Are you planning to set up an Insurance Broker firm in Singapore? Epica Compliance can file application, develop manuals and provide guidance on internal implementation of compliance requirements to assist you with registration, apply for the license on your behalf, and provide ongoing compliance support.
First, it is important to understand the difference between an insurance broker and an insurance agent. Generally, we meet many insurance agents in our regular course of work. It seems that most of these agents do not have any licensing requirements. However, the case is not the same for an insurance broker. An insurance broker must secure the required license from the Monetary Authority of Singapore.
Insurance brokers help people understand their insurance requirements and provide the proper guidance by offering professional services to their customers. They act as a mediator between a person looking to purchase an insurance policy and an insurance company. On the other hand, an insurance agent is a salesman of the insurance company trying to sell their policies.
The below table summarises the difference between the two.
|Registration||Registered with MAS||Registered with GIA (General ins association)|
|Number of companies for whom act for||Unlimited||1-3 Companies only|
|Options for customers||Many||Limited|
|How do they earn?||Commission||Commission + Incentives|
|Setup||More robust infrastructure is required as in-house Compliance, Internal audit, Technology, and Data Protection are required||Uses insurance company setup|
|Size & Potential||Large||Limited|
In simple terms, an insurance broker is a miniature version of an insurance company that is trying to help its customers find the best insurance policy depending on their needs.
Insurance brokers source insurance binding services from numerous companies and provide the most relevant and most beneficial solutions to their customers. An IB firm can have many brokers as their staff members to advise multiple clients on appropriate insurance policies. A broker firm can operate at a vast scale.
MAS Classifies the insurance business activities into three categories;
An insurance broker firm must engage in at least one of these activities to be subject to licensing requirements. It can engage in any two or all three of them also.
The requirements differ based on the number of activities the company plans to engage in.
The MAS views various insurance activities as independent units in a company. The intermingling of staff duties and management functions within these divisions is not usually preferred. Hence, the capital and PII requirements of an insurance broker firm are directly proportionate to the number of insurance activities it performs.
The Chief Executive Officer [“CEO”] and Executive Directors [“EDs”] should have at least 5 years of relevant working experience. They should also have satisfactory academic and/or professional qualifications. In addition, the CEO should have at least 3 years of managerial experience in the relevant field.
The applicant must have at least 3 years of proven track record with respect to the insurance broking business type that it intends to carry on in Singapore. In case the applicant does not satisfy the 3-year track record requirement, the Authority may take into account the (i) track record of the applicant’s substantial shareholders; and (ii) experience and qualifications of the applicant’s key management staff, such as its CEO and EDs when assessing the application
Depending on your circumstances, we will be required to present a proper case to the MAS, regarding the background, track record and your business plans.
When assessing an IB application, the MAS takes these factors into account:
|General Insurance Broker||7000 SGD|
|General Reinsurance Broker||5000 SGD|
|Life Reinsurance Broker||2500 SGD|
Submitting an IB application is a time-consuming process. A compliance partner is recommended to improve your chances of a successful application significantly.
Epica Compliance can take that weight off your shoulder.
Once you engage our services, we take 4-6 weeks to prepare all your documents, present a strong case and file the application. The MAS is expected to take 4 months of processing time after submitting the application.
All IB firms must have an internal compliance function. An IB must ensure that it has adequate compliance arrangements commensurate with the scale, nature, and complexity of its operations.
Typically, an IB is required to develop and implement the following policies in their operations:
Submitting an Insurance Broker License application and initial compliance setup are not easy tasks. You need to fulfil a lot of requirements, like:
Engage a professional firm to apply for your insurance broker license and help with the appropriate compliance setup for your business.
Our packages are comprehensive. The price covers everything required.
Our service team has many years of experience. we will guide and assist you throughout your engagement.
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We are very straightforward with our approach. If something in your plan is not likely to work out we will be frank to tell you so.