IFSCA (Management, Administrative and Market Conduct of insurance business

International Financial Services Centres Authority (IFSCA) vide notification ref. No. F. No. IFSCA/2022-23/GN/REG035 has published IFSCA (Management Control, Administrative Control and Market Conduct of insurance business) Regulations, 2023 in the Official Gazette on May 2, 2023 with an aim to put in place regulatory framework related to management control, administrative control and market conduct of insurance business carried out by an International Financial Services Centres Insurance Office (IIO) or International Financial Services Centres Insurance Intermediary Office (IIIO).

The key provisions as mentioned under the Regulations are as follows:

• Important terms are defined in the Regulations such as – benefits, confidential information, custodian of information, subordinated debt etc.
• Change in shareholding pattern and management control: The Parent Entity of an IIO set up in unincorporated form shall immediately notify IFSCA about the changes, if any, in the Shareholding Pattern or Management Control ensure that the undertakings given to IFSCA regarding maintenance of assigned capital or solvency margin and for meeting all liabilities arising out of insurance or re-insurance business carried out by such IIO, shall continue to remain valid even after change in shareholding pattern or management control.
• IIO set up in unincorporated form, may adopt Board approved policies of its Parent Entity, if the standards specified under the said regulations are covered thereunder for the following policies:
• Policy on allocation of direct expenses and apportionment of indirect expenses of management under respective insurance segments including the Policy on payment of commissions to insurance agents, intermediary or insurance intermediary.
• Policy on protection of interest of the policyholders for their direct insurance business
• Places of Business : IIO shall formulate a Board approved Policy on opening or closing of a place of business
• Outsourcing: IIO shall ensure to put in place prudent practices on management of risks arising out of outsourcing with a view to prevent negative systemic impact and to protect the interests of the policyholders.
• Sharing of Confidential information : Process for sharing of confidential information concerning domestic or foreign entity by the requested entity is defined under the said Regulations.
• Advertisements : IIO shall adopt fair, honest and transparent practices while issuing advertisements and avoid practices that tend to impair the confidence of the general public and shall also ensure that the policy issued to the policyholder is in conformity with the advertisements issued on its behalf.
• List of prescriptions issued by IRDAI which would cease to apply in IFSC is also given in the said Regulations.
• IIO or IIIO, as the case may be, operating in IFSC prior to commencement of these Regulations, shall comply with the additional requirements specified, if any, within a period of three months from the commencement of these regulations or within such extended period as may be specified by IFSCA.

Source category: IRDAI

Attachments

• /2023/193_2023-05-02_-_IFSCA_(Management_Control,_Administrative_Control_and_market_Conduct_of____.pdf