However, GFIA would like to take this opportunity to express its concerns relating to the recently introduced “(Life Insurance-Reinsurance) Regulations, 2013”. In GFIA's view these regulations, in their current form, risk harming the development of the life (re)insurance industry in India and GFIA is concerned that they have been approved without a transparent public notification and consultation process.
GFIA would therefore strongly recommend the IRDA to return to its previous principles-based regulation on retention limits, which conformed with the supervisory approach adopted internationally.
GFIA would further recommend that when foreign reinsurance branches are permitted to operate in India, they should be permitted to invest funds outside of the country. Insurers should be able to determine their retention limits based on an overall risk assessment of their operations, taking into account factors such as their risk appetite, the distribution channel through which a particular risk is sold, and their underwriting and claims experience with specific classes of business. Such an approach would contribute to the development of the Indian insurance sector and encourage investors.
GFIA is committed to work with the IRDA in order to develop an appropriate (re)insurance framework. To this end, and given the lack of official public consultation to the “Life insurance-reinsurance regulations, 2013”, GFIA urges the IRDA to engage a diverse group of (re)insurers, including foreign-invested, in the IRDA group implementing these regulations.
In addition, GFIA would stand ready to discuss with IRDA this reinsurance regulation and others in future planned new insurance regulations.
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© GFIA - Global Federation of Insurance Associations
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