Page 58 - Insurance Times September 2023

Circular

IRDAI Corner

Revamped landscape for reinsurance mar- the broader goal of positioning India as a global reinsurance
hub. By working in tandem with the International Financial
ket
Services Centres Authority (IFSCA), IRDAI aims to cultivate
24.08.2023 an environment conducive to the growth of reinsurance ac-
tivities, both within and outside the conventional Indian
In a significant move aimed at promoting a favorable busi- market. The regulatory framework for IIOs has been aligned
ness environment and attracting more reinsurers to estab- with IFSCA regulations with the intent to remove dual com-
lish operations in India, the Insurance Regulatory and Devel- pliance, thereby promoting a seamless integration of these
opment Authority of India (IRDAI) recently approved a series entities into the larger financial ecosystem. The revised
of amendments to the Reinsurance Regulations during its Order of Preference for IIOs, coupled with simplified regu-
123rd Authority Meeting. The overarching objective of these lations and improved placement alongside FRBs, fosters a
amendments is to harmonize and streamline the existing
more competitive environment.
regulations that apply to Indian insurers, Indian reinsurers,
Foreign Reinsurance Branches (FRBs), and International Finan- In conclusion, the amendments introduced by IRDAI repre-
cial Services Centre Insurance Offices (IIOs). This comprehen- sent a significant leap forward in the Indian reinsurance
landscape. By simplifying regulations, enhancing competi-
sive regulatory overhaul is strategically designed to position
India as a prominent global reinsurance hub. tiveness, and aligning with global financial services trends,
these changes signal regulatory intent to establish India as
The key focus areas of these amendments revolve around a leading global reinsurance hub. As the amendments take
several crucial aspects. Firstly, there is a concerted effort effect and the reinsurance market in India evolves, the in-
to increase the overall capacity of the reinsurance sector, surance sector is poised to witness accelerated growth, in-
which can help accommodate growing demand and man- creased international recognition, and a more robust eco-
age larger risks. Additionally, these amendments seek to system overall.
enhance technical expertise within the industry, fostering
an environment of excellence and innovation. Another vital Caution to General Public on un-registered
aspect is the reduction of the compliance burden on vari-
ous entities operating in the sector, allowing them to navi- entity by name Surety Seven providing
gate the regulatory landscape more efficiently. Surety Insurance
Several noteworthy changes have been made in this regard.
22.08.2023
The minimum capital requirement for FRBs has been low-
ered from Rs. 100 Crore to Rs. 50 Crore, with the provision IRDAI would like to bring to general notice that no regis-
to repatriate any excess assigned capital. The order of pref- tration has been granted to “Surety Seven” for undertaking
erence, previously spanning six levels, has been streamlined Surety insurance business or solicitation of Surety insurance
to four levels. The format for reinsurance programs has been business.
simplified, and regulatory reporting requirements have been It has been brought to the notice of IRDAI that the said
rationalized for increased clarity and effectiveness.
entity by the name “Surety Seven” (having website address
A critical aspect of these amendments is their alignment with of www.surety007.com) is possibly soliciting Surety insurance

The Insurance Times September 2023 51