 "Domestic re-insurers to get preference: Irdai")
Insurance Regulatory and Development Authority of India (Irdai) has said that first preference for all treaties by Indian insurers will be given to Indian re-insurers. The regulator said that if the Indian re-insurer refuses the risk, then it can be given to branch office of a foreign re-insurer. However, the preference norms will be reviewed after a year. Irdai said that every Indian insurer shall obtain best terms for their facultative and treaty surpluses from Indian re-insurer(s) having a minimum credit rating.
Minimum credit rating has been defined as having good financial security characteristics for the previous three years from any of the internationally renowned credit rating agencies and also from at least three entities which have been granted certificate of registration.
The order of preference is Indian re-insurer(s) having a minimum credit rating, followed by other Indian re-insurer(s) and branch office of foreign re-insurers. The balance, it said, can be offered to Indian insurers and overseas re-insurers.
The re-insurance industry is worth Rs 18,000 crore in India of which life insurance constitutes about Rs 1,200 crore. In its Registration and Operations of Branch offices of Foreign Re-insurers other than Lloyd's Regulations 2015, Irdai had said that with respect to order of preference for cessions, the insurer could offer it for participation to any Indian or international re-insurer with a branch presence.
Minimum credit rating has been defined as having good financial security characteristics for the previous three years from any of the internationally renowned credit rating agencies and also from at least three entities which have been granted certificate of registration.
The order of preference is Indian re-insurer(s) having a minimum credit rating, followed by other Indian re-insurer(s) and branch office of foreign re-insurers. The balance, it said, can be offered to Indian insurers and overseas re-insurers.
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Foreign re-insurers had been unhappy with this proposal and had also written to the regulator to do away with these norms. After the final guidelines for opening of branch licences for foreign re-insurers, several re-insurers like Swiss Re, Munich Re, Hannover Re, XL Catlin, SCOR and RGA (Reinsurance Group of America) have applied for branch licence.
The re-insurance industry is worth Rs 18,000 crore in India of which life insurance constitutes about Rs 1,200 crore. In its Registration and Operations of Branch offices of Foreign Re-insurers other than Lloyd's Regulations 2015, Irdai had said that with respect to order of preference for cessions, the insurer could offer it for participation to any Indian or international re-insurer with a branch presence.