A clutch of amendments to reinsurance regulations, including one halving minimum capital requirement for Foreign Reinsurance Branches (FRBs) from ₹100 crore to ₹50 crore with the provision to repatriate any excess assigned capital, has been approved by the Insurance Regulatory and Development Authority of India (IRDAI).
The format for reinsurance programmes has been simplified and regulatory reporting requirements have been rationalised for increased clarity and effectiveness. The order of preference for insurers has been streamlined from the previous six levels to four, the insurance regulator said on Thursday on amendments approved at its 123rd Authority Meeting recently.
The focus is to increase capacity of the reinsurance sector towards helping accommodate growing demand and manage larger risks as well as to enhance technical expertise within the industry. Reduction of compliance burden on various entities operating in the sector and allowing them to navigate the regulatory landscape more efficiently is another aspect of the amendments, IRDAI said.
The overarching objective is to harmonise and streamline existing regulations that apply to Indian insurers, Indian reinsurers, FRBs and International Financial Services Centre Insurance Offices (IIOs). The regulatory framework for IIOs has been aligned with IFSCA regulations with the intent to remove dual compliance.
“This comprehensive regulatory overhaul is strategically designed to position India as a prominent global reinsurance hub. By working in tandem with the International Financial Services Centres Authority (IFSCA), IRDAI aims to cultivate an environment conducive to the growth of reinsurance activities, both within and outside the conventional Indian market,” the regulator said.
As the amendments take effect and the reinsurance market in the country evolves, the insurance sector is poised to witness accelerated growth, increased international recognition and a more robust ecosystem, it said in a release.