Stable outlook ratings a must for foreign reinsurers eyeing India branch: IRDAI

Insurance regulator stipulates that applicant should have minimum net owned fund of Rs 5,000 crore at any time

Insurance Regulatory and Development Authority of India (IRDAI) has said that foreign reinsurers wanting to set up branch offices in India should have a minimum credit rating which is atleast having stable outlook from any of the internationally renowned credit rating agencies for the last 5 years. 

In its draft norms on registration and operation of branch offices, IRDAI said that the applicant should have minimum net owned fund of Rs 5,000 crore at any time.

Apart from an in-principle clearance from the home country regulator at the time of filing the application, the applicant also should be registered in a national regulatory environment and with whom the Indian government has signed Double Taxation Avoidance Agreement. 

IRDAI will take a decision on the number of re-insurers that may be permitted to set-up branches in a year depending on the orderly growth of the insurance and reinsurance market, national interest, or other related aspects.

The regulator said that a branch office has to maintain a minimum retention of 30-50% of the Indian reinsurance business.