Firm shall meet the same requirements of training, examination and certification as those prescribed for the Principal Officer above.
The FSE deployed in the Insurance Marketing Firm shall meet the necessary training, qualifications, experience and other requirements as may be specified by the respective regulatory/ statutory authorities for the line of activity undertaken.

🎯 Start Your Free Mock Tests