The IRDAI has formed two task forces to study issues the non-life insurance and life insurance industries face in reinsurance support. The two have to give reports in three weeks.
Reinsurance support refers to insurance companies transferring a part of the risk they underwrite to other firms. The task force for the non-life insurance industry has nine members and it will be headed by Bhargav Dasgupta, MD&CEO, ICICI Lombard General Insurance.
The terms for reference for the task force include issues discussed by the industry players with Irdai in the recently concluded bi-monthly meeting with the top honchos of the general insurance companies.
Among the major issues raised were commissions under the obligatory cession do not reflect industry cost structure and profit commission methodology, cession cap on cross-border reinsurers, domestic treaty participation for insurers, reinsurance support on social insurance schemes such as Pradhan Mantri Suraksha Bima Yojana, and others, introductions of emerging risk transfer solutions, and faster settlement and payment digital mechanism (exchange) among the reinsurers and cross border insurers, among others.
For the life insurance industry, a seven-member task force has been constituted under the chairmanship of Naveen Tahilyani, MD&CEO, TATA AIA Life Insurance.
The terms of reference for the task force include studying issues such as stabilisaiton of reinsurance rates, concerns with respect to delay in quotes by reinsurers, capacity constraints per life with reinsurers, provision of facultative reinsurance support, securitization of mortality risk, and reinsurance support for social insurance schemes such as Pradhan Mantri Jeevan Jyoti Bima Yojana among others.