Executive Summary:
This notification pertains to the obligatory cession for the financial year 2018-19. It outlines the applicability, percentage of cession, and terms and conditions for Indian Reinsurers and other applicable insurers, as per Section 101A of the Insurance Act, 1938. The notification is effective for insurance attaching from April 1, 2018, to March 31, 2019.
Key Points / Main Content:
Applicability:
* Applies to Indian Reinsurers and other applicable insurers as per Section 101A of the Insurance Act, 1938.
Percentage of Cession:
* 5% of the sum insured on each General Insurance Policy must be reinsured with Indian Reinsurers.
* Apportionment of obligatory cession for FY 2018-19 will be at 5:0 between General Insurance Corporation of India and ITI Reinsurance Ltd., respectively.
Terms and Conditions:
* Notice of information on cession: No limit on sum insured applicable for cessions made during the period from April 1, 2018, to March 31, 2019.
* Ceding insurers must provide immediate notice of underwriting information for any cession exceeding an amount specified by the Indian Reinsurers.
* Commission:
* Minimum 5% for Motor TP and Oil Energy insurance.
* Minimum 10% for Group Health insurance.
* Minimum 7.50% for Crop Insurance.
* Average Terms for Aviation insurance.
* Minimum 15% for all other classes of insurance business.
* Commission over and above can be mutually agreed upon.
* Profit Commission:
* Indian reinsurers shall share the profit commission on a 50:50 basis.
* Based on performance and surplus of the total obligatory portfolio.
* Incurred loss to be worked at the end of 3 financial years.
* Management Expenses at 2%.
* Profit at 5%.
* Commission at 15%.
* Loss ratio at 50% to 78%.
* No profit commission if the loss ratio exceeds 78%.
* Profit commission shall not exceed 14%.
Impact Analysis:
Indian Reinsurers:
* Impact: They will receive a mandatory 5% cession of the sum insured on each General Insurance Policy. They must specify an amount above which ceding insurers must provide immediate underwriting information. They must also share profit commission with the ceding insurer.
* Action Required: Define the amount above which ceding insurers must provide immediate underwriting information. Prepare to share profit commission as specified.
Other Applicable Insurers (Ceding Insurers):
* Impact: They must reinsure 5% of the sum insured on each General Insurance Policy with Indian Reinsurers. They must provide immediate notice of underwriting information for any cession exceeding an amount specified by the Indian Reinsurers. They will also receive commission and potentially profit commission.
* Action Required: Ensure that 5% of the sum insured on each General Insurance Policy is ceded to Indian Reinsurers. Be prepared to provide immediate underwriting information for cessions exceeding the specified amount. Track performance and surplus of the total obligatory portfolio.
Key Entities Referenced
Insurance Act, 1938: A law governing the insurance sector in India, cited as the basis for the notification's powers.
Insurance Regulatory and Development Authority of India: The regulatory body issuing the notification concerning obligatory cession.
Hyderabad, Telangana: The location from which the notification was issued.
Financial Year 2018-19: The financial year to which the obligatory cession rules apply.
Indian Reinsurers: Entities to which the obligatory cession applies; they receive a portion of the insurance risk.
General Insurance Corporation of India: One of the entities to which the obligatory cession is apportioned.
ITI Reinsurance Ltd: One of the entities to which the obligatory cession is apportioned.
Obligatory Cession: The core subject of the notification, referring to the mandatory reinsurance of a percentage of insurance policies.
