Insurance regulator approves amendments to reinsurance regulations
The order of preference for various categories has also undergone a notable simplification. Previously comprising six levels, the order has now been trimmed down to four distinct levels.
The Insurance Regulatory and Development Authority of India (IRDAI) on Thursday approved substantial changes to the reinsurance regulations, with the aim of fostering a more robust and competitive reinsurance landscape in the country. The key revisions include minimum capital requirement update, streamlined order of preference, among others.
The regulator has made a pivotal adjustment in the reinsurance sector by reducing the minimum capital requirement for Foreign Reinsurance Branches (FRBs). This requirement has been lowered to Rs 50 crore from the previous threshold of Rs 100 crore. This move is poised to encourage greater participation and investment in the reinsurance market.
Streamlined order of preference
The order of preference for various categories has also undergone a notable simplification. Previously comprising six levels, the order has now been trimmed down to four distinct levels. These levels are as follows:
Consolidation of foreign reinsurance branches and IIOs
A significant change involves the grouping of Foreign Reinsurance Branches and Indian Insurers Operating Offices (IIOs) under Level 2. This alignment aims to enhance coordination and streamline operations within this category.
Maximized participation from key entities
The updated regulations underscore the importance of active involvement from pivotal players such as Indian Reinsurers, FRBs, and IIOs. This reiterates the pivotal role these entities play in fortifying the reinsurance sector's growth.
Regulatory framework harmonization
The regulatory framework for Indian Insurers Operating Offices (IIOs) has been harmonized with the regulations set forth by IFSCA. This convergence ensures a synchronized and seamless approach to governing the operations of these offices.
First Published: Aug 24, 2023 2:38 PM IST
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