IRDAI proposes reinsurance amendments, new order of preference
The IRDAI exposure draft proposes removing the order of preference favouring GIC Re and three foreign reinsurance branches (FRBs). Check the new order of preference that IRDAI has mooted.
The Insurance Regulatory and Development Authority of India (IRDAI) on October 20, 2022, released an exposure draft proposing amendments to reinsurance regulations.
The objective of these regulations is to harmonise the provisions of various regulations applicable to insurance companies and reinsurers, including foreign reinsurance branches (FRBs) like Lloyd’s to enhance the ease of doing business by amending the corresponding regulations.
The draft proposes removing the order of preference favouring GIC Re and three FRBs. Also, the draft proposes a new order of preference for ceding the insurance business.
The regulator has sought the views or comments of the various stakeholders and the general public to the exposure draft, that are to be submitted by November 11, 2022.
According to the current provisions, quotes have to be sought from GIC Re and three FRBs. If the lowest quote is from FRB, then it has to be disclosed to GIC Re. The business goes to GIC Re if it matches the lowest quote.
Coming to the proposed order of preference, IRDAI has mooted three categories:
In the first category, Indian reinsurers come first, followed by FRBs, Lloyd's India, and international financial service centre insurance offices (IIOs).
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Cross border reinsurers (CBRs) are in the second category and other Indian insurers (facultative) in the third.
(Edited by : Shoma Bhattacharjee)
First Published: Oct 25, 2022 5:35 PM IST
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