22 June 2015
Recently, GFIA wrote to the Insurance Regulatory and Development Authority of India (IRDAI) to comment on its second draft of the regulations for the registration and operations of branch offices of foreign reinsurers, excluding Lloyd's of London.
GFIA thanked the IRDAI for the positive amendments that it had made to the first exposure draft regulations, and also asked for clarification of the section on the "order of preferences for cession by Indian insurers". It stressed that this could impose some unnecessary and detrimental restrictions on Indian insurers, particularly those that are affiliated with larger international insurance groups, which represent the overwhelming majority of private life insurers operating in India.
Now that reinsurance branches will be allowed, GFIA asked the IRDAI to reconsider the retention limits based on the insurer's years of operation that are imposed by the 2013 life insurance-reinsurance regulations. It recommended that the IRDAI instead focuses on ensuring that the ceding insurer has adopted a prudent approach to the purchase of reinsurance and to the management of risk associated with purchasing reinsurance.
