Insurers operating for 3 years eligible to open offices abroad: IRDA

India Infoline News Service | Mumbai |

Life insurers, general insurers and reinsurance companies should have a net worth of Rs. 5 billion, Rs. 2.5 billion and Rs. 7.5 billion, to apply for opening offices abroad, IRDA said

IRDA (Insurance Regulatory and Development Authority) on Thursday said Indian insurers in operation for at least three years will be eligible for opening offices outside the country.

A 'foreign insurance company' would mean a company registered outside India whose paid-up capital is subscribed to by an Indian insurer and should include a foreign subsidiary company wherein the Indian insurer has a holding of more than 50% of its paid-up capital.

According to IRDA guidelines,  life insurers, general insurers including health insurance business and reinsurance companies should have a net worth of Rs. 5 billion, Rs. 2.5 billion and Rs. 7.5 billion, respectively, to apply for opening offices abroad.
The guidelines said the registered Indian insurance company should not suffer from any adverse report of the authority on its record of regulatory compliances, for three years out of the past five years from the date of application.

The insurers would need to have booked profits for the three years out of the past five years.

The registered Indian insurer should submit to IRDA, the regulatory architecture with reporting compliance and all other requirements necessary for establishment and conduct of insurance business of the jurisdiction where it intends to set up a foreign insurance company (including branch office).

“Indian insurers should formulate an ‘investment policy’ to suit the scale, nature and area of operations of the foreign branch offices apart from business considerations and submit the same before its board of directors for approval,” Irda said.  
IRDA has asked the insurers to comply with know your customer (KYC) and anti-money laundering guidelines.

IRDA said the company board should be responsible for monitoring the functioning of its foreign operations at regular levels and report to the regulator any event/development, which could impair the functioning of foreign operations.

"Any foreign insurance company with the approval of the Authority shall be closed only with the prior approval of the Authority and subject to compliance of the host country rules and regulations," said IRDA.
 

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