IRDAI proposes revamp of reinsurance regulations


The IRDAI has revised an exposure draft on reinsurance business to harmonise the provisions of various regulations applicable to Indian insurers and Indian reinsurers including foreign reinsurance branches (FRBs) and Lloyd’s India, and to enhance the ease of doing business.

Some of the salient features of the revised draft Regulations are as follows:

Effective date

The Amended Regulations shall be applicable from 1 April 2023.

Minimum retention

Every Indian reinsurer and FRB shall maintain a minimum retention within India of 50% of Indian reinsurance business underwritten. Any retrocession to an IIO (International Financial Service Centre Insurance Office) up to 20% of Indian reinsurance business underwritten shall be reckoned towards the required minimum retention of 50%.

Reinsurance terms

Every cedant shall abide by the following provisions whilst seeking the best reinsurance terms:

A. Every cedant shall first obtain lead terms from at least three “Category 1” reinsurers. In the event a cedant has been unable to secure lead terms from three “Category 1” reinsurers, the cedant shall maintain on record the evidence of having approached all “Category 1” reinsurers.

B. No cedant shall seek terms from cross-border reinsurers (CBRs) or IIOs having a credit rating below ‘A-‘ from Standard & Poor or an equivalent credit rating from any other major International Rating Agency.

Category-1 reinsurers are Indian reinsurers, FRBs), including Lloyd’s India, and IIOs.

Other than for facultative reinsurance protection, no cedant shall seek terms from any Indian insurer that is not registered with the Authority exclusively to transact reinsurance business.

Cession limits

Reinsurance placements with CBRs by Indian insurers transacting other than life insurance business shall be subject to the following overall cession limits during a financial year.

Rating of the CBR as per

Standard & Poor or equivalent

Maximum overall cession limits

allowed per CBR

Greater than A+

Such amount as may be specified by the Authority from time to time or 30%, whichever is higher. [Currently: INR2bn ($24.5m)]

Greater than BBB+ and up to and including A+




Explanation: The above percentages are to be calculated on the total reinsurance premium ceded outside India to all CBRs.



The submission timeline for the final reinsurance programme to the Authority is increased from 30 days to 45 days from the commencement of the financial year.

Within 90 days from the commencement of the financial year, the insurer has to submit to the Authority a certification from its CEO confirming that all reinsurance treaty agreements associated with the reinsurance programme for the financial year have been received in original, duly stamped and signed, from all reinsurers.

The IRDAI released the first draft of the IRDAI (Re-insurance) Regulations, 2018 on 21 October 2022. Detailed consultations were held with the stakeholders on the draft. Based on the feedback received, the draft Regulations were modified and the IRDAI is seeking feedback on the current revised draft with the deadline set as 16 December 2022.

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