???Stable outlook ratings a must for foreign reinsurers???

Insurance Regulatory and Development Authority of India (IRDAI) has said that foreign reinsurerswanting to set up branch offices in India should have a minimum credit rating, which is at least having stable outlook from any of the internationally renowned credit rating agencies for the last five years. 

In its draft norms on registration and operation of branch offices, IRDAIsaid that the applicant should have minimum net owned fund of INR5000 crore at any time.

Apart from an in-principle clearance from the home country regulator at the time of filing the application, the applicant also should be registered in a national regulatory environment and with whom the Indian government has signed Double Taxation Avoidance Agreement. 

IRDAI will take a decision on the number of re-insurers that may be permitted to set-up branches in a year depending on the orderly growth of the insurance and reinsurancemarket, national interest, or other related aspects.

The regulator said that a branch office has to maintain a minimum retention of 30-50 percent of the Indian reinsurance business.