The Insurance Regulatory and Development Authority of India (Irdai) is expected to take a final decision on new reinsurance regulations in its board meeting scheduled on Friday. Sources in the insurance industry added the board will also look into giving out a few new licences to some new standalone health insurers and branches of some new foreign re-insurance players.
In May last year, insurance regulator had constituted an ‘Expert Committee on Reinsurance’ headed by former member of Irdai, M Ramprasad to revamp the existing reinsurance regulations set-up to further streamline reinsurance operations in the country. The committee, that had members including foreign reinsurers and other experts, had unveiled the draft regulation ‘Insurance Regulatory and Development Authority of India (Reinsurance) Regulations, 2018’ for industry feed-back at start of this year in January.
The revamped regulations also aim to ensure that maximum reinsurance business is retained within the country and preference would be given to Indian domiciled entities — with the first right of refusal lying with the General Insurance Corporation of India (GIC Re) and then to foreign reinsurers (FRBs) and other ‘Indian reinsurers’. The committee, in its report, had said, “The proposed regulations would ensure that Indian insurer places its reinsurance amongst at least four reinsurers. It would ensure wider spread of large risks and avoid domestic risk spiral in the market.
