Irdai maintains 5% obligatory cession to GIC Re in FY21, fixes commission

Obligatory cession is the part of the business, or premium, that general insurers are required to cede on every policy sold to GIC Re

The insurance regulator has maintained the obligatory cession of each general insurance policy that is to be reinsured with an Indian reinsurer at 5 per cent for the financial year FY21.

“The percentage cession of the sum insured on each general insurance policy to be reinsured with the Indian re-insurer(s) shall be 5 per cent in respect of insurance attaching during the financial year beginning from 1st April, 2021 to 31st March, 2022, except the terrorism premium and premium ceded to Nuclear Pool, wherein it would be made ‘NIL’.

More importantly, the entire obligatory cession has to be reinsured with India’s largest