Page 10 - Insurance Times February 2023

Insurers get IRDAI nod for administration process and delay in re-insurance business placements made
generation of FRN, explained Sharad with the 'Non-Eligible' CBRs before its
FRN auto-renewal of cross-
Mathur, Managing Director & CEO, Board of Directors for their approval /
border reinsurers Universal Sompo General Insurance. ratification and shall file within fifteen
In order to conduct reinsurance ar- Further, IRDAI has introduced amend- days the certified copy of such resolu-
rangements with Global reinsurers, ment as "The Insurer shall place all the tion with the Authority.
which do not have an office in India
(called "Cross border Reinsurers or
Insurance sector needs Rs. 50000 crore each year;
CBR"), the IRDAI (Reinsurance) Regu-
lations 2018 specifies the terms and Insurers need to plough back profit: Panda
conditions. India's insurance industry will need to infuse Rs 50,000 crore of capital every
One of the requirements under the old year in order to double penetration in the country, IRDAIchairman Debasish
guidelines was the allotment of File Panda said.
Reference Number (FRN) for every CBR He also implored corporate conglomerates and investors to consider invest-
by IRDAI, which has validity period of
ing in the sector.
year after which the FRN has to be re-
"If we have to double the penetration, every year there is need to infuse an
newed.
additional Rs 50,000 crore. Some of it will come from the existing players
After considering the feedback and also
itself by way of ploughing back their profits, some of it will come as an addi-
inputs from the Task Force on Non-life
tional capital. After March, I intend to meet the chairpersons of all the insur-
Insurers and Reinsurers and the Work-
ance companies to drive home the point that they have to factor this and
ing group on ease of doing business, the
start planning to infuse more capital. I'm glad some players have already
regulator has decided to consider Auto-
started around that," Panda said while addressing at the CII organised Insur-
renewal of FRNs by the Insurer itself.
ance and Pensions Summit.
According to experts, FRN is an impor-
Panda said India is set to become the sixth largest insurance market by 2032
tant tool for CBRs as it helps in ensuring
from tenth largest currently but the country needs more investments if it has
accurate and efficient tracking and
to achieve the insurance for all target set by the regulator by 2047.
management of reinsurance contracts
"I will like to reach out to the conglomerates who are present in this country.
and claims, and supports regulatory
compliance. Individual investors who are interested to invest their money. If you look at
return on equity on the top 5 companies it is 20% and 16% on an average for
The amendments shall facilitate the in-
non life and 14% for life insurance," Panda said.
surer for generating the FRN for quali-
fied CBR on their own for consecutive He also urged insurance companies to look at new opportunities and new
coverages for insurance, the penetration of which are very low.
three years, which will minimise the
The Insurance Times January 2023 9