A new law in favor of local reinsurers

The Insurance Regulatory and Development Authority of India (IRDAI) has proposed to amend a law on reinsurance. The text under consideration is intended to require Indian insurers to cede in priority most of their facultative or surplus treaties to the state-owned reinsurer GIC Re.

The current law gives parity to all parties, insurers, local reinsurers and foreign reinsurers in choosing their investments with 50% of minimum retention to GIC Re and 30% for foreign reinsurers.

This is the third amendment made this year in favor of the public reinsurer to ensure maximum treaties’ retention in the Indian territory.

The draft bill will be subject to approval by the parties concerned by December 15, 2015.