No ₹50 Lakh? No Problem! How Credit Insurance Can Secure Your Recruitment Agent License
- Ms. Jasmine
- Apr 25
- 3 min read
The Credit Insurance (CI) scheme, also known as the Surety Insurance Scheme, is a government-endorsed alternative to the traditional Bank Guarantee (BG) under the Emigration Act, 1983. Introduced by the Ministry of External Affairs (MEA), this scheme is designed for Registered Recruiting Agents (RAs) to fulfill the financial criteria required for obtaining or renewing a Recruitment Agent License Certificate (RC).
Purpose of the CI Scheme
The CI scheme ensures financial coverage for Indian migrant workers against misconduct or liabilities caused by RAs. Issued by MEA-approved insurance companies, the scheme provides coverage up to ₹50 lakh for a period of five years, with an extended claim reporting period of 3.5 years. This initiative is aimed at improving financial access for Recruitment Agents and strengthening protections for migrant workers.
Key Highlights of the Credit Insurance Scheme
Alternative, Not a Replacement: CI is an optional alternative to the existing BG system, allowing RAs to redirect their locked capital into expanding overseas recruitment opportunities.
Application Process: Upon MEA approval of an RA's RC application, the RA may opt to approach MEA-approved insurance companies to purchase the CI policy.
Eligibility: Currently, only RAs with a recruitment capacity of 1,000 or more can participate. Future inclusion of smaller RAs is under consideration.
Policy Details: Valid for five years with an added 3.5-year claim window post-expiry. Premium for a policy is ₹885,000 (excluding GST).
Renewal: The policy is renewable for another five years upon expiry and premium payment.
Switching from BG to CI: RAs moving from BG to CI get additional retrospective coverage. The BG is returned once the CI policy is uploaded on the eMigrate portal.
Exclusive Choice: RAs must commit to either the BG or CI scheme; mixed usage is not allowed.
Submission: The original policy document must be submitted to the MEA for record-keeping.
Claim Responsibility: In case of verified claims, the insurer compensates up to ₹50,000 per worker within 30 days. Claims under the Pravasi Bhartiya Bima Yojna (PBBY) are handled separately.
Recoupment Clause: If compensation is paid, RAs must restore the insured amount by paying an additional premium on a pro-rata basis.
Coverage Scope: Only emigrants processed legally via the eMigrate portal are covered. Both ECR and ECNR workers fall under this policy.
RA Obligations: The RA is responsible for grievance redressal, coordinating exit visas, and handling employer-side disputes, even when financial compensation is managed by the insurer.
Claims Limit: Total claims cannot exceed ₹50 lakh during the policy term.
Switch-Back Provision: RAs can return to the BG system only once within the 5-year CI period. Any applicable refund is prorated and subject to MEA confirmation.
Eligibility Criteria for CI Scheme
Recruitment Volume: Minimum recruitment capacity of 1,000.
MEA Approval: Required for policy issuance.
Compliance: Must adhere to the MEA-defined CI policy guidelines.
Policy Tenure and Pricing
Validity: 5 years + 3.5-year extended claim window.
Premium: ₹885,000 plus GST.
Key Benefits for RAs
RAs lacking a ₹50 lakh fixed deposit or collateral for a BG can now fulfill the MEA’s financial security requirements via a one-time insurance premium. This is ideal for high-volume RAs seeking a more accessible route to compliance.
Limitations
CI policies are not applicable for licenses below 1,000 recruitment capacity (e.g., 100+ capacity licenses that need only an ₹8 lakh BG). #Recruitment Agent License #RALicense #RALicense Requirements
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