Repatriation of Assigned Capital by FRBs_Lloyd’s India

IRDAI vide Circular Ref: No. IRDAI/REIN/CIR/MISC/224/10/2022, dated October, 13, 2022 on Repatriation of Assigned Capital by FRBs/Lloyd’s India (Circular) has permitted Foreign Reinsurance Branches (FRBs) and Lloyd’s India to repatriate excess assigned capital.

To ensure sufficient reinsurance capacity in India, to attract more reinsurance players for offering reinsurance at a competitive price and to enable free movement of assigned capital for foreign reinsurance branches, it has been decided that FRBs and Lloyd’s India may be permitted to repatriate excess assigned capital with prior approval of IRDAI subject to fulfilment of conditions as prescribed.

The summary of the conditions as prescribed by IRDAI are as follows:-

• The request to repatriate the assigned capital shall be submitted by the Foreign Reinsurer, who is engaged in reinsurance business through a branch established in India along with the reasons for such request;
• A certificate from the Foreign Reinsurer stating that the Reinsurer has Net Owned Funds of INR five thousand crores (Rs. 5000crs) or such amount as prescribed under Sec 6 (2) of the Insurance Act,1938, as per the last audited balance sheet;
• Minimum assigned capital shall be Rs 100 crore or such higher sum as specified by IRDAI at the time of grant of certificate of registration net of provisions as per regulations.
• Solvency ratio after the repatriation is at least 50 bps higher than the control level of solvency i.e. 200% as specified by the Authority;
• Such withdrawal shall not exceed 20% of assigned capital of such FRB/Lloyd’s India as at the end of last financial year;
• One request in a Financial year can be made by the Foreign Reinsurer;
• A certificate from certifying Actuary to the effect that sufficient reserves are made to meet the reinsurance liabilities;
• A certificate from practicing Chartered Accountant/Cost Accountant that the request does not include the repatriation of surplus as per sub regulation 11 of Reg. 28 of IRDAI (Registration and operations of branch offices of FRB other than Lloyd’s) Regulations, 2015 and sub regulation 10 of Reg. 50 of IRDAI (Lloyd’s India) Regulations, 2016;
• A certificate from practicing Chartered Accountant/Company Secretary on compliance with the FEMA requirements, RBI circulars, tax laws and applicable regulatory framework.

Source category: IRDAI

Attachments

• /2022/104_2022-10-26_Repatriation_of_Assigned_Capital_by_FRBs_Lloyd’s_India.pdf