Regulatory Framework for Managing General Agents in IFSC

OVERVIEW


  • The International Financial Services Centres Authority (IFSCA), through its press release dated May 11, 2026, announced that it had approved the draft IFSCA (Managing General Agents) Regulations, 2026 (“MGA Regulations”) during its 28th Authority meeting held on April 17, 2026.
  • The proposed MGA Regulations seek to establish a comprehensive regulatory framework governing the registration, regulation, and functioning of MGAs operating in IFSC.

  • These MGAs would operate under delegated authority from the foreign insurer(s) for underwriting direct insurance business or settlement of claims, ensuring they operate with transparency and accountability to protect policyholders’ interests and support the orderly growth and development of the insurance ecosystem in the IFSC.

ELIGIBILITY CRITERIA


  • The proposed framework permits the establishment of Managing General Agents (“MGAs”) in the IFSC either in incorporated form or as branch offices. Incorporated MGAs are required to be established as companies under the Companies Act, 2013.
  • For branch MGAs, the eligibility criteria, inter alia, include valid registration and a No Objection Certificate (“NOC”) from the home regulator. Further, the applicant’s home jurisdiction must have a DTAA with India and be FATF compliant.
  • Further, foreign insurers proposing to enter into binding auhtority agreements with MGAs must, inter alia, possess a valid registeration from their home regulator, maintain net worth of USD 100 million, and hold a minimum credit rating of “A.

SCOPE OF BUSINESS

 
  • Upon registration, MGAs will be permitted to undertake direct insurance business within the IFSC and outside India.
  • Direct insurance business in DTA India shall be subject to Section 2CB of the Insurance Act, 1938. Further, such business shall be conducted only in specified foreign currencies.

CAPITAL AND NET WORTH REQUIREMENT 


  • For all MGAs, the minimum capital requirement has been prescribed at USD 5,00,000, which is required to be maintained with an IFSC Banking Unit (“IBU”).
  • The investment in an MGA must be made solely from own funds and remain unencumbered.
  • The minimum net worth requirement has been specified as USD 250,000 or 50% of the minimum capital requirement, whichever is higher.
  • However, MGAs operating in branch form shall be permitted to maintain the prescribed net worth at the parent entity level.

OTHER PROVISIONS 

  • Binding Authority Agreement (BAA) between Foreign Insurer and MGA
  • Insurer-wise Fiduciary Accounts and Premium Segregation
  • Duties of foreign insurer(s) to conduct independent annual audit, on-site review etc.
  • Financial Security and Deposit Requirements
  • Board Approved Policy on comparison and distribution of insurance products
  • Code of conduct for MGAs
  • Professional Indemnity Insurance requirement
  • Maintenance of books of accounts and records
 

CONCLUSION 


  • The proposed MGA Regulations are expected to significantly strengthen the insurance ecosystem within GIFT City by creating a dedicated and globally aligned regulatory framework for Managing General Agents.
  • The framework is likely to attract reputed foreign insurers and insurance intermediaries to establish operations in the IFSC.
  • By allowing MGAs to conduct direct insurance business in foreign currencies through both incorporated and branch structures, the regulations are expected to enhance ease of doing business and boost foreign participation.

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