Rules and Regulations of General Insurance and Re Insurance

8/6/2019 Rules and Regulations of General Insurance and Re Insurance

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By: Ankur Datta

Deepika Dhawan

Mohammed Jesim


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ACT

AUTHORITY

CESSION

FACULTATIVE

INDIAN REINSURER

POOL

RETROCESSION

RETENTION

TREATY


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Guidelines to be followed by reinsurancebusiness:

y Maximize retention within country

y Develop adequate capacity

y Secure the protection of reinsurance cost incurred

y Simplify administration of business


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Every insurer shall cede a percentage of sum

assured of the insurance policies written inIndia to the Indian reinsurer.

The reinsurance programme of every insurershall commence from the beginning of everyfinancial year .

Every insurer shall submit to the Authority, hisreinsurance programmes for the forthcomingyear, 45 days before the commencement of thefinancial year.


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Within 30 days of the commencement of the

financial year , every insurer must submit to theauthority:

1) Photocopy of reinsurance treaty slip

2) Excess of loss cover note in that year

3) List of reinsurers and their shares in the reinsurancearrangement

y

The authority can call for further explanationsand can give certain directions.


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y Every Indian insurer must maintain maximumretention of its business with its financial

strength and businessvolume.

y Indian insurers can lace their reinsurance

business outside India only with thosereinsurers who from past five years is ratedatleast as BBB .

y Indian reinsurers shall maintain a domesticpool for reinsurance surplus in cases ofMARINE HULL and FIRE.


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y Surplus above the domestic reinsurancearrangements can be placed by the insurerindependently with any of the reinsurerscomplying to a limit of 10% of the totalreinsurance premium ceded outside Indiabeing placed with any one reinsurer.

y Howeververy insurer must give an opportunity

to other indian insurers and reinsurers beforeplacing such cessions outside india .


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y The Indian Reinsurer shall retrocede at least

50% of the obligatory cessions received by it tothe ceding insurers after protecting theportfolio by suitable excess of loss covers.Such retrocession shall be at original terms

plus an ov

er-riding commission to the IndianReinsurer not exceeding 2.5%. The retrocessionto each ceding insurer shall be in proportion toits cessions to the Indian Reinsurer.

y Every insurer has to submit to the authority itsstatistics related to reinsurance transactionsalong with annual accounts.


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INWARD REINSURANCE BUSINESS

Reinsurance business accepted byreinsurer or insurer as opposed to that

ceded to another insurer.


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OUTWARD REINSURANCE BUSINESS

Cessions in reinsurance , bycomparisons with inward reinsurance

which relates to acceptances.


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SECTION 64

Adv

ance payment of premium

1. the risk may be assumed not earlier than thedate on which the premium has been paid in

cash or by cheque to the insurer.2. Any refund of premium to the insured on

account of cancellation or any alterations inthe policy shall be payable by the insurer.

3. No insurer shall assume any risk until andunless premium is paid or is gauranteed to bepaid by the person


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SECTION 114

Power of Central Government to make rules.


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THANK YOUTHANK YOU

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Rules and Regulations of General Insurance and Re Insurance