IRDAI issues Notification regarding Obligatory Cession for the Financial Year 2018-19

Jan 18, 2019 | by Avantis RegTech Legal Research Team


The Insurance Regulatory and Development Authority of India (IRDAI) on January 10, 2019 has made the notification “Obligatory Cession for the financial year 2018-19”.

·         Applicability: The notification shall be applicable to Indian Re-insurers and other applicable insurers.

·         Percentage of Cession:

The percentage cession of the sum insured on each General Insurance Policy to be reinsured with the Indian Re-insurer(s) shall be 5% in respect of insurance attaching during the financial year beginning from April 01, 2018 to March 31, 2019. Apportionment of obligatory cession for the FY 2018-19 will be at 5% and 0% between General Insurance Corporation of India and ITI Reinsurance Ltd. respectively.     

·         Terms & Conditions:

a)      Notice of information on cession:

There would be no limit on sum insured applicable for the cessions made during the period from April 01, 2018 to March 31, 2019. The Indian Re-insurer(s) may require the ceding insurer to give immediate notice of underwriting information of any cession exceeding an amount as specified by the former.

b)      Commission:

For different classes of business there is certain percentage of commission on obligatory cession.

c)       Profit Commission:

The Indian re-insurer(s) shall share the profit commission, on 50%:50% basis, with the ceding insurer based on the performance and surplus of the total obligatory portfolio of the ceding insurer, after factoring certain issues.

 [Notification F. No. IRDAI/RI/1/152/2019]

 

URL: http://www.egazette.nic.in/WriteReadData/2019/195448.pdf  


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