The registration and licensing of an insurance broker splits into two legal blocks: the broker's own intermediary activity does not require a license and is regulated by registration with the service, while the insurance activity license is mandatory for the insurer. On this page we explain both regimes: how a broker is registered, how the insurance license is issued, and when it is refused or cancelled.
Insurance agent and insurance broker
Intermediary activity in the insurance sphere is carried out by two subjects: the insurance agent and the insurance broker. An insurer may conduct insurance activity both directly and through an agent and a broker — and for certain types of insurance activity the insurer must act only through a duly registered insurance broker. Intermediary activity does not include actions performed by the insurer or its employee, nor the supply of additional information within another professional activity where the aim is not assistance in concluding or performing an insurance contract.
The broker's status carries name protection as well: the firm name of a person conducting insurance broker activity must contain the words "insurance broker" or a wording using them; without registration in the manner established by the service, no one may use those words in a firm name. This norm serves consumer protection: the name must be a guarantee of broker status.
Licensing of insurance activity
The insurance activity license is issued by the service and may be granted only to a legal entity in the organizational-legal form of a joint-stock company. The license is issued for only three activities: life insurance; non-life insurance; and reinsurance. The authority to issue life-longevity annuities belongs only to an insurer holding a life insurance license. The license is issued for an indefinite term, to a specific insurer, and its transfer to another legal entity is impermissible.
Beyond the general license conditions, the seeker fulfills additional ones: a written application; founding documents; the state registration document; an extract from the securities registry on the distribution of shareholders' shares; documents from licensed banks on the full monetary contribution of the minimum capital and the placement of minimum funds; identification documentation of the significant share and of the administrators; certified information on conformity with the fitness criteria; information on the origin of capital; a three-year business plan including the reinsurance program; information on the location of the head office and branches; information on the organizational structure and the audit committee; and proof of payment of the license fee. The license must also be used: the insurer is obliged to use it at least once every six months of conducting insurance activity.
Fitness of persons
The law imposes requirements on the persons governing the insurer as well: significant shareholders, supervisory board members, and leading persons must satisfy fitness criteria. A person is barred from being a significant shareholder if convicted of a grave or especially grave crime, of an economic crime, or if, during his period of activity, the company was declared bankrupt. A leading person must in addition have at least five years of experience in the financial or insurance sphere and at least two years in a leading position, as well as a diploma of higher education.
Refusal and cancellation
The service will not issue a license where the documents do not meet the requirements and are not corrected within the set term; where the information is inaccurate; where the administrators and significant shareholders do not satisfy the fitness criteria; where the applicant has no right to conduct insurance activity in Georgia; where the seeker's license in the same sphere has been cancelled and the grounds are not remedied; or where liquidation or bankruptcy proceedings are pending against its significant shareholder. Upon refusal the applicant receives a substantiated written response with the reasons indicated, and the decision may be appealed.
The license may be cancelled only by decision of the service: upon the organization's request; for systematic violation of economic limits and norms; where the requirement to use the license is not fulfilled; where the insurer engages in insurance practice dangerous for its financial condition or unhealthy practice that may significantly harm its policyholders; or where it is insolvent. From the moment of the cancellation decision the insurer may no longer conduct new activity — except performing obligations already assumed under contracts until their expiry; within three days of the decision entering into force it returns the license to the service, and liquidation begins upon cancellation.
Notifying changes
The life of a licensed subject demands constant updating: the insurer must notify the service in writing of changes in the documents submitted for licensing and provide the relevant documents within seven working days of the change. Commencing reinsurance activity also carries a notification duty — within ten working days. These requirements secure the continuity of supervision, and their breach is precisely the detail that distinguishes a healthy company from an unhealthy one.
Frequently Asked Questions
What legal form is required for the licence?
An insurance activity licence may be issued only to a legal person in the organizational-legal form of a joint-stock company.
For what term is the licence issued?
For an indefinite term; it is issued to a specific insurer and its transfer to another legal person is impermissible.
May the words "insurance broker" be used in a firm name without registration?
No — only a broker registered under the established procedure may use those words in its firm name.
Within what period are changes in the documents notified?
Within 7 working days from the relevant change, in writing, together with the appropriate documents.
How We Help on Legal.ge
The registration and licensing of an insurance broker is a document-intensive process. On Legal.ge you can consult a financial-sector lawyer who will assess the licensing conditions and prepare the submission package for the state service. Submit a request on the site and receive qualified assistance.