Sectoral regulator IRDAI has issued guidelines on International Financial Service Centre Insurance Offices (IIO), thus paving the way for insurers and reinsurers to establish facilities at IFSC Special Economic Zones.
“These guidelines aim to put in place the process of registration and operations of insurers, reinsurers in IFSC Special Economic Zones in alignment with the objectives of IFSC-SEZ,” the regulator said.
Under the Insurance Regulatory and Development Authority of India (Registration and Operations of International Financial Service Centre Insurance Offices) Guidelines, 2017, issued on December 21, IIO means a branch office, permitted by the regulator, to transact direct insurance business or reinsurance business.
The guidelines apply to both Indian and foreign insurers and reinsurers, registered as IIO with IRDAI, and permit them, subject to their complying with the rules, to transact direct insurance business or reinsurance business or both.
The sole objective of the IIO should be to exclusively carry on insurance or reinsurance business from an IFSC.
“The registered IIO may be permitted to transact direct insurance business within the IFSC, from other SEZs and from outside India,” the regulator said.
All the monetary transactions with respect to insurance or reinsurance business made by an IIO has to be in foreign currency and not in Indian rupees.
Permitted classes
The classes or subclasses of insurance business permitted at the registered IIO are life insurance; general insurance; health insurance and reinsurance.
The IIO would be allowed to transact direct life insurance business or direct general insurance business but not both or reinsurance business. The IIO, however, may be allowed to transact health insurance business as provided under extant Health Insurance Regulations notified by the Authority.
Indian insurers or reinsurers in continuous operation during the preceding five years from the year in which the application is made, are eligible to apply to set up IIO, while foreign insurers or reinsurers should be registered or licensed for transacting insurance or reinsurance business in the country of incorporation and been in continuous operation during the preceding five years, the guidelines said.
