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Current issues in General Insurance Reinsurance – Regulations and Opportunities

3 July 2015

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Disclaimer

► Our understanding is that India is looking to develop itself as an international (re)insurance center besides, having SEZ as a (re) insurance hub, seeking to attract (re) insurers to underwrite both onshore and offshore business

► There’s also an objective to promote Ease of Doing Business in line with the International Best Practices

► India is also looking ensure that it benchmarks with the other Hubs – Hong Kong, Singapore and also with Dubai International Financial Centre

► The following comments are therefore to accommodate these objectives rather than to cater to any external entity

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Regulations for Registration and Operations of Branch Offices of Foreign Reinsurers (excluding Lloyd’s) ► Procedure for registration

► Requisition for registration application

► Eligibility norms

► Consideration of requisition for registration application

► Application for registration and its consideration

► Conditions governing the registration of branches of foreign reinsurers

► Manner of computation of annual fee

► Operational issues pertaining to Branch offices of foreign reinsurer

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Regulations for Registration and Operations of Branch Offices of Foreign Reinsurers (excluding Lloyd’s) ► Operational issues pertaining to Branch offices of foreign

reinsurer

– Geographical Scope

– Appointment of Chief Executive Officer and Key Management Personnel

– Outsourcing

– Accounting and Investments

– Reinsurance and Retrocession

– Order of preference for cessions by Indian Insurers

– Repatriation of surplus

– Delegated authorities

– Supervision and Control

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IRDAI (IFSC) Guidelines 2015

► Reinsurance Business

– Eligibility Criteria

– Application and consideration for registration

– Scope of Operations

– Assigned Capital

► Direct insurance Business in SEZ

► Terms, conditions and requirements of Certification of Registration

► Applicability of the provisions of Insurance Act, 1938

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Building a successful (re)insurance hub: Lessons from Dubai and Singapore ► Dubai and Singapore are the undisputed reinsurance centers for Middle East

and Emerging Asia

► It’s a consequence of acute foresight and careful economic engineering

► Ingredients of a reinsurance hub

– Economic and political stability

– Quality of local legislation and regulation

– Ease of Doing Business

– Cosmopolitan environment

– Availability (importability) of highly skilled finance professionals

– Adequate education and training facilities

– Competitive tax environment

– Convenient geographical location

► Available capacity for mainline and niche segments

► Cluster of services – specialized lawyers, Loss adjusters, Risk Engineers, forensic Accountants and HR Consultants etc.

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DIFC – A purposefully built free zone

► DIFC offers its member companies major benefits

– Full foreign ownership

– Zero tax rate

– No restrictions on capital convertibility

– No restrictions on profit repatriation

– Cluster of reinsurers, Lloyd’s cover holders, MGAs and other specialized service providers

► The Free Zone has its own independent regulator: DFSA

– Committed to risk and principles based approach

– Offers independent common law judiciary with jurisdictions over civil and commercial disputes

► Cluster of 18 (re) insurers, 37 intermediaries and 16 specialized services

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Singapore – a nation wide regulatory framework

► The (re)insurance hub of Singapore offers a common, nation-wide legal and regulatory framework for both onshore and offshore business

► Singapore has become world’s most competitive economy

– English common law system

– Sophisticated regulatory environment

– Competitive tax rules (10% corporate tax for offshore business)

– Superior quality of living and a deep talent pool

– Removal of foreign ownership limits and Risk Based Capital framework

– Singapore has 78 direct insurers, 31 reinsurers, 64 captives, and 73 Brokers – operators regulated through SIF & OIF

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►Thank You