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The International Financial Service Centre Authority (IFSCA) has recently issued a circular in which it has allowed life insurance, general insurance, health insurance and re-insurance to set up their business in GIFT City’s IFSC.
This will help intermediaries sell insurance policies to NRIs and foreign nationals with less paper work. However, the IFSCA is yet to issue guidelines on finer details like minimum risk coverage and minimum ticket size.
insurers will have to apply with IFSCA as International Financial Service Centre Insurance Office (IIO) to obtain the license. These IIOs should be registered as place of business of Indian insurer or branch office of foreign insurer or re-insurer. The applicants should also be permitted to transact such class of business by their home country’s regulatory or supervisory authority.
The IIOs will require to follow certain guidelines issued by the authority. Some of the key regulations are:
- The IIO branch established in IFSC should comply with Net Owned Funds (NOF) requirement prescribed under the Insurance Act, 1938
- The entities should maintain a minimum assigned capital in any freely convertible foreign currency equivalent to USD 1.5 million
- Any entity seeking to do insurance business in IFSC should comply with paid-up equity capital requirements as prescribed under the Insurance Act, 1938
- The registered IIOs should also maintain a certain solvency margin, which is stipulated by its home country regulatory or supervisory authority
- The circular also says that the registered IIOs will have to commence business, for which it has been registered, within twelve (12) months from the date of grant of certificate of registration by the authority
- The registered entities will also have to appoint Key Managerial Persons (KMP) including chief executive officer, chief finance officer, chief underwriting officer and additional key managerial persons as may be specified by the authority from time to time