Insurance Company In GIFT City, IFSC

Global Overview:

The 19th century witnessed the growth and diversification of insurance products. Life insurance became more prevalent, and mutual insurance companies began to emerge.
In the early 20th century, governments started to regulate insurance companies to ensure their financial stability and protect policyholders. This led to the establishment of insurance regulatory bodies in many countries. Insurance companies expanded globally, offering a wide range of products, including life insurance, health insurance, and various forms of property and casualty insurance.
The 21st century brought further technological advancements, including the use of artificial intelligence, blockchain, and digital platforms. Insurtech companies emerged to innovate and streamline various aspects of the insurance process.
In recent years, there has been a growing emphasis on sustainability and social responsibility within the insurance industry, with companies incorporating practices with  environmental, social, and governance (ESG) principles into their business

Insurance company in India:

The first insurance company in India was Oriental Life Insurance Company, established in Kolkata in 1818. It primarily catered to the needs of the European community living in India.
In the early 2000s, the Indian government initiated economic reforms, including liberalization of the insurance sector. The Insurance Regulatory and Development Authority of India (IRDAI) was established in 2000 to regulate and supervise both life and non-life insurance companies.

Who will fall under the definition of applicant under IIO:

Applicant’ means –

(i) an ‘insurer’ registered with the Insurance Regulatory and Development Authority of India under section 3 of the Insurance Act, 1938 (4 of 1938),

(ii) a Foreign Insurer or Foreign Re-insurer;

(iii) a Society of Lloyd’s on behalf of Members of Lloyd’s;

(iv) a ‘Branch Office of foreign insurer’ or ‘Lloyd’s India’ registered by the IRDAI;

(v) a public company or a wholly owned subsidiary of an insurer or a Re-insurer which is formed and registered under the Companies Act, 2013;

(vi) an insurance co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912) or under any other law for the time being in force in any State relating to co-operative societies or under the Multi-State Cooperative Societies Act, 1984 (51 of 1984);

(vii) a body corporate incorporated under the law of any country outside India not being of the nature of a private company; or

(viii) a Managing General Agent who has a valid binding agreement with a Foreign Insurer or Foreign Re-insurer.
‘International Financial Service Centre Insurance Office’ or ‘IIO’ means a

financial institution under clause (c) of sub-section (1) of Section 3 of the Act that is registered with the Authority to undertake permissible activities under these Regulations.

Regulatory Requirement:

1.What are the modes of setting up presence in an IFSC?

There are two modes of establishing presence in an IFSC:
(1) In an incorporated form
(2) In an unincorporated form (i.e. place of business or branch form)

2.Eligibility Conditions for Registration:

(1) An Indian insurer or re-insurer, as the case may be, desirous of setting up a place of business in an unincorporated form in an IFSC, shall meet with the following requirements –

(a) the Applicant is duly registered with IRDAI for undertaking the business of insurance or re-insurance in India;

(b) The Applicant has been granted a No Objection Certificate by the IRDAI to set up place of business in an IFSC.

(c) the Board of the Applicant shall submit reporting structure of the officials as mentioned at sub-regulation (7) of regulation 17 of these Regulations;

(d) The Applicant has satisfactory track record in respect of regulatory and supervisory compliance;
(e) the Board of the Applicant undertakes to meet all liabilities arising out of IIOs insurance or re-insurance business, as the case may be;

(f) The Board of the Applicant undertakes to comply with the assigned capital, solvency and other requirements as may be specified by the Authority from time to time.
3.What activities are permitted to be carried on by an IIO?

As per Regulation 10 of IIO Regulations, subject to any specified conditions, an IIO registered with the Authority may carry any of the following class of businesses:

(a) Life Insurance Business;

(b) General Insurance Business;

(c) Health Insurance Business; or

(d) Re-insurance Business

However, an IIO set up in an unincorporated form in an IFSC shall be permitted to transact such class of business which is permitted to the Applicant by its home country regulatory or supervisory authority.

4.What are the capital requirements for an IIO in an incorporated form?

IIOs setting up in an incorporated form:
As per sub-regulation (3) of Regulation 17 of the IIO Regulations, minimum capital requirements as prescribed under sub-section (1) of section 6 of the Insurance Act, 1938 i.e.

(1) INR 100 crore (if carrying on the business of life or general insurance)

(2) INR 100 crore (if carrying on exclusively the business of health insurance)

(3) INR 200 crore (if carrying on the business of re-insurance)
However, an MGA or a service company incorporating in IFSC will be required to have a minimum paid up capital of INR 5 lakh as per clause 6(1) of schedule II and clause 1(1) of schedule III of IIO Regulations.
IIOs setting up in an unincorporated form:

As per sub-regulation (1) of Regulation 17 of the IIO Regulations, minimum assigned capital in any freely convertible foreign currency equivalent to USD 1.5 million, provided that such assigned capital shall be –

(1) earmarked and held by the Applicant in the home country, country of its incorporation or domicile

(2) invested as per the requirements of its home country regulatory or supervisory authority;

(3) maintained by the Applicant at all times during the subsistence and validity of registration of IIO

5.How many personnel need to be appointed for operations of an IIO?

IIOs setting up in an unincorporated form:
As per sub-regulation (7) of Regulation 17 of the IIO Regulations, minimum three (03) officers need to be appointed –

(1) Principal Officer who shall be responsible for the day-to-day administration of the IIO as well as for its regulatory compliances

(2) An Officer in-charge of underwriting of risk having relevant experience

(3) An officer in-charge of finance and accounts having relevant experience
IIOs setting up in an incorporated form:
As per sub-regulation (8) of Regulation 17 of the IIO Regulations, minimum three (03) Key Managerial Persons (KMP) need to be appointed who shall be responsible for the day-today administration and regulatory compliance of the IIO:
(1) Chief Executive Officer
(2) Chief Finance Officer
(3) Chief Underwriting Officer
However, the Authority may specify appointment of additional KMPs from time to time Office

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