The revised Insurance Regulatory and Development Authority of India (IRDAI) re/insurance regulatory framework will be revealed by the end of February 2018, after regulators finalise any adjustments based on stakeholders’ feedback.
Moneycontrol reported that IRDAI Chairman TS Vijayan said regulators are “looking at the stakeholders’ responses.”
He added “there could be some changes there.”
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 Insurance Regulatory and Development Authority of India (IRDAI) had previously announced in an exposure draft on reinsurance regulation that Indian reinsurers will continue to get order of preference for placing business, but the legislation will be waived for a number of major insurance lines.
First preference would be given to Indian reinsurers who have been transacting business for at least three continuous years and then other Indian reinsurers.
Next in line in for Indian reinsurance placements are branches of foreign reinsurers and then Cross Border Reinsurers (CBRs).
The draft proposes to waive preference of order for sectors such as aviation, life insurance, marine hull, large infrastructure projects, petrochemical and refinery plants, large power plants, oil and energy, cyber risk and climate change risk.
The IRDAI Chairman commented that several foreign players have significantly increased their stake in local insurers, and that four to five firms have applied for an India license.
He highlighted that overall interest in the Indian market, particularly on the non-life and health front, remains high.
At the special welcome address at the opening session of the 11th India Rendezvous in Mumbai, Alice Vaidyan, Chairman-cum-Managing Director of GIC Re, India’s sole state-run reinsurer, commented on the expansion of foreign firms in the Indian insurance industry in 2017; “New reinsurers entering India provide additional capacity in the Indian market and bring with them international expertise.
“Cedants get access to new and innovative products. All these advantages have the potential to accelerate increase in insurance penetration in India,” Asia Insurance Review reported.
G Srinivasan, Chairman-cum-Managing Director of New India Assurance Company, said government-led initiatives, including the Prime Minister’s Jan Dhan Yojana, Pradhan Mantri Suraksha Beema Yojana had added 618 million people to government-sponsored schemes throughout 2016-2017.
In addition to government initiatives, re/insurance growth in India has been driven by the country’s booming economy.
In his Industry Keynote Address at the Mumbai event Christian Delannes, Chief Financial Officer (CFO) of SCOR, Global P&C, commented on the region’s attractive growth opportunities, with the Indian insurance industry seeing a 20% growth rate; “The market profitability (and its underwriting) is totally driven by buoyant investment returns which more than offset technical losses with combined ratios consistently above 110%.”
With India seen as one of the most attractive opportunities for re/insurers, the global re/insurance market will be eager to hone in on any changes in the regulatory regime that allow foreign firms with greater access to the up-and-coming India market.