The Insurance Regulatory and Development Authority of India (IRDAI
) has given its approval to a total of 11 cross border reinsurers (CBR) for the financial year 2019-20. This marks a decline from the corresponding figures for last year when 16 approvals were granted. The 11 entities that have been given permission include Republican Unitary Enterprise-Belarusian National Reinsurance Organization, Nepal Re, East Africa Re, CICA Re and PICC Re.
Who are cross border insurers?
The term Cross Border Reinsurers (CBR) refers to those reinsurers who do not have a footprint in India but they do business with Indian insurance or reinsurance companies. Reinsurance is the risk cover taken by insurance companies against the liability business they write.
The IRDAI approves a list of select CBRs every year who will be allowed to do business with insurance companies in India for that duration.
What is the criteria for selection?
As per the eligibility criteria, all CBRs must have a credit rating of at least BBB (with Standard & Poor) or an equivalent rating of any other international rating agency for five years. The past performance of these CBRs also needs to be satisfactory. The IRDAI also stipulates that the CBR shall be a legal entity in its homeland and will be regulated and supervised by its own authorities.
In other news
Meanwhile, the age of retirement of IRDAI
employees will continue to be 62, a source said. The regulator is believed to have sent a proposal to the government to raise the retirement age for employees from 62 to 65, in line with the standard practice at other regulatory bodies.