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EXTRAORDINARY
Hkkx III—[k.M 4
PART III—Section 4
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PUBLISHED BY AUTHORITY
la- 15] ubZ fnYyh] बबबबुुधधुुधधokj] tuojh 16] 2019@ikS"k 26] 1940
No. 15] NEW DELHI, WEDNESDAY, JANUARY 16, 2019/PAUSHA 26, 1940
भभभभााााररररततततीीीीयययय बबबबीीीीममममाााा ििििववववििििननननययययााााममममकककक औऔऔऔरररर ििििववववककककाााासससस (cid:1)(cid:1)(cid:1)(cid:1)ााााििििधधधधककककररररणणणण
अअअअििििधधधधससससचचूूचचूू ननननाााा
हदै राबाद, 10 जनवरी, 2019
ििििवववव(cid:9)(cid:9)(cid:9)(cid:9)तत तत ीीीीयययय ववववषषषष (cid:15)(cid:15) (cid:15)(cid:15)2222000011118888----11119999 ककककेेेे ििििललललएएएए अअअअििििननननववववाााायययय (cid:15)(cid:15) (cid:15)(cid:15)अअअअ(cid:21)(cid:21)(cid:21)(cid:21)यय यय पपपप(cid:15)ण(cid:15)ण(cid:15)ण(cid:15)ण
फफफफाााा.... सससस..ंं..ंं भभभभाााा....बबबबीीीी....ििििवववव....ििििवववव....(cid:1)(cid:1)(cid:1)(cid:1)ाााा....////आआआआररररआआआआईईईई////1111////111155552222////2222000011119999....————बीमा अिधिनयम, 1938 क(cid:2) धारा 101ए क(cid:2) उप-धारा (2) एव ं(4)
(cid:3)ारा (cid:6)द(cid:8) शि(cid:11)य(cid:13) का (cid:6)योग करत े (cid:16)ए, (cid:6)ािधकरण, बीमा अिधिनयम, 1938 क(cid:2) धारा 101बी के अधीन ग(cid:20)ठत सलाहकार
सिमित के साथ परामश (cid:25) करन े के बाद और के(cid:27)(cid:28) सरकार के पूव(cid:25)-अनमु ोदन से िन िलिखत अिधसूचना अथा(cid:25)त ् –
"िव(cid:8)ीय वष(cid:25) 2018-19 के िलए अिनवाय (cid:25)अ(यप(cid:25)ण" जारी करता ह।ै
1111.... (cid:1)(cid:1)(cid:1)(cid:1)ययययोोोो(cid:24)(cid:24)(cid:24)(cid:24)ययययततततााााःःःः यह अिधसूचना बीमा अिधिनयम,1938 क(cid:2) धारा 101ए के (cid:6)ावधान के अनुसार भारतीय पुनब3माकता (cid:25)
और अ(cid:27)य (cid:6)यो5य बीमा कंपिनय(cid:13) पर लागू होगी।
2222.... अअअअ(cid:21)(cid:21)(cid:21)(cid:21)ययययपपपपणण(cid:15)(cid:15)णण(cid:15)(cid:15) ककककाााा (cid:1)(cid:1)(cid:1)(cid:1)ििििततततशशशशततततःःःः भारतीय पुनब3माकता((cid:25) 9) के पास पुनब3मा क(cid:2) जानेवाली (cid:6):यके साधारण बीमा पॉिलसी पर
बीिमत रािश का (cid:6)ितशत अ(यप(cid:25)ण 1 अ(cid:6)ैल 2018 स े (cid:6)ारंभ होन े वाल े 31 माच (cid:25) 2019 तक के िव(cid:8)ीय वष(cid:25) के दौरान
संब= >कय े जान े वाल े बीम े के संबंध म ? 5% होगा। िव(cid:8)ीय वष(cid:25) 2018-19 के िलए अिनवाय(cid:25) अ(यप(cid:25)ण का (cid:6)भाजन
भारतीय साधारण बीमा िनगम और आईटीआई पुनब3मा िलिमटेड के बीच Aमशः 5% और 0% पर होगा।
3333.... शशशशतततत (cid:27)(cid:27)(cid:27)(cid:27)::::
कककक) अअअअ(cid:21)(cid:21)(cid:21)(cid:21)ययययपपपपणण(cid:15)(cid:15)णण(cid:15)(cid:15) ककककेेेे बबबबााााररररेेेे मममम (cid:30)(cid:30)(cid:30)(cid:30)ससससचचूूचचूू ननननाााा::::
i. बीिमत रािश क(cid:2) कोई भी सीमा 1 अ(cid:6)ैल 2018 स े 31 माच (cid:25) 2019 तक क(cid:2) अविध के दौरान >कय े गये
अ(यप(cid:25)ण(cid:13) के िलए लागू नहC होगी।
ii. उपयु(cid:25)(cid:11) को (यान म ? रखते (cid:16)ए भारतीय पुनब3माकता (cid:25) अ(यप(cid:25)क बीमाकता (cid:25) स े अपेEा कर सकता ह ै (कर
सकत े ह)F >क वह भारतीय पुनब3माकता((cid:25) 9) (cid:3)ारा िविनGदH रािश से अिधक >कसी भी अ(यप(cid:25)ण क(cid:2)
333 GI/2019 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC. 4]
जोिखम-अंकन सूचना क(cid:2) जानकारी त:काल द।े जब भी अ(यप(cid:25)ण ऐसी िविनGदH सीमा9 स ेअिधक हो
जाता ह ैतब हर समय अ(यप(cid:25)क बीमाकता (cid:25)भारतीय पुनब3माकता((cid:25) 9) को सिू चत करेगा।
खखखख) ककककममममीीीीशशशशननननःःःः
Iवसाय क(cid:2) िविभJ Kेिणय(cid:13) के िलए अिनवाय (cid:25)अ(यप(cid:25)ण पर कमीशन का (cid:6)ितशत िन ानुसार होगाः
