IRDAI frames guidelines for insurance firms to set up offices in financial service SEZs

The country’s insurance regulator has cleared the way for setting up of IFSC (International Financial Services Centre) Insurance Offices (IIOs).

With this, the Insurance Regulatory and Development Authority of India (IRDAI) has put in place the process of registration and operation of insurers and re-insurers in IFSC Special Economic Zones, in alignment with the objectives of IFSC-SEZ.

Insurers and re-insurers from India and abroad are eligible to apply for registration to set up IIOs, subject to certain norms.

As per the IRDAI (Registration and Operations of IIOs) Guidelines, 2017, no person or entity shall commence or undertake insurance or reinsurance business from an IFSC without obtaining prior registration as an IIO from the Authority.

“The sole object of an IIO, on being registered with the Authority, shall be to exclusively carry on insurance or reinsurance business from an IFSC. An IIO shall not engage itself in any business other than those permitted by the Authority,” the regulator said.

The registered IIO may be permitted to transact direct insurance business within the IFSC, from other SEZs and from outside India.

In the case of reinsurance business, the IIO may accept reinsurance business from within the IFSC, from other SEZs and from outside India.

It may also accept reinsurance business from insurers operating in the Domestic Tariff Area in accordance with the order of preference for cession, as per the existing norms.

IIOs may be registered for carrying on business in various classes/sub-classes of life, general, or health insurance as also reinsurance businesses.

The applicant should demonstrate a minimum assigned capital of ₹10 crore. In case the applicant is a Foreign Direct Insurer, the applicant company shall possess paid-up equity capital as per existing provisions.