General Insurance Corporation (GIC) is losing out on reinsurance business as local insurers are preferring to reinsure risks overseas.
According to norms laid down by the Insurance Regulatory and Development Authority (Irda), domestic insurers have to cede at least 20 per cent of their risks to the national reinsurer, GIC, or give it the first right of refusal.
In case of mega risks, the percentage is not fixed by the regulator, leaving room for insurers to reinsure overseas, many a times partly with their own foreign partner.
By failing to offer the national reinsurer the first right of refusal, the GIC is being deprived of premium income and the economy is losing precious foreign exchange, senior insurance officials said.
In cases of mega risk covers,
