Irdai reduces obligatory cession of premiums to GIC Re to 4% from FY23

Firm stands to lose about Rs 1,500 cr of premium, say experts

The insurance regulator has lowered the obligatory cession of sum insured on each general insurance policy that is to be reinsured with state-owned reinsurer GIC Re to 4 per cent, beginning financial year 2022-23 (FY23), from 5 per cent earlier. The move could result in GIC Re losing about Rs 1,500-2,000 crore of premiums, said industry experts.

In a gazette notification, the Insurance Regulatory and Development Authority of India (Irdai) said: “The percentage cession of the sum insured on each general insurance policy to be reinsured with the Indian re-insurer(s) shall be 4 per cent in respect of insurance attaching during