Insurance company startup?!?
was wondering nearly the possibility of starting up my own insurance company covering cars. do i need a license to do this. do i hold to make myself specified to anyone that i am insuring people to drive, eg :- affairs of state, police?
any help would be appreciated
Answers:
As this is appearing surrounded by a UK forum my reply is UK oriented. If you are a Brit I'd suggest ignore the stuff about licence, agents and states as this sounds US, and whilst it may be correct it is not relevant!
First, do you mean an insurance company or an insurance intermediary. The former creates insurance policies and underwrite the risk. They're the firm that pays the claim. The second sells the policies provided by other insurance companies.
For both you'll involve approval from the Financial Services Authority - and you'll need to comply beside their regulation.
If you're an insurance company you will need to demonstrate you enjoy adequate financial resources. That mechanism having money set aside to repay the claims you expect to have to reimburse (or reinsurance contracts). You will need to demonstrate to the FSA that you enjoy a sound underwrite model.
You will also need to find approval from the Department for Business, Enterprise and Regulatory Reform (formerly the DTI).
In both cases they will consider whether you are a fit and proper person to own and run an insurance company.
Depending on what you're doing you'll also necessitate to register with the Information Commissioner's Office for Data Protection purposes, you may enjoy to register with the Department for Justice depending on what you do next to your claims, and you may also be contributing data to mixed government and industry databases when you get rid of an individual policy or receive a claim.
There are also specific pieces of legislation that cover motor insurance that will affect the way you construct your policies.
If you plan on selling other people's policies enthusiasm is easier than this, but still complex. The FSA and ICO registrations remain, however, you won't be supplying data to fraud registers etc. Your requirements for solvency will be lower, but you will own responsibilities relating to the sale of the products you provide.
Good luck!
yes you need an Insurance License.
yes you would hold to register with FSA financial services as adjectives general insurance is immediately regulated.
Unless you have something like lb10,000,000 assets and copious re-insurance I would forget it. You also need DTI approval as resourcefully as FSA approval as well.
And i.e. before you enjoy marketing costs, set up costs and can you really offer better underwrite than the current insurers (of which there are too many) in need access to the various databases for claims statistics?
No one is making money out of vehicle insurance believe it or not!
I would suggest getting an indepth awareness of the insurance business. Attempting to start an insurance company (the company is who provide the insurance policy) is a complex business venture that requires millions of dollars and is significantly regulated by the state where you want to trade policies.
You probably mean an insurance agency (agencies flog the policies of insurance companies to the public). Agents need to hold a license from the state where they want to put up for sale policies. Also, insurance companies will check into the background of the agents prior to allowing them to go their policies.
If you are interested in a trade in insurance, you really should step get a living with an existing agency of company. Selling insurance isn't approaching selling cars, etc. You are selling your knowledge and a promised to pay envelope when needed. To be successful, you need to gain this ease.
Start it up but beware of the 'crash for cash' scam. The police are well hot on this.