i. मोटर टीपी तथा तेल और ऊजा (cid:25)बीमा के िलए (cid:27)यूनतम 5%।
ii. सामिू हक MवाMNय बीमा के िलए (cid:27)यूनतम 10%।
iii. फसल बीमा के िलए (cid:27)यूनतम 7.5%।
iv. िवमानन बीमा के िलए औसत शतO।
v. बीमा Iवसाय क(cid:2) सभी अ(cid:27)य Kेिणय(cid:13) के िलए (cid:27)यूनतम 15%।
उपयु(cid:25)(cid:11) स ेअिधक कमीशन भारतीय पुनब3माकता((cid:25) 9) और अ(यप(cid:25)क बीमाकता (cid:25) के बीच पारMप(cid:20)रक तौर पर सहमत
Pप म ?हो सकता ह।ै
गगगग) ललललााााभभभभ ककककममममीीीीशशशशननननःःःः
भारतीय पुनब3माकता (cid:25)िन िलिखत के फैRटTरग के बाद कायि(cid:25) नUपादन और अ(यप(cid:25)क बीमाकता (cid:25) के कुल अिनवाय (cid:25)
संिवभाग के आिधRय के आधार पर अ(यप(cid:25)क बीमाकता (cid:25) के साथ 50% : 50% आधार पर लाभ कमीशन का
साझा करेगा/ कर?गे।
i. उपगत हािन % (3 िव(cid:8)ीय वषW के अंत म ?गणना करनी चािहए)
ii. 2% (cid:6)बंधन Iय।
iii. 5% लाभ।
iv. 15% कमीशन।
v. 50% स े78% तक हािन अनुपात।
कोई लाभ कमीशन दये नहC ह ै य>द हािन अनुपात 78% स े अिधक हो। लाभ कमीशन 14% स े अिधक नहC
होगा।
डॉ. सभु ाष सी. खुं(cid:20)टआ, अ(यE
[िवXापन-III/4/असा./491/18]
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA
NOTIFICATION
Hyderabad, the 10th January, 2019
Obligatory Cession for the financial year 2018-19
F. No. IRDAI/RI/1/152/2019.—In exercise of the powers conferred by Sub-section (2) and (4) of the
Section 101A of the Insurance Act, 1938, the Authority, after consultation with the Advisory Committee,
constituted under section 101B of the Insurance Act, 1938 and with the previous approval of the Central
Government, hereby makes the following notification namely: - “Obligatory Cession for the financial year
2018-19”.
1. Applicability: This notification shall be applicable to Indian Re-insurers and other applicable insurers as
per the provision of Section 101A of the Insurance Act, 1938.
2. 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 1st April, 2018 to 31st March, 2019. Apportionment of obligatory cession¹Hkkx IIIµ[k.M 4º Hkkjr dk jkti=k % vlk/kj.k 3
for the FY 2018-19 will be at 5% and 0% between General Insurance Corporation of India and ITI
Reinsurance Ltd. respectively.
3. Terms & Conditions:
a) Notice of information on cession:
i. There would be no limit on sum insured applicable for the cessions made during the period from
1st April, 2018 to 31st March, 2019.
ii. In view of the above, 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. The ceding insurer shall inform the Indian Re-insurer(s) at all times whenever the
cession exceeds such specified limits.
b) Commission:
Percentage of commission on obligatory cession for different classes of business shall be as follows:
i. Minimum 5% for Motor TP and Oil & Energy insurance.
ii. Minimum 10% for Group Health insurance.
iii. Minimum 7.50% for Crop Insurance.
iv. Average Terms for Aviation insurance.
v. Minimum 15% for all other classes of insurance business.
Commission over and above, can be as mutually agreed between Indian Re-insurer(s) and the ceding
insurer.
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 the following:
i. Incurred loss % (to be worked at the end of 3 financial years).
ii. Management Expenses at 2%.
iii. Profit at 5%.
iv. Commission at 15%.
v. Loss ratio at 50% to 78%.
No profit commission is payable if the loss ratio exceeds 78%. Profit commission shall not exceed
14%.
Dr. SUBHASH C. KHUNTIA, Chairman
[ADVT.-III/4/Exty./491/18]
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.