According to industry reports, foreign reinsurance companies operating in India are likely to call on the Insurance Regulatory and Development Authority of India (IRDAI) to ensure their local branches are treated on par with domestic reinsurers.
The IRDAI announced last week in an exposure draft on reinsurance regulation, that Indian reinsurers will continue to get order of preference for placing business.
This is something that has previously been criticised by foreign players that have entered the market since amendments in the insurance laws in 2015 through the Insurance Act (Amendment), enabled foreign reinsurers to establish branches in India.
But according to an article on moneycontrol.com, foreign reinsurers are likely to ask for on par treatment with domestic reinsurers, with the current order of preference in reinsurance cessions being General Insurance Corporation of India (GIC Re), then other Indian reinsurers, followed by branches of foreign reinsurers and then Cross Border Reinsurers (CBRs).
Moneycontrol reports that a senior executive of a global reinsurer that has an India branch licence, said; “We would want to get clarity on the preference rule by the regulator. The idea that we are mooting is to support competitive market practices and treat all players equally and give them an equal opportunity to source business.”