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The IRDAI has decided to allow the auto-renewal of File Reference Numbers (FRNs) of cross-border reinsurers (CBRs) by insurers provided the reinsurers meet specified criteria.
An insurer dealing with CBRs has to ensure that the latter meet, inter alia, rating requirements and have FRNs before it places any business with them. At present, such FRNs are allotted on an annual basis by the Authority.
The IRDAI made the change, which took effect on 3 January 2023, after considering feedback and inputs from the Task Force on Non-life Insurers and Reinsurers and the Working Group on Ease of Doing Business.
The Authority has issued a new set of guidelines that are aimed at streamlining the regulatory process concerning CBRs and superseding previous guidelines.
Allotment of FRNs to CBRs
Application for new FRNs
CBRs, which meet the eligibility criteria as per the extant regulations, will qualify as ‘Eligible CBRs’. The CBRs, which do not meet the eligibility criteria, are regarded as ‘Non-Eligible CBR’.
Insurers, which wish to place reinsurance business with CBRs, shall file an online application with the Authority for the allotment of FRNs to CBRs under the category of either ‘Eligible CBR’ or ‘Non-Eligible CBR’.
After examination of submissions made by the insurer, the Authority allots a system-generated FRN to the CBR.
The filing of an application by an insurer for an allotment of FRNs to CBRs shall be commensurate with the reinsurance programme of the insurer.
Application for FRN renewal
An insurer can generate FRNs on its own for the CBRs which qualify for auto-renewal. The auto-renewal facility is available for three consecutive financial years for a CBR. After three financial years, a fresh application has to be submitted by the insurer through the CBR portal.
The CBRs, which do not qualify for FRN auto-renewal shall have to obtain FRNs on annual basis.
The insurer shall table all the reinsurance business placements made with the ‘Non-Eligible’ CBRs before its board of directors for its approval/ratification, and shall file within 15 days the certified copy of such a resolution with the Authority.
