Section 101A of the Insurance Act, 1938 – Re-insurance with Indian re-insurers – Specified percentage & terms & conditions for re-insurance cessions to “Indian Re-insurer” in compliance with section 101A
Notification F. No. IRDA/RI/1/57/2012,
In exercise of the powers conferred by sub-section (2) of 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:-
The percentage cessions of the sum insured on each General Insurance Policy to be reinsured with the Indian Reinsurer shall continue to be 10% in respect of insurances attaching during the year 1st April, 2012 to 31st March, 2013.
Section 101A(4) provides that a notification under sub-section (2) of section 101A of the Insurance Act, 1938 may also specify the terms and conditions in respect of any business of re-insurance required to be transacted under this section and such terms and conditions shall be binding on Indian re-insurers and other insurers.
In pursuance of the power conferred by section 101A of the Insurance Act, 1938 the Authority, in consultation with the Advisory committee constituted under section 101B of the Act, hereby specifies the percentage and terms and conditions for the reinsurance cessions to the “Indian Reinsurer” in compliance with section 101A of the Act.
|Class||Limit of cession in Sum Insured||Commission||Profit Commission|
|Fire, IAR Large risks||Rs. 500 crores Sum Insured (MD + LOP) per risk||
(a) Minimum 15% for all classes except Group Health.
(b) Minimum 10% for group health.
(c) Anything over and above this can be as mutually agreed between GIC and the Insurance Company.
To be decided mutually between GIC and Insurance Company
|Marine Cargo||Rs. 25 crores sum insured per policy|
|Marine Hull||Rs. 40 crores sum insured per vessel|
|War & SRCC||Rs. 40 crores sum insured per vessel|
|Workmen’s Compensation||No Limit*|
|General Aviation Hull||No Limit*|
|General Aviation Liability||No Limit*|
|All liability products excluding financial liability||Rs. 12.5 crores per policy including USA/ Rs. 25 crores per policy excluding USA|
|Financial, credit and Guarantee lines, mortgage insurance, special contingency policies etc.||Rs. 25 crores Sum Insured per event|
|Other miscellaneous||No Limit*|
|Machinery breakdown, Boiler Explosion and related loss of profits||Rs. 100 crores per risk|
|Contractor’s All Risks, Erection All Risks, Advance Loss of Profits, DSU insurance||Rs. 300 crores per risk (MD + LOP)|
|Oil & Energy||Rs. 37.50 crores SI per risk||5%|
|Crop/Weather Insurance||Rs. 25 crore SI per event||15%|
|Aviation (Airlines)||Rs. 300 crores SI per risk on hull & corresponding % age share on other insurances||Average terms|
* Note: in respect of classes with “No Limit” on cessions marked by an asterisk above, the “Indian Reinsurer” may require the ceding insurer to give immediate notice with underwriting information of any cession to it exceeding an amount per risk specified by it. Cessions in excess of such limits will be binding subject to the notice and information been given.