In order to conduct reinsurance arrangements with Global reinsurers, which do not have an office in India (called “Cross border Reinsurers or CBR”), the IRDAI (Reinsurance) Regulations 2018 specifies the terms and conditions.
One of the requirements under the old guidelines was the allotment of File Reference Number (FRN) for every CBR by IRDAI, which has validity period of year after which the FRN has to be renewed.
After considering the feedback and also inputs from the Task Force on Non-life Insurers and Reinsurers and the Working group on ease of doing business, the regulator has decided to consider Auto-renewal of FRNs by the Insurer itself.
According to experts, FRN is an important tool for CBRs as it helps in ensuring accurate and efficient tracking and management of reinsurance contracts and claims, and supports regulatory compliance.
The amendments shall facilitate the insurer for generating the FRN for qualified CBR on their own for consecutive three years, which will minimise the administration process and delay in generation of FRN, explained Sharad Mathur, Managing Director & CEO, Universal Sompo General Insurance.
Further, IRDAI has introduced amendment as “The Insurer shall place all the re-insurance business placements made with the ‘Non-Eligible’ CBRs before its Board of Directors for their approval /ratification and shall file within fifteen days the certified copy of such resolution with the Authority.
