Circular No. IRDA/NL/ORD/RIN/136/08/2010, dated 24-8-2010
During the inspection of several broker and insurers, it was found that audit trial of many transactions with regard to reinsurance placements and coinsurance was very difficult to track. The trial started going cold after the money reaches the broker and cash flows to and from the reinsurer were not available for monitoring, either with the broker or the insurer. In this context, it is becoming difficult to verify the genuineness of the placements.
After detailed discussions with the experts in the reinsurance sector, it was felt that an electronic platform whereby the treaty, facultative as well as coinsurance placements are tracked by the Regulator as well as companies themselves, needs to be put in place.
In order to study the models existing in other markets and choose the right software & hardware and also to build consensus among the insurers and brokers with regard to the new system a Steering Committee with the following constitution is set up with immediate effect:
1. Chairman, IRDA – Chairman
2. Shri C N S Shastri – Co Chairman
3. Member, Non – Life – Member
4. Member, Life – Member
5. Member, Actuary – Member
6. CMD, GIC – Member
7. Executive Director, Admn – Member Convenor
The Terms of reference of the Committee are as follows:
a) to study various models of electronic transactions and settlement system in reinsurance and coinsurance
b) to develop a system suitable to Indian context
c) to select suitable hardware and software
d) to set up suitable organizational structure for implementation of the system
e) to operationalize the system in a period of six to nine months
In order to ensure that a detailed plan is worked out regarding the necessary accounting software & hardware details and the organizational set up for such a system, a Working Committee is hereby constituted with the following members:
1. Nominee of CMD, GIC
2. Nominee of CMD, LIC
3. Secretary General, Life Insurance Council
4. Secretary General, General Insurance Council
5. JD (Non Life)
6. JD (Health)
7. JD (Information Technology)
8. DD (Finance and Accounts)
9. ED (Admn) as Member Convenor
The Working Committee may co opt any of the experts in the field including the employees of any of the Indian Insurance companies as invitees to the Committee whenever expertise regarding the sector concerned is required.
The Working Committee shall finalize the recommendations within three months and submit report to the Steering Committee. The finalization of the system shall be accomplished within six to nine months.
This issues with the approval of Chairman.
