Page 56 - Insurance Times October 2023

Further, progress made by insurance industry and strategies 123rd Authority Meeting. The overarching objective of these
to accelerate State Insurance Plan (SIP) were also discussed amendments is to harmonize and streamline the existing
in detail. SIP is a major enabler in reaching the last mile regulations that apply to Indian insurers, Indian reinsurers,
wherein states/UTs have been assigned to insurers with an Foreign Reinsurance Branches (FRBs), and International Finan-
objective of expanding access to insurance across the length cial Services Centre Insurance Offices (IIOs). This comprehen-
and breadth of the state. sive regulatory overhaul is strategically designed to position
India as a prominent global reinsurance hub.
The progress made towards implementation of Risk Based
Capital Framework (RBC), Risk Based Supervision Framework The key focus areas of these amendments revolve around
(RBSF) and International Financial Reporting Standards (IFRS) several crucial aspects. Firstly, there is a concerted effort
was also discussed. It was highlighted that first Quantita- to increase the overall capacity of the reinsurance sector,
tive Impact Study (QIS-1) under RBC has already been rolled which can help accommodate growing demand and man-
out and first pilot exercise under RBSF has also been com- age larger risks. Additionally, these amendments seek to
menced. The glide path outlined for adoption of IFRS to be enhance technical expertise within the industry, fostering
implemented after notification of the standard was also an environment of excellence and innovation. Another vital
briefed to the insurers. Strong enthusiasm and commitment aspect is the reduction of the compliance burden on vari-
was displayed by the industry for transitioning into a future ous entities operating in the sector, allowing them to navi-
ready, principle based architecture. gate the regulatory landscape more efficiently.
Emphasis was also placed on ensuring Availability, Accessi- Several noteworthy changes have been made in this regard.
bility and Affordability of insurance. In this context, detailed The minimum capital requirement for FRBs has been low-
deliberations were carried out to understand the various ered from Rs. 100 Crore to Rs. 50 Crore, with the provision
types of products needed to cater the dynamic requirements to repatriate any excess assigned capital. The order of pref-
and importance of increasing the geographical presence of erence, previously spanning six levels, has been streamlined
insurance companies & enhancing the distribution strate- to four levels. The format for reinsurance programs has been
gies to increase accessibility, thus moving towards the mis- simplified, and regulatory reporting requirements have been
sion of Insurance for All. rationalized for increased clarity and effectiveness.
The CEOs of Micro Finance Institutions Network (MFIN) and A critical aspect of these amendments is their alignment with
Sa-Dhan, the SelfRegulatory Organizations registered with the broader goal of positioning India as a global reinsurance
Reserve Bank of India (RBI) also interacted with the insur- hub. By working in tandem with the International Financial
ance industry offering perspective on financial inclusion, Services Centres Authority (IFSCA), IRDAI aims to cultivate an
micro insurance and focused on synergies that can be shared environment conducive to the growth of reinsurance activi-
between the wide network of MFIs, NBFC, SFBs, etc. and ties, both within and outside the conventional Indian market.
insurance industry. They also threw light upon the market The regulatory framework for IIOs has been aligned with
they cater to and the ways in which insurers can harness it IFSCA regulations with the intent to remove dual compli-
to increase insurance penetration in the country. ance, thereby promoting a seamless integration of these
The meeting reaffirmed the collective commitment of the entities into the larger financial ecosystem. The revised
insurance and reinsurance sector to advancing the industry's Order of Preference for IIOs, coupled with simplified regu-
standards, promoting innovation, and ensuring that insur- lations and improved placement alongside FRBs, fosters a
ance remains a vital tool for risk mitigation and financial more competitive environment.
security. In conclusion, the amendments introduced by IRDAI repre-

sent a significant leap forward in the Indian reinsurance
Revamped landscape for reinsurance mar- landscape. By simplifying regulations, enhancing competi-
ket tiveness, and aligning with global financial services trends,
these changes signal regulatory intent to establish India as
24.08.2023 a leading global reinsurance hub. As the amendments take

In a significant move aimed at promoting a favorable busi- effect and the reinsurance market in India evolves, the in-
ness environment and attracting more reinsurers to estab- surance sector is poised to witness accelerated growth, in-
lish operations in India, the Insurance Regulatory and Devel- creased international recognition, and a more robust eco-
opment Authority of India (IRDAI) recently approved a series system overall.
of amendments to the Reinsurance Regulations during its

52 October 2023 The Insurance Times