The Insurance Regulatory and Development Authority of India (IRDAI) has said that Indian reinsurers, including overseas reinsurance branches, must maintain at least 50% of their underwritten Indian reinsurance business within the country in an updated exposure draft on laws.
According to the IRDAI, the objective of the amendments is to “harmonise the provisions of various regulations applicable to Indian insurers and Indian reinsurers, including foreign reinsurance branches and Lloyd’s India, and to enhance the ease of doing business”.
The regulator has also said that any retrocession to an IIO (International Financial Service Centre Insurance Office) of up to 20% of Indian reinsurance business insured shall be balanced against the necessary minimum retention of 50%. An IIO is an office that a foreign entity has created to do direct insurance business or reinsurance business under the regulator’s approval.
The IRDAI initially released an exposure draft of reinsurance regulations for public comment in October. The regulations were adjusted in response to stakeholder feedback, and comments and recommendations were requested by 16 December. The updated rules will take effect on 1 April 2023.