There are certain requirements that should be complied with to incorporate an insurance company. The minimum capital requirement, mode of investment, limit of foreign investment and shareholding of foreign investors are defined under the insurance act. And you should ensure all the requirement are in compliance.
1 Company can apply for insurance registration
It basically deals who can apply for an insurance company. Applicant must be registered under companies act.
2 Composition of the board of directors
Insurance company incorporated under IRDA falls under the category of public company and it requires to constitute the board of directors.
The size and composition of BOD depend upon your requirement but should have minimum directors as specified under the act.
The Board of Directors is required to have a minimum of three “Independent Directors” including at least one women director.
However, it is allowed to have ‘two’ independent directors for the initial five years from the grant of Certificate of Registration to insurers.
An independent Director should fulfill all the conditions specified under Section 149 of the Companies Act, 2013.
2 Share capital requirement
It depends upon the type of business area an insurance company deals. It means that capital requirement is based on the type of insurance company. You can register insurance company as Health insurance, General insurance company, Life insurance Company and Non-life insurance company.
Type of insurance business Amount
General insurance, life insurance, health insurance Rs. 100 crore
Reinsurance Rs. 200 crore
3 Shareholding of foreign promoter:-
If an insurance company have foreign shareholders, they can not hold share capital exceeding 49% of the total paid up capital.
4 Foreign Investment
India is becoming a business hub for foreign investors. Foreign investment can be brought in without any legal hasales and prior approval.
Prior approval is however required if foreign direct investment(FDI) exceeds 26% of the total investment.