Hyderabad:
The insurance regulator IRDAI has once again constituated a top level panel to review the set of existing reinsurance norms.
The committee will be headed byTR Alamelu, member, nonlife, IRDAI and would suggest amendments to reinsurance, investment, foreign reinsurance branches(FRBs) and Lloyd’s India regulations in the next two months.
The IRDAI wants to have re-look into the the set of regulations, circulars and guidelines issued earlier, said a circular on Friday.
“The authority had issued regulations on Re-insurance, Foreign Re-insurance Branches and Lloyd’s India. Subsequent to the issue of these regulations, the insurers have made representations through the General Insurance Council for clarifications, applicability of certain provisions of the Regulations/Guidelines/Circulars as would be applicable to Indian Re-Insurers, FRBs and Lloyd’s India.
Some of the members of the panel are Suresh Mathur, executive director,reinsurance, IRDAI, Satish Raju, CEO, Swiss Re , India, N Gowri Shankar Gargiparthy, CEO, Lloyd’s India, M Santhana Gopalan, former CEO, SCOR.
The review will cover following aspects:
–applicability of certain provisions of the Insurance Act, 1938 on investments, IRDAI (Investment ) Regulations,
-calculation of economic capital and related disclosures,
-applicability of corporate governance guidelines.
– appointment of key management persons
IRDAI had earlier set up a high level committee in March 2017 under its former member M Ramprasad to carry out a comprehensive review of the existing framework for reinsurance activities including reporting requirements for the various entities.
The committee had studied international regulatory framework and practices relating to Reinsurance Pools, Alternative Risk Transfer (ART) and such other mechanisms and make appropriate recommendations for India, study the existing guidelines for SEZ and make necessary recommendations in the context of various reinsurance activities.
On the basis of the Ramprasad panel recommendation, IRDAI had retained the prime clause of ‘Order of preference’ that gives power of ‘right to refusal’ to state-owned reinsurer GIC Re with regard to the non-life business.The revised norms had defined that any non-life players who want to buy reinsurance cover has to first get quotes from all the Indian reinsurers including GIC Re and four other Indian reinsurers including the foreign reinsurers who are having branch operations in the country.
However, the private sector reinsures have damnaded that GIC Re shouldn't be given such advantages.
Currently, state owned GIC Re and 10 global reinsurers, who have set up their branch offices in 2017, are operating in India.
During 2018-19, the private sector reinsurers led by Munich Re had mobilised a total net premium of Rs 9,444 crore while GIC Re had earned a net premium of Rs 30,900 crore.