Indian insurance companies are restricted from freely arranging their reinsurance due to the regulation on reinsurance that allows them to offer reinsurance arrangement to overseas reinsurers overseas only when if Indian insurance companies cannot arrange reinsurance or they lack the capacity. Japanese insurers are suffering from this added regulation, which is a extra heavy burden on practicing their day to day business. Japan would like to know the prospect of amendment of this regulation.
Reply: According to the reinsurance regulations, Indian insurance companies can place surplus over and above the domestic reinsurance arrangements class wise with any of the reinsurers rated at least BBB subject to a limit of 10% of the total reinsurance premium ceded outside India being placed with any one reinsurer. Further the regulations state that every insurer shall offer an opportunity to other Indian insurers including the Indian Reinsurer to participate in its facultative and treaty surpluses before placement of such cessions outside India. The aforesaid regulations are minimal. They are in good balance between the insurer's reinsurance protection requirements and to optimize retention in the country.
