Draft IRDA regulations 2018 suggest protectionism in reinsurance

The regulations prescribe that the risk can be placed with the Indian reinsurer (GIC) and FRBs within the Indian market without cession limits

Protectionism seems to be the flavour of the season, and the Indian insurance industry is also getting a taste of it, courtesy what is known as the “order of preference”. The origin of this dissonance is the Draft IRDA (reinsurance) Regulations, 2018, which has created a first right of refusal for Indian reinsurers and Foreign Reinsurer Branch (FBR). This, a large section of the industry says, amounts to limiting competition on reinsurance, thereby impacting policyholders adversely in terms of higher cost and limited coverage, and product innovation. 

This will also create significant risk for the policyholder and insurers in terms of