Insurance Company Licence in India
Starting a life, general, health or reinsurance company in India needs a certificate of registration from IRDAI under Section 3 of the Insurance Act, 1938. It is the most capital-heavy licence in financial services: ₹100 crore of paid-up equity for most insurers, and 100% foreign investment is now allowed.
What it is
An insurance company licence is IRDAI’s certificate of registration to carry on life, general, health or reinsurance business in India. Without it, no one can begin any class of insurance business. IRDAI grants it only after it is satisfied about the promoters, financial soundness, projected business and capital adequacy.
The Act defines an Indian insurance company as a public company under the Companies Act, 2013 whose sole purpose is to carry on life, general, reinsurance or health insurance business. The process runs under the IRDAI (Registration of Indian Insurance Companies) Regulations, 2022, in three stages: Form IRDAI/R1, Form IRDAI/R2 and the certificate in Form IRDAI/R3.
Who it applies to
Planning a new insurer?
Promoter groups such as banks, financial institutions, large corporates and investor consortia who want to build a life, general, health-only or reinsurance company. Picture a group of financial promoters in Gurugram pooling capital for a health insurer. The cheque is the easy part. The approvals are not, and the project runs for years.
A foreign insurer looking at India?
The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025 raised the foreign investment cap in Indian insurers to 100%, so foreign groups can now consider full ownership.
Selling insurance rather than underwriting it?
Run a Faridabad agency and want to sell or compare insurance, not carry the risk? You need an intermediary registration, not an insurer licence. The broker and web aggregator pages explain those routes.
Why it matters
The only lawful way to underwrite
Section 3 bars anyone from beginning insurance business in India without a certificate.
A clearer ownership path
Section 3AA now allows foreign holdings up to 100% of paid-up equity. Foreign-owned insurers need only one of the Chairperson, MD or CEO to be a resident Indian citizen.
A licence IRDAI can supervise
Registration brings annual fee, solvency and reporting duties under Section 3A and the regulations. Policyholders and reinsurers look for exactly this discipline.
Minimum paid-up equity capital by class
| Type of insurer | Minimum paid-up equity capital (Section 6) |
|---|---|
| Life insurance or general insurance | ₹100 crore |
| Health insurance (exclusively) | ₹100 crore |
| Reinsurance (exclusively) | ₹200 crore |
| Foreign reinsurer branch | Net owned funds of at least ₹1,000 crore |
Before you plan the cap table, note one more change: IRDAI approval for share transfers in public insurance companies now starts at 5% of paid-up equity, up from 1%.
Documents required
About the promoters
- Promoter and investor details with fit-and-proper information
- Audited financials of promoter entities
- Shareholding pattern with the proposed capital structure
- Undertakings on future capital support
About the business plan
- Projected business, premium and solvency plan for the first years
- Class of business sought: life, general, health or reinsurance
- Actuarial and underwriting approach, certified by the qualified professionals concerned
- Reinsurance, investment and risk-management policies
About the company
- Incorporation papers of the public company with insurance as its sole object
- Board, chairperson, MD and CEO details
- Proof of paid-up equity capital under Section 6
- IT, data-protection and grievance systems
How it works
Test the plan with us first
In practice, we review promoter eligibility, class of business and capital before you spend a rupee on drafting. Many ideas change shape at this stage, and it is the least costly time to change them.
Form the public company
We incorporate or restructure the entity as a public company under the Companies Act, 2013, with insurance as its sole object. See our public limited company registration service.
File Form IRDAI/R1
The requisition for registration goes to IRDAI with its non-refundable fee. We prepare the papers and answer IRDAI queries.
File Form IRDAI/R2
After the first-stage clearance, the application for registration follows with the detailed documents and the second fee. Here is the catch: the business plan and actuarial inputs need qualified professionals, and we coordinate them so the filing is consistent.
Receive Form IRDAI/R3 and prepare to commence
On grant of the certificate, we help with post-registration set-up, annual fee under Section 3A and reporting calendars.
Timelines
R1 and R2 validity windows
Under the 2022 Regulations, a no-objection certificate stays valid for six months, extendable by three, and the R1 and R2 stages carry their own validity windows. We track each one.
Commence business within 12 months
The business must commence within 12 months of the certificate, extendable to a maximum of 24 months.
Effective dates of the 2025 Act
The amendment Act took effect on 5 February 2026, with the foreign investment changes following under the FEMA rules.
What happens if you miss it
Applications lapse
If a stage validity window runs out, the application lapses and you may have to start that stage again, with a fresh fee.
Unlicensed business is an offence
Insurance business without a certificate breaches Section 3, and IRDAI penalties can now go up to ₹10 crore, with daily penalties for continuing default.
Annual fee default risks cancellation
Under Section 3A, an insurer that does not pay its annual fee puts its certificate at risk of cancellation.
Frequently asked questions
What is the minimum capital to start an insurance company in India?
Section 6 of the Insurance Act requires paid-up equity capital of ₹100 crore for a life or general insurer and for an exclusive health insurer, and ₹200 crore for an exclusive reinsurer. A foreign reinsurer branch needs net owned funds of ₹1,000 crore. These are minimums, and IRDAI can expect more depending on the business plan.
Can a foreign company own 100% of an Indian insurer?
Yes. Section 3AA, as amended by the Sabka Bima Sabki Raksha Act, 2025, allows aggregate foreign holdings of up to 100% of paid-up equity. At least one of the Chairperson, Managing Director or CEO must be a resident Indian citizen. We help you plan the structure and the filings around this rule.
Which form is used for insurer registration?
The 2022 Regulations use three forms: IRDAI/R1 for the requisition, IRDAI/R2 for the application, and IRDAI/R3 as the certificate of registration. R1 and R2 each carry a non-refundable fee of ₹5 lakh. We prepare and file both and track the validity of each stage.
Which type of company can hold an insurance licence?
An Indian insurance company must be a public company incorporated under the Companies Act, 2013, whose sole purpose is life, general, reinsurance or health insurance business. A private company or LLP cannot hold an insurer licence. We can restructure your entity before filing if needed.
How long do I have to start business after getting the certificate?
Business must commence within 12 months of the certificate, and IRDAI can extend this to a maximum of 24 months. We help you build a launch checklist so the deadline does not catch you out.
Do I need IRDAI approval to transfer shares in an insurer?
Yes, for larger transfers. The 2025 Act raised the threshold for IRDAI approval of share transfers in public insurance companies from 1% to 5% of paid-up equity. Transfers below the threshold still need to be reported as the rules require. We help you plan transfers and file intimations on time.
Is an insurance intermediary licence the same as an insurer licence?
No. An insurer carries the risk and needs a Section 3 certificate and Section 6 capital. An intermediary such as a broker or web aggregator sells or places insurance and has far lower capital needs. Many founders start as intermediaries first. Our broker and web aggregator pages explain those routes.
How does Taxhint help with an insurance company licence?
We review promoter eligibility and structure, form the public company, prepare the R1 and R2 documents, file with IRDAI, answer queries and set up post-licence compliance. Actuarial, valuation and legal work is signed by the qualified professionals concerned. We coordinate them so your filing reads as one consistent plan.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
Government fees under the 2022 Regulations include ₹5 lakh with Form IRDAI/R1 and ₹5 lakh with Form IRDAI/R2, both non-refundable. Section 6 paid-up capital is an investment, not a fee. Annual fees under Section 3A apply after registration.
Ready to begin?
Share your promoter group and class of business, and we will map the capital, structure and IRDAI stages for you.