**Executive Summary**
This document from the Insurance Regulatory and Development Authority of India (IRDAI) details the obligatory cession for the financial year 2025-26. It specifies that Indian Re-insurers must reinsure 4% of the sum insured on each General Insurance Policy with the General Insurance Corporation of India (GIC Re) from April 1, 2025, to March 31, 2026. The notification outlines terms and conditions, including notification of information on cession, commission rates for different classes of business, and profit commission sharing.
**Key Points / Main Content**
* **Applicability**
* Applies to Indian Re-insurers and other applicable insurers as per Section 101A of the Insurance Act, 1938.
* **Percentage of Cession**
* 4% of the sum insured on each General Insurance Policy is to be reinsured with Indian Re-insurers.
* This applies to insurance policies attaching during the financial year from April 1, 2025, to March 31, 2026.
* Exceptions: Terrorism premium and premium ceded to the Nuclear pool (cession will be 'NIL').
* The entire obligatory cession is to be placed with the General Insurance Corporation of India (GIC Re) only.
* **Terms & Conditions**
* **Information on Cession**
* No limit on the sum insured is applicable for cessions made during the period from April 1, 2025, to March 31, 2026.
* Indian Re-insurer may require the ceding insurer to provide immediate notice of underwriting information if any cession exceeds an amount specified by the former.
* The ceding insurer shall inform the Indian Re-insurer whenever the cession exceeds specified limits.
* **Commission Rates**
* 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 these rates can be mutually agreed between Indian Re-insurers and the ceding insurer.
* **Profit Commission**
* Indian Re-insurer shall share profit commission on a 50:50 basis with the ceding insurer, based on the performance and surplus of the total obligatory portfolio. Factoring following:
* Incurred loss % (to be worked at the end of 3 financial years).
* Management Expenses at 2%.
* Profit at 5%.
* Commission at 12.5%.
**Impact Analysis**
**Stakeholder: Indian Re-insurers**
* **Impact**
* Obligated to reinsure 4% of the sum insured on each General Insurance Policy with GIC Re.
* Must provide information on cession exceeding specified limits to ceding insurers.
* Eligible for commission on obligatory cession based on defined rates for different business classes.
* Will share profit commission with ceding insurers on a 50:50 basis, factoring specific parameters.
* **Action Required**
* Implement the obligatory cession requirement from April 1, 2025, to March 31, 2026.
* Inform ceding insurers regarding the threshold for providing immediate underwriting information.
* Establish mechanisms for calculating and sharing profit commission with ceding insurers.
**Stakeholder: Ceding Insurers**
* **Impact**
* Required to cede 4% of the sum insured on each General Insurance Policy to Indian Re-insurers (GIC Re).
* Must provide immediate notice of underwriting information for cessions exceeding specified amounts.
* Eligible to receive commission based on defined rates for different classes of business.
* Will share profit commission with the Indian Re-insurer on a 50:50 basis.
* **Action Required**
* Cede 4% of the sum insured to Indian Re-insurers as required.
* Establish processes to provide immediate notice of underwriting information for applicable cessions.
* Track performance to determine profit commission eligibility.
Key Entities Referenced
Insurance Act, 1938: The primary law governing insurance in India, specifically Section 101A related to obligatory cessions.
Indian Re-insurer: Indian Re-insurers are the main entity to which the obligatory cession applies.
Insurance Regulatory and Development Authority of India (IRDAI): The regulator issuing the notification regarding obligatory cessions.
Obligatory Cession: Mandatory reinsurance percentage that insurers must cede to Indian Re-insurers.
General Insurance Corporation of India (GIC Re): The entity with whom entire obligatory cession must be placed.
रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
सी.जी.-टी.एल.-अ.-28022025-261337
xxxGIDHxxx
CG-TL-E-28022025-261337
xxxGIDExxx
असाधारण
EXTRAORDINARY
भाग III—खण् ड 4
PART III—Section 4
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
स.ं 141] िई कदल्ली, बृहस्ट्प जतिार, फरिरी 27, 2025/फाल्ग िु 8, 1946
No. 141] NEW DELHI, THURSDAY, FEBRUARY 27, 2025/PHALGUNA 8, 1946
भारतीय बीमा जिजियामक और जिकास प्राजधकरण
अजधसचू िा
हदै राबाद, 24 फ़रिरी, 2025
फा.स.ं भा.बी.जि.जि.प्रा./आरआई/ 6/213/2025 — 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 परामि श करि े के बाद और केन्द्र सरकार के पूिश-अिुमोदि से जिम्नजलजखत अजधसूचिा
अथाशत-् - “जित्तीय िर्श 2025-26 के जलए अजििायश अध्यपशण” िा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 2025 से प्रारंभ होिेिाले 31 माचश 2026 तक के
जित्तीय िर्श के दौराि संबद्ध ककये िािेिाले बीमे के संबंध म ें 4% (चार प्रजतित) होगा। आतंकिाद प्रीजमयम
,िाजभकीय समूह (न्द्यूजललयर पूल) और अपिर्िशत क्षत्रे हते ु मरीि कागो पलू को अध्यर्पतश प्रीजमयम इसके
अपिाद होंग,े जििमें यह `िून्द्य‘ ककया िाएगा। कुल अजििायश अध्यपणश केिल भारतीय साधारण बीमा जिगम
(िीआईसी रे) के पास ही रखा िािा चाजहए।
1425 GI/2025 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]
3. ित ें :
क) अध्यपणश के बारे म ेंसचू िााः
i. बीजमत राजि की कोई भी सीमा 1 अप्रैल 2025 से 31 माच श 2026 तक की अिजध के दौराि ककये गय े
अध्यपणश ों के जलए लाग ूिहीं होगी।
ii. उपयुशि को ध्याि में रखत े हुए भारतीय पुिबीमाकताश अध्यपशक बीमाकताश से अपेक्षा कर सकता ह ै कक
िह भारतीय पुिबीमाकताश द्वारा जिजिर्दशष्ट राजि से अजधक ककसी भी अध्यपशण की िोजखम-अकं ि
सूचिा की िािकारी तत्काल दे। िब भी अध्यपशण ऐसी जिजिर्दशष्ट सीमाओं से अजधक हो िाता ह ै
तब हर समय अध्यपशक बीमाकताश भारतीय पिु बीमाकताश 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 से अजधक कमीिि भारतीय पिु बीमाकताश(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
अजििायश 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।
देबािीर् पण्डा, अध्यक्ष
[जिज्ञापि-III/4/असा./997/2024-25]
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA
NOTIFICATION
Hyderabad, the 24th February, 2025
F. No IRDAI/RI/6/213/2025.— 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 2025-26”.
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.[भाग III—खण् ड 4] भारत का रािपत्र : असाधारण 3
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, 2025 to 31st March, 2026, 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 2025 to 31st March, 2026.
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%.
DEBASISH PANDA, Chairperson
[ADVT.-III/4/Exty./997/2024-25]
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.