Insurtech licences: IRDAI brokers, corporate agents and insurers explained

There is no single insurtech licence. IRDAI is the regulator under the Insurance Act 1938 and the IRDAI Act 1999, and it registers different kinds of players. A tech startup picks the type that fits what it wants to do. The rules for intermediaries are in the IRDAI (Insurance Intermediaries) Regulations 2024, which were amended in 2026, as of November 2026.

The big divide is between a company that sells insurance and a company that carries the risk. Sellers are called intermediaries. The one that carries the risk is the insurer.

Four routes cover most Indian insurtechs. Each is a different trade-off between freedom and cost.

A fifth type, the insurance marketing firm, also exists but is used less by tech startups.

• Web aggregator: a website or app that compares insurance products from several insurers and passes leads to them. It does not give advice or issue policies.
• Insurance broker: represents the customer, can advise, compare and place cover with many insurers, and earns commission from the insurer.
• Corporate agent: a company that sells for a limited number of insurers under tie-ups, and earns commission.
• Insurer: carries the risk, issues the policy and pays claims. It needs a full IRDAI registration and large capital.

A web aggregator earns mainly a fee for leads or a fixed amount per sale, because it only introduces the customer. A broker earns commission as a percentage of premium, plus sometimes advisory or claims-help fees. A corporate agent also earns commission, but is limited to the insurers it has tied up with. An insurer earns the premium and pays claims, and makes money from the gap, plus the return on investing the premium before claims are paid.

The commission rates are set by IRDAI rules and the insurer's offer, and they differ by product type and year of policy. A reader should not assume a rate from a headline.

Capital is where the routes differ most. These are the figures published on the IRDAI site and in law firm notes, and the amounts should be checked against the current regulations.

Insurers face far higher bars. Under the Insurance Act, the paid-up capital for a life or general insurer has long been set at ₹100 crore, and reinsurers have a higher level. Foreign ownership of insurers is capped by law, and a 2025 amendment act changed that limit, so check the latest text before planning a foreign-funded insurer.

• Web aggregator: minimum paid-up capital of ₹25 lakh, with net worth kept at or above that level.
• Direct insurance broker: minimum capital of ₹75 lakh, with a higher level for reinsurance and composite brokers.
• Corporate agent: no large capital rule, but a registration and training requirement for the staff who sell.
• Insurer: ₹100 crore paid-up capital as the long-standing base for life and general cover.

Well-known Indian examples show the spread. Policybazaar, run by PB Fintech, operates as a licensed insurance broker with a large online platform. Digit and Acko are full insurers built as technology-led companies. Many smaller startups sell as corporate agents for several insurers or as brokers, and build tools such as claims help or group cover for employers.

Some build a hybrid. A startup may begin as a corporate agent or broker to learn the market, then partner with an insurer to design a product, and later apply for its own insurer licence once it has the data and capital.

IRDAI replaced older, separate sets of rules for each intermediary type with a combined Insurance Intermediaries Regulations 2024. The aim was to ease registration and to bring brokers, agents, web aggregators and marketing firms under one framework. A reader will still see older names and figures in articles, since many pages were written before the change.

In July 2026 IRDAI notified amendments that ask intermediaries to keep a record of the person involved in each sale and to show that person's name on key documents, as reported in legal notes. The amendments also add disclosure duties for some firms and set a deadline for intermediaries to apply under the revised framework. A company that misses it must seek fresh registration.

A 2025 amendment act on insurance laws also changed the limit on foreign ownership of insurers. The details of how it applies are better read in the Act and the IRDAI circulars, not in a news summary.

There is no single answer, but the trade-offs are clear. A web aggregator is the cheapest to set up, but it earns little per customer and cannot advise. A broker costs more in capital and compliance, but it can recommend products and earns commission. A corporate agent is quick to start, but the tie-up limit narrows the choice for the customer.

Many founders begin with a lighter route, prove that customers will buy online, and then think about a bigger licence. An insurer licence is a long project, needing deep capital, an appointed actuary and a board that meets IRDAI's tests of fitness.

The choice should follow the product. A startup selling group health cover to employers may need the freedom of a broker. One that offers a single embedded product inside another app may be better as a corporate agent.

A broker acts for the buyer and may recommend and place the policy. A web aggregator shows products side by side and passes the customer on. It does not advise and does not receive money as a broker would. The legal duties differ. A broker owes the customer a duty to give suitable advice. An aggregator mainly owes the customer honest display of information.

People often use the two words as if they meant the same thing, and a headline may call a broker an aggregator.

Ask which licence the company holds, and look it up in IRDAI's public lists. Ask who carries the risk, because it is the insurer and not the seller. Ask how it earns, because commission-led businesses depend on the insurers' payout terms.

Rules in this area change often. IRDAI notified amendments to the intermediary regulations in July 2026 covering traceability of the person who sells, among other points. This page is general information, so check with a qualified professional before choosing a route.