Registration of an Insurer

Section 3(2A) provides that on receipt of an application the Authority may, if satisfied after such inquiry as it may deem necessary, register the applicant as an insurer and grant it a certificate of registration. It must be satisfied of four things:

(a) that the financial condition and the general character of management of the applicant are sound;

(b) that the projected volume of business, the capital structure and the earning prospects of the applicant shall be adequate;

(c) that the interest of the general public shall be served if the certificate is granted; and

(d) that the applicant has complied with the provisions of this Act, as applicable, and all other conditions specified by the Authority.

Those four tests are the substance of Indian insurance licensing and are worth learning as a list, because an examiner setting a problem about a refused application is testing them.

Section 3(5D), as amended in 2026, substitutes the National Company Law Tribunal for the Court wherever it appeared, so applications about registration that used to go to a court now go to the Tribunal.

The annual fee: section 3A

Section 3A(1) provides that an insurer granted a certificate of registration under section 3 shall pay such annual fee to the Authority in such manner as may be specified by the regulations.

Section 3A(2) provides that any failure to deposit the annual fee shall render the certificate of registration liable to be cancelled. Liable to be cancelled, not cancelled, so the Authority has a discretion and must exercise it.

Restriction on the name: section 5

Section 5(1) provides that an insurer shall not be registered by a name identical with that by which an insurer in existence is already registered, or so nearly resembling that name as to be calculated to deceive, except where the existing insurer is in the course of being dissolved and signifies its consent to the Authority.

Section 5(2) provides that if an insurer is, through inadvertence or otherwise, registered by such a name without that consent, it shall, if called upon by the Authority on the application of the other insurer, change its name within a time fixed by the Authority.

The purpose is protection of the policyholder, not of the trade mark. A person buying a policy from "New Indian Assurance" must not think he is buying from The New India Assurance.

The minimum benefit: section 4

Section 4, as substituted in 2015, provides that the insurer shall pay or undertake to pay on any policy of life insurance or group policy issued a minimum annuity and other benefits as may be determined by regulations, excluding any profit or bonus; and that this shall not prevent an insurer from converting a policy into a paid up policy of any value or paying a surrender value of any amount.

Before 2015 the Act itself fixed the figure. It now leaves it to the regulations, which is the pattern the 2015 and 2025 amendments follow throughout: the Act states the principle and the Authority states the number.

Where an insurer may trade: section 64VC

Section 64VC provides that no insurer shall, after the commencement of the Insurance (Amendment) Act, 1968, open a new place of business or close a place in India or outside India, or change, otherwise than within the same city, town or village, the location of an existing place of business situated in India or outside India, except in the manner specified by the regulations.

It is a branch licensing provision and it sits in Part IIC beside solvency, because an insurer that expands faster than its capital is a solvency problem before it is anything else.

Insurers established outside India

Section 63 requires an insurer whose principal place of business or domicile is outside India, and which establishes a place of business in India or appoints a representative here to obtain insurance business, to file six things with the Authority within three months: a certified copy of its constitutional instrument with a certified translation if it is not in English; a list of its directors if it is a company; the name and address of one or more persons resident in India authorised to accept service of process, with the power of attorney; the full address of its principal office in India; a statement of the classes of business to be carried on; and a statement verified by affidavit setting out any special requirements of the kind described in section 62 imposed in its country of origin on Indian nationals. Any change in those particulars must be furnished at once.

Section 64 requires such an insurer to keep at its principal office in India the books of account, registers and documents that will enable the returns required by the Act to be compiled and, if necessary, checked by the Authority, and to furnish the Authority within the time it determines an auditor's certificate that they are being so kept.

Section 62 is reciprocity. Where by the law or practice of a country outside India an Indian insurance company is required, as a condition of carrying on business there, to comply with a special requirement, whether as to deposits or assets or otherwise, not imposed on that country's own insurers under this Act, the Central Government may, if satisfied of its existence, direct by notification that the same or a similar requirement be imposed on insurers of that country as a condition of carrying on insurance business in India.

