**Executive Summary**
The Insurance Regulatory and Development Authority of India (IRDAI) has notified the "Obligatory Cession for the financial year 2026-27." Applicable from April 1, 2026, to March 31, 2027, the notification mandates that general insurers cede 4% of their sum insured to the General Insurance Corporation of India (GIC Re). The document details specific commission structures and profit-sharing arrangements between ceding insurers and the Indian re-insurer.
**Key Points / Main Content**
**Applicability and Cession Percentage**
* **Target Entities:** The notification applies to all Indian re-insurers and other applicable insurers under the Insurance Act, 1938.
* **Mandatory Rate:** A 4% cession of the sum insured on every General Insurance Policy must be reinsured with GIC Re for the 2026-27 financial year.
* **Exclusions:** Terrorism premium and premiums ceded to the Nuclear pool are exempt from this requirement (set at ‘NIL’).
* **Designated Re-insurer:** The entire obligatory cession must be placed exclusively with the General Insurance Corporation of India (GIC Re).
**Terms and Conditions of Cession**
* **Sum Insured Limits:** There is no upper limit on the sum insured applicable for cessions made during the specified period.
* **Reporting Requirements:** Ceding insurers must provide immediate notice of underwriting information to the re-insurer if a cession exceeds limits specified by the re-insurer.
**Commission Structure**
* **Motor TP and Oil & Energy:** Minimum 5% commission.
* **Group Health Insurance:** Minimum 10% commission.
* **Crop Insurance:** Minimum 7.50% commission.
* **Aviation Insurance:** Average terms.
* **Other Classes:** Minimum 15% commission for all other insurance business.
* **Mutual Agreements:** Insurers and re-insurers may mutually agree on commission rates above these minimums.
**Profit Commission Sharing**
* **Sharing Ratio:** Profits are shared between the Indian re-insurer and the ceding insurer on a 50:50 basis.
* **Calculation Factors:** The surplus is determined after factoring in incurred loss percentage (calculated over three financial years), management expenses at 2%, profit at 5%, and commission at 12.5%.
**Impact Analysis**
**Ceding Insurers (General Insurance Companies)**
**Impact**
They are legally required to cede 4% of their general insurance business to GIC Re, affecting their risk retention and premium income. They are entitled to minimum commissions based on the class of business and a 50% share of profit commissions.
**Action Required**
Insurers must align their reinsurance placements for FY 2026-27 to meet the 4% mandate and provide immediate notification to GIC Re for any cessions exceeding specified underwriting limits.
**Indian Re-insurer (GIC Re)**
**Impact**
As the designated recipient of the obligatory cession, GIC Re will manage the centralized 4% pool of all general insurance policies in India, excluding specific pools. They are responsible for paying commissions and sharing performance-based surpluses.
**Action Required**
GIC Re must specify underwriting limits for notification purposes and establish the framework to calculate and distribute profit commissions on a 50:50 basis after the three-year loss calculation period.
Key Entities Referenced
Insurance Regulatory and Development Authority of India (IRDAI): The primary regulatory body that issued the notification and oversees the insurance sector in India.
Insurance Act, 1938: The principal legislation (specifically Sections 101A and 101B) under which the powers for mandating reinsurance cessions are exercised.
General Insurance Corporation of India (GIC Re): The designated Indian re-insurer with whom the entire 4% obligatory cession for the financial year 2026-27 must be placed.
Obligatory Cession for the financial year 2026-27: The specific policy initiative mandating a 4% reinsurance cession on general insurance policies to Indian re-insurers.
रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
सी.जी.-टी.एxलx.x-GअID.H-1x6xx0 42026-271854
CG-TLxx-xEG-1ID6E0x4x2x0 26-271854
असाधारण
EXTRAORDINARY
भाग III—खण् ड 4
PART III—Section 4
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
स.ं 261] िई कदल्ली, सोमिार, अप्रैल 13, 2026/चत्रै 23, 1948
No. 261] NEW DELHI, MONDAY, APRIL 13, 2026/CHAITRA 23, 1948
भारतीय बीमा जिजियामक और जिकास प्राजधकरण
अजधसचू िा
हदै राबाद, 9 अप्रलै , 2026
फा. स.ं भा.बी.जि.जि.प्रा./आरआई/ 3/217/2026.— बीमा अजधजियम, 1938 की धारा 101ए की उप-धारा (2)
एिं (4) द्वारा प्रदत्त िजियों का प्रयोग करत े हुए, प्राजधकरण, बीमा अजधजियम, 1938 की धारा 101बी के अधीि गठित
सलाहकार सजमजत के साथ परामिश करि े के बाद और केन्द्र सरकार के पूिश-अिुमोदि स े जिम्नजलजखत अजधसूचिा अथाशत्--
“जित्तीय िर्श 2026-27 के जलए अजििायश अध्यपणश ” िारी करता ह।ै
1. प्रयोज्यतााः यह अजधसूचिा बीमा अजधजियम, 1938 की धारा 101ए के उपबंध के अिुसार भारतीय पुिबीमाकताशओं
और अन्द्य प्रयोज्य बीमाकताशओं पर लाग ूहोगी।
2. अध्यपणश का प्रजतिताः भारतीय पुिबीमाकताश(ओं) के पास पुिबीमा की िािेिाली प्रत्येक साधारण बीमा पाजलसी
पर बीजमत राजि का प्रजतित अध्यपणश 1 अप्रलै 2026 स े प्रारंभ होिेिाल े 31 माचश 2027 तक के जित्तीय िर् श के
दौराि संबद्ध ककये िािेिाले बीमे के संबंध में 4% (चार प्रजतित) होगा। आतंकिाद प्रीजमयम ,िाजभकीय समूह
2680 GI/2026 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]
(न्द्यूजललयर पलू ) और अपिर्ितश क्षत्रे हते ु मरीि कागो पलू को अध्यर्पशत प्रीजमयम इसके अपिाद होंगे, जििमें यह
`िून्द्य‘ ककया िाएगा। कुल अजििायश अध्यपणश केिल भारतीय साधारण बीमा जिगम (िीआईसी रे) के पास ही रखा
िािा चाजहए।
3. ित ें :
क) अध्यपणश के बारे म ेंसचू िााः
i. बीजमत राजि की कोई भी सीमा 1 अप्रलै 2026 से 31 माचश 2027 तक की अिजध के दौराि ककये गय े
अध्यपणश ों के जलए लाग ूिहीं होगी।
ii. उपयुशि को ध्याि में रखते हुए भारतीय पुिबीमाकताश अध्यपशक बीमाकताश से अपेक्षा कर सकता ह ैकक
िह भारतीय पुिबीमाकताश द्वारा जिजिर्दशष्ट राजि से अजधक ककसी भी अध्यपशण की िोजखम-अंकि
सूचिा की िािकारी तत्काल द।े िब भी अध्यपणश ऐसी जिजिर्दशष्ट सीमाओं से अजधक हो िाता ह ै तब
हर समय अध्यपशक बीमाकताश भारतीय पुिबीमाकताश को सूजचत करेगा।
ख) कमीििाः
व्यिसाय की जिजभन्न श्रेजणयों के जलए अजििायश अध्यपणश पर कमीिि का प्रजतित जिम्नािुसार होगााः
i. मोटर टीपी तथा तले और ऊिाश बीमा के जलए न्द्यूितम 5%।
ii. सामूजहक स्ट्िास्ट््य बीमा के जलए न्द्यूितम 10%।
iii. फ़सल बीमा के जलए न्द्यिू तम 7.50%।
iv. जिमािि बीमा के जलए औसत ितें।
v. बीमा व्यिसाय की सभी अन्द्य श्रेजणयों के जलए न्द्यिू तम 15%।
उपयुशि स े अजधक कमीिि भारतीय पुिबीमाकताश(ओं) और अध्यपशक बीमाकताश के बीच पारस्ट्पठरक तौर पर
सहमत रूप में हो सकता ह।ै
ग) लाभ कमीििाः
भारतीय पुिबीमाकताश जिम्नजलजखत के फैलटररंग के बाद कायशजिष्पादि और अध्यपशक बीमाकताश के कुल अजििाय श
संजिभाग के आजधलय के आधार पर अध्यपशक बीमाकताश के साथ 50 : 50 आधार पर लाभ कमीिि का साझा करेगा।
i. उपगत हाजि % (3 जित्तीय िर्ों के अंत में गणिा करिी चाजहए)
ii. 2% प्रबंधि व्यय।
iii. 5% लाभ।
iv. 12.5% कमीिि।
ए. आर. जित्यािथं म, कायशकारी जिदेिक
[जिज्ञापि-III/4/असा./30/2026-27][भाग III—खण् ड 4] भारत का रािपत्र : असाधारण 3
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA
NOTIFICATION
Hyderabad, the 9th April, 2026
F. No. IRDAI/RI/ 3/217/2026.—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 2026-27”.
1. Applicability: This notification shall be applicable to Indian Re-insurers and other applicable insurers as per the
provisions 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 4% (four percent) in respect of insurance attaching during the
financial year beginning from 1st April, 2026 to 31st March, 2027, except the terrorism premium and premium
ceded to Nuclear pool wherein it would be made ‘NIL’. The entire Obligatory Cession is to be placed with General
Insurance Corporation of India (GIC Re) only.
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,
2026 to 31st March, 2027.
ii) In view of the above, the Indian Re-insurer 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 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 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 12.5%.
A. R. NITHIYANANTHAM, Executive Director
[ADVT.-III/4/Exty./30/2026-27]
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.