| Updated: Feb 10, 2018, 07:32 IST
MUMBAI: The Insurance Regulatory and Development Authority of India (IRDAI) has come out with draft guidelines that require reinsurance buyers to give priority to state-owned GIC Re and multinationals that have branches in India. Insurance brokers and their clients are up in arms against this proposal as hitherto they were free to approach any cross-border reinsurer.
Reinsurers are companies that provide cover to insurance companies. While general insurance companies are customers of reinsurers, very often, in cases of specialised risks, corporates are also involved in the choice of reinsurers.
The Insurance Brokers Association of India (IBAI), which represents corporate clients, has written to IRDAI chairman T S Vijayan, objecting to the new rules. “The prescriptive measures under the regulations require the consumer to approach reinsurance providers in preferred order without any choice to the consumer of the service and creating right of first refusal (RoFR) effectively at each category, which is extreme form of anti-competition,” the letter said. “Choice is a fundamental right of the consumer and this is fully compromised under these draft regulations,” the IBAI letter added.
An official with a corporate group said, “We have been buying insurance on basis of support from overseas reinsurers with whom we had business relations for decades. The new norms force us to go to domestic companies first.”An IRDAI source said, maximisation of premium retention within the country is a regulatory objective set by the government.

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