A worked example

A group of promoters incorporates Konkan Health Assurance Limited as a public company and applies to write health insurance only.

Section 2C is satisfied, because it is a public company. Section 6(1)(ii) requires a paid up equity capital of one hundred crore rupees for a person carrying on exclusively the business of health insurance, and the chapter on capital works that out. Section 5 requires the Authority to check the name against existing insurers.

The application then meets section 3(2A). The Authority examines whether the financial condition and general character of management are sound, whether the projected volume, capital structure and earning prospects are adequate, whether the public interest will be served, and whether the Act and the Authority's conditions have been complied with. If satisfied, it registers the company and grants a certificate for health insurance business.

Konkan then pays the annual fee under section 3A. If it stops paying, the certificate becomes liable to cancellation, not cancelled automatically.

Now change one fact. Suppose Konkan wishes to open forty branch offices in its first year. Section 64VC requires it to do so only in the manner specified by the regulations. And suppose it wishes to write fire insurance as well. Its certificate is for the particular class, so it must apply again; the amendment to section 6A(1) has removed the statutory bar to composite registration, but registration for each class is still what section 3 requires.

What it does NOT mean

It does not mean the Authority must register a qualifying applicant. Section 3(2A) says the Authority "may" register if satisfied, so there is a discretion, exercisable on the four grounds.

It does not mean failure to pay the fee cancels the certificate. It makes it liable to cancellation: section 3A(2).

It does not mean registration once granted is permanent. The Authority may cancel it under section 3(4) on the grounds the Act sets out, and section 2D keeps a deregistered insurer bound by the Act until its liabilities are satisfied.

And it does not mean a name is protected as a trade mark. Section 5 protects the policyholder from confusion, and the remedy is a direction to change the name.

Quick revision

Section 3(1): no person may begin, and no insurer may continue, to carry on any class of insurance business in India without a certificate of registration from the Authority for that particular class.

Section 3(2): the application is in the form, manner and with the documents and fee the regulations specify, substituted by Act 40 of 2025.

Section 3(2A), the four tests: sound financial condition and general character of management; adequate projected volume, capital structure and earning prospects; the interest of the general public; and compliance with the Act and the Authority's conditions.

Section 3A: annual fee, and failure renders the certificate liable to be cancelled.

Section 5: no identical or deceptively similar name; the Authority may require a change.

Section 4: minimum annuity and benefits as the regulations determine, excluding profit or bonus.

Section 64VC: no new place of business, closure or relocation outside the same city except as the regulations specify.

Sections 62, 63 and 64: reciprocal disabilities; six particulars to be filed within three months by a foreign insurer; books at the Indian principal office with an auditor's certificate.

Test yourself

1. What must the Authority be satisfied of before registering an insurer? Under section 3(2A): that the financial condition and general character of management are sound; that the projected volume of business, capital structure and earning prospects are adequate; that the public interest will be served; and that the Act and the Authority's conditions have been complied with.

2. Is registration general or class by class? Class by class. Section 3(1) requires a certificate "for the particular class of insurance business".

3. What happens if an insurer fails to pay its annual fee? The certificate of registration becomes liable to be cancelled under section 3A(2). Cancellation is not automatic.

4. May an insurer be registered under a name closely resembling that of an existing insurer? No, unless the existing insurer is being dissolved and consents. If it happens inadvertently, the Authority may require the name to be changed on the other insurer's application: section 5.

5. What must a foreign insurer file with the Authority when it opens an Indian place of business? Under section 63, within three months: its constitutional instrument certified and translated; a list of directors; the name and address of a person in India authorised to accept service with the power of attorney; the address of its Indian principal office; the classes of business; and an affidavit about any special requirements imposed on Indian nationals in its country of origin.

6. Which section controls the opening of a new branch, and where does it sit? Section 64VC, in Part IIC of the Act beside the solvency provisions, because uncontrolled expansion is a solvency risk.