Page 24 - Insurance Times August 2020

limits for every product of each insurance segment o Past claim settlement experience shall be
along with corresponding retention limits in the satisfactory and shall comply with any other
previous year. requirement as IBRB mandates.
o The levels of retention ration on each insurance Y The order of preference to seek best terms shall be in
segment for the previous 3 financial years. the following order.
o Premium income for last financial year and o Myanma Insurance
projected premium income for forthcoming o Any other reinsurer and foreign reinsurer's
financial year for each product of each insurance branches (FRB) registered and licensed in
segment. Myanmar.

o Details of proportional & non-proportional o Cross Border Reinsurer (CBR)
arrangements for each insurance segment
Y Overall cession limits during financial year to CBR by the
including treaty capacity, retention limits, premium
cedants transacting other than life insurance unless
income, event limits etc.
exempted by IBRB shall be in following manner. Such
o Statement of reinsurance cost for projected year limits shall not exceed unless prior approval from IBRB.
along with actual costs of reinsurance, ceded
premium on proportional & non-proportional Rating of CBR by S&P and Maximum overall
arrangements and estimated cost of current equivalent rating agency cession allowed
financial year. Greater than A+ 50%

o 30 days after the end of financial year, insurer shall Greater than BBB+ & upto, 40%
submit the following reports including A+

Y Operations of reinsurance business in previous financial BBB & BBB+ 20%
year
Y Every insurer & reinsurers shall cede compulsory
Y Provisioning methods & amounts for each kind of maximum cession upto 10% on any insurance segment
reserves duly signed by certifying actuary. business to Myanma Insurance. However, any refusal
Y For catastrophic risk protection, every Myanmar by Myanma Insurance for such cession, the residual part
insurers of the risk may be insured with CBRs.
o Ensure adequate reinsurance arrangements Y Insurance Pool can be proposed by any insurers by
pertaining to catastrophic accumulations. submitting a proposal to IBRB. After examining various
o Insurance arrangements shall be based on aspects like objective, capacity, limits of liability IBRB
modelling report for forthcoming financial year duly may permit formation of domestic insurance pools.
approved by its Board of Directors or (CA, CFO and/ Formation of pools and selection of administrations shall
or CEO) and shall file with summary of catastrophe be as per the instructions of IBRB.
modeling report along with the reinsurance Y Non-compliance may attract penal provisions in
programme. accordance with Insurance Business Law and rules.

Y Cross Border Reinsurers (CBR) shall satisfy the following
criteria. Analysis
o It should be insurance or reinsurance entity in its
Burma was province of British run Indian state and has been
home country duly authorised by its home country separated from India in 1937. India and Myanmar share
regulator to transact reinsurance business during border of approx. 1600 Kilometers and maritime boundary
the immediate past three continuous years.
in Bay of Bengal. Relations of both countries stood the test
o Shall have credit rating of at least BBB form of time.
Standard & Poor or equivalent rating from an
international rating agency for immediate past The guidelines reflect the guiding philosophies based on
three continuous years. Indian Reinsurance regulations 2018 issued by Insurance
o Should have adequate solvency margins as Regulatory Development Authority of India (IRDAI). IRDAI
stipulated by home country regulator. in accordance with the provisions of Insurance Act 1938 &

24 The Insurance Times, August 2020