IFSCA (Re-Insurance) Regulations, 2023

International Financial Services Centers Authority (IFSCA) vide its notification in the Official Gazette dated April 13, 2023 has issued IFSCA (Re-insurance) Regulations, 2023 with a view to provide framework for oversight and control of inward and outward arrangement of re-insurance business by the International Financial Service Centre Insurance Offices (IIOs).

The key highlights of the Regulations are as follows:

• Re-insurance strategy and Re-insurance Programme:
• IIO shall develop and document Re-insurance Strategy and Re-insurance Programme (‘RSRP’) forming an integral part of IIO’s overall underwriting strategy and risk management philosophy.
• RSRP shall be approved by the Board of the IIO within the timelines as may be specified by the Authority .
• In case of an IIO in an unincorporated form, its Parent entity shall provide details of RSRP designed for the IIO.
• RSRP shall be submitted to the Authority, as and when directed by it.
• Contracts classified as Re-insurance contract shall:
• meet risk transfer requirements for particular accounting year.
• protect ceding insurer from negative financial impacts arising from the underlying insurance business ceded.
• IIO shall formulate a segment-wise retention policy duly approved by its Board and shall comply with minimum retention requirements as may be specified by the Authority.
• IIO prior to placing of re-insurance business (cession or retrocession) with foreign insurers or foreign re-insurers, shall ensure that:
• such foreign insurer or foreign re-insurer and its promoters, partners or controlling shareholders are not from the jurisdiction identified in the public statement of Financial Action Task Force as deficient from AML perspective.
• such foreign insurer or foreign re-insurer is duly authorised by its home country regulatory or supervisory authority to transact re-insurance business during the immediate past three continuous years.
• the home country of such foreign insurer or foreign re-insurer has signed Double Taxation Avoidance Agreement (DTAA) with India.
• IIO may initiate the proposal for formation of Insurance pool and submit the same to Authority for its approval.
• The proposed regulation also specifies Reporting requirement pertaining to inward and outward re-insurance arrangements.
• On and from the commencement of these regulations: IRDAI (Re-insurance) Regulations, 2018, Guidelines or Circulars issued thereunder shall cease to apply in International Financial Services Centres. IIO shall comply with the additional requirements as prescribed within three months or within such extended period as may be specified by the Authority.

Source category: IFSC Insurance Office

Attachments

• /2023/187_IFSCA_(Re-insurance)_Regulations_2023_(1).pdf