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India Insurance Report - Series II 39

required to comply with and will thus help in the necessary distinction which needs to be drawn between
different entities. Currently, a majority of the IRDAI Regulations also apply for reinsurers because
reinsurers are considered as insurers. The “reinsurer” must be defined to mean a person who carries on
the reinsurance business. Whilst it is important to have the “insurance business” meaning life insurance
business, general insurance business, and health insurance business, it is equally important to have the
“reinsurance business” defined to mean life reinsurance business, general reinsurance business, and health
reinsurance business. Thus, reinsurer and reinsurance businesses merit a separate definition given the
different nature of business and regulatory requirements.

3.1.2. Inclusion of MGAs

The Managing General Agents (MGA) should be allowed to set up in India so as to enable them to
bring niche, unique and innovative products in the Indian market, thereby increasing penetration and
enhancing the underwriting knowledge and skill in India. ‘Managing General Agent’ or ‘MGA’ means:

3.1.2.1. A body corporate incorporated outside India that is authorized to undertake insurance or re-
insurance or both pursuant to a binding agreement with a Foreign Insurer or Foreign Reinsurer; or

3.1.2.2. A company incorporated under the Companies Act, 2013 that is authorized to undertake business of
insurance or re-insurance or both pursuant to a binding agreement with a Foreign Insurer or Foreign Reinsurer.

3.1.3. Reinsurance Council

A separate Reinsurance Council be formed to represent issues/concerns of Reinsurers/FRB’s /Lloyd’s
India. The current GI Council constitutes of GI and Stand-Alone Health Insurance Companies in addition
to the reinsurance representation and hence, the agendas taken up are more specific to the direct insurance
market and the challenges faced by the GI companies and are often not relevant to reinsurance companies.
This often leads to a conflict with the agenda of the reinsurance branches/ Lloyd’s and the reinsurance
industry in general. Hence, it is suggested to have a Reinsurers Forum as a separate Council. This will
enable reinsurers / FRB’s / Lloyd’s to have a better representation of the topics to be discussed and make
an external representation to various other Statutory Bodies, including ease of resolution of all queries.
The separate reinsurance council will help to discuss international reinsurance practices for the development
of the insurance sector in India. The Reinsurance Council can also act as a platform to promote and
represent the Indian Reinsurance industry to the international audience.