Introduction: The International Financial Services Centres Authority (IFSCA) is at the forefront of a major shift in the regulatory landscape concerning the investments made by the International Financial Service Centre Insurance Office. With a clear objective, IFSCA has introduced its latest consultation paper aimed at amending the regulations from 2022.
Consultation Objectives: The core aim of this consultation paper is to engage the public and seek their perspective. By inviting comments, views, and suggestions, IFSCA is trying to ensure that the final regulations are well-informed and take into account diverse viewpoints.
Historical Backdrop:
- Role of IFSCA:
- Acknowledging the significant role of investment income for insurers and reinsurers, IFSCA previously notified the International Financial Service Centre Insurance Office Regulations in January 2023.
- Interplay with Insurance Regulatory and Development Authority of India (IRDAI):
- IRDAI, another key player in the sector, subsequently released its own Re-insurance Amendment Regulations in August 2023. This amendment essentially provided a framework for IFSC Insurance Offices, which invest retained premiums from Indian insurers in the Domestic Tariff Area. This meant they could participate in Category 2, similar to Foreign Reinsurance Branches.
- Public Participation:
- IFSCA’s commitment to transparency is evident by their decision to upload the draft regulations on their website for public viewing. They’ve further facilitated a mechanism for stakeholders to submit their comments and suggestions via email.
Amendments Proposed:
- Title and Onset:
- The official title, “International Financial Services Centres Authority (Investment by International Financial Services Centre Insurance Office) (Amendment) Regulations, 2023,” clarifies the purpose of the regulation. These amendments will be effective from their publication date in the Official Gazette.
- Substantial Amendments:
- Significant changes are being proposed in regulations 5 and 20. One key insertion postulates the non-applicability of certain regulations for IIOs investing retained premiums. Another change proposed in regulation 20 introduces terminological modifications for better clarity.
Note on Previous Regulations: The pre-existing 2022 regulations, a precursor to these proposed changes, were initially made public in January 2023.
Invitation to Comment: IFSCA has provided a structured format for stakeholders to submit their feedback on the proposed amendments. This structured approach ensures that feedback is specific, relevant, and actionable.
Conclusion: The IFSCA’s proactive approach in amending the regulations for investments by the International Financial Service Centre Insurance Office is commendable. With a clear aim of refining the regulations and a structured approach to invite feedback, IFSCA shows its commitment to fostering a transparent, inclusive, and efficient regulatory environment. Stakeholders and the general public should seize this opportunity to influence and shape the regulations that govern such a pivotal sector.
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International Financial Services Centres Authority
(A statutory authority established by Government of India)
CONSULTATION PAPER ON PROPOSED TO
IFSCA (Investment by IFSC Insurance Office) (Amendment) Regulations, 2023
29/08/2023
Objective:
The objective of this consultation paper is to seek comments / views/ suggestions from public on the proposed amendments to International Financial Services Authority (Investment by International Financial Service Centre Insurance Office) Regulations, 2022.
Background:
1. The International Financial Services Centres Authority (IFSCA) considering the significance of investment income for insurers and reinsurers , IFSCA in accordance with Section 27 of the Insurance Act, 1938, had notified International Financial Service Centre Insurance Office) Regulations, 2022 on 12th January 2023.
2. Subsequently, the Insurance Regulatory and Development Authority of India notified Insurance Regulatory and Development Authority of India (Re-insurance) (Amendment) Regulations, 2023 on 22nd August 2023. These regulations inter-alia enables IFSC Insurance Offices, which invest 100% of retained premiums, emanating from insurers in India, in the Domestic Tariff Area to participate in Category 2 at par with the Foreign Reinsurance Branches, under the Reg. 5 , Clause (A) sub-regulation (2), Procedure for Re-insurance placement.
3. In view of the aforesaid draft regulations are placed on the website of the IFSCA at https://ifsca.gov.in/PublicConsultation. General public and stakeholders are requested to forward their comments / suggestions through e-mail to Insurance Dept. at insurance-dept@ifsca.gov.in with copy to Mr. Bhaskar Khadakbhavi at khadakbhavi@ifsca.gov.in and Rishi Kale at rishi.kale@ifsca.gov.in by 19th September, 2023 in the attached format. It is further requested to provide comments in MS Word or MS Excel format only.
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INTERNATIONAL FINANCIAL SERVICES CENTRES AUTHORITY
NOTIFICATION
Gandhinagar, the xx September, 2023
DRAFT – International Financial Services Centres Authority (Investment by International Financial Services Centre Insurance Office) (Amendment) Regulations, 2023
IFSCA/2023-24/GN/REGxxx — In exercise of the powers conferred by sub-section (1) of Section 28 read with Section 12 and 13 of the International Financial Services Centres Authority Act, 2019, the International Financial Services Centres Authority hereby makes the following Regulations to amend the International Financial Services Centres Authority (Investment by International Financial Services Centre Insurance Office) Regulations, 2022 namely:-
1. Short title and commencement:-
(1) These Regulations may be called the International Financial Services Centres Authority (Investment by International Financial Services Centre Insurance Office) (Amendment) Regulations, 2023;
(2) They shall come into force from the date of their publication in the Official Gazette.
Amendment to the International Financial Services Centres Authority (Investment by International Financial Services Centre Insurance Office) Regulations, 2022.
2. In the regulation 5, after sub-regulation (8) the following shall be inserted, namely –
“(9) Regulations 10, 11, 12 and 13 herein shall not be applicable to an IIO investing its retained premium in DTA for the purpose of compliance with the limits mandated under reg. 5(2)(A)(b) of the IRDAI (Re-insurance) Regulation, 2018.
Explanation – The IIO covered under Reg. 5(9) shall continue to follow the mode and manner of investment, as specified in these regulations;”
3. In regulation 20, the words ‘Repeals and Savings:’ shall be substituted with words ‘Non- applicability of certain regulations and savings:’
K. Rajaraman, Chairperson
[ADVT.-III/4/Exty./xxx/2023-24]
Note: The International Financial Services Centres Authority (Investment by International Financial Services Centre Insurance Office) Regulations, 2022 were published in the Gazette of India Extraordinary vide notification No. IFSCA/2022-23/GN/REG030 on 13th January, 2023.
Format for providing comments / suggestions
Proposed –
International Financial Services Centres Authority (Investment by International Financial Services Centre Insurance Office) (Amendment) Regulations, 2023
Inputs / Comments suggested by:
| Page No. of Draft Regu. |
Reg. No. | Sub-Regu No. /Para No. |
Comments / Suggestions / Suggested modifications |
Rationale |
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