IRDA web aggregator License requirements in terms of capital and net worth

by Gaurav Bansal Company Registration Consultants in Delhi

Starting an Insurance web aggregator business isn’t easy. Along with immense training, and the need for the IRDA license, you need to have the optimal net worth.

Therefore, in this article, we would reveal to you, in simplified terms, the requirements surrounding the capital and net worth requirements to get the insurance web aggregator license.

Capital Requirements for IRDA web aggregator license

Consider the following capital requirement as a component of the IRDA web aggregator license fees.

· The company or the LLP (as only a company or an LLP applicant is allowed) seeking the Insurance web aggregator license must have net worth of INR 25 Lakhs.

· The aforementioned capital has to be issued to the shareholders as equity shares. They are non-redeemable shares meant for long term investment into the company.

· When it comes to LLP, the capital contributions are only to be paid in cash.

How is the equity capital calculated for IRDA License if foreign investor is involved

The following points refer to the way the IRDA calculates the equity capital required by it if there is a foreign investor involved in the business:

1. The aggregator (sum) of the equity shares of the Insurance web aggregation company by foreign investors. The amount of investment should not be more that what’s allowed by the Central Government, which is in fact a lot.

2. If there are more than one foreign investors involved with the Insurance web aggregator, then the IRDA is going to use Schedule XII of the Web Aggregation Regulations (2017) post amendment to calculate the equity capital.

The net worth requirements of an Insurance web aggregator

The net worth requirement aren’t only valid during the licensing process, you have to adhere to them after becoming operational. that said following are the requirements for net worth for an insurance web aggregator:

1. During the time you have the IRDA license, at no point it is allowed to let your company’s net worth go below the initial net worth which became the basis of issuance of IRDA license.

2. The net worth requirements are often in flux, they change. As such, the Insurance Web Aggregator is required to review the status of his net worth on a bi-annual and annual basis. If the applicant realizes that there is some non compliance, the applicant has to inform the authorities within 15 days of that realization.

3. IRDA gives you 30 days to get your net worth back on track. If you are not able to do so within that time, your only option is to stop your operation with immediate effect.

Transfer of shares in an insurance web aggregator company

Following are the requirements of the IRDA when it comes to transferring the shares within an Insurance web aggregator company:

1. The matter of beneficial ownership of the shares and the control of the shares would rest only upon the individual who has the approval of IRDA.

2. To transfer the shares, the methodology followed should as per the Schedule XII Form AB given in the Web Aggregators Reulations-2017

Conclusion

Through this blog, we have discussed the capital, net worth and other economical requirements associated with Insurance web aggregator license. If any queries still remain for you to know the answer to, feel free to connect with Registrationwala.

IRDA web aggregator license requirements in terms of capital and net worth are many. And in this blog, we have a shed a light on them. Know what it takes to get and then preserve the IRDA license.