IRDAI may approve entry of foreign reinsurance companies
Reinsurance allows insurance companies to share their risk by purchasing policies from other insurers.
MUMBAI: Insurance Regulatory and Development Authority of India (IRDAI) is likely to give its final approval to global reinsurance firms planning to set up branches in India by January 2017. “We are speeding up the process and expect that some of the players will be able to begin the branch operations in January 2017,” said T.S. Vijayan, chairman, IRDAI while speaking on the sidelines of an insurance summit organised by Assocham.
Leading global reinsurance firms like Swiss Re from Switzerland, French major SCOR, Munich Re and Hannover from Germany have already received initial regulatory approval R1 from the regulator. Reinsurance allows insurance companies to share their risk by purchasing policies from other insurers. “About 5-6 companies have applied for license and I think by January 2017, there should be some players in this market. We will be taking a final decision in our next board meeting in October. After that, they will have to bring capital and start working at it,” he added.
Foreign insurers willing to operate in India through branches need to bring in a minimum capital of Rs 100 crore while those planning to establish a full fledged business are required to have a minimum capital of Rs 200 crore. The $2-billion Indian reinsurance market is dominated by state-run GIC Re, with over 50 per cent marketshare.