IRDA proposes to set up Insurance Clearing House

India Infoline News Service | Mumbai |

According to IRDA, the inter-company balances in reinsurance and coinsurance business are at a very high level and have been on a constant rise

The Insurance Regulatory and Development Authority on Friday has proposed to set up an Insurance Clearing House.

According to IRDA, the inter-company balances in reinsurance and coinsurance business are at a very high level and have been on a constant rise.

In order to ensure timely and effective reconciliation of these balances and also to achieve transparency and for timely and efficient accounting and settlement of these balances, the Authority intends to establish, “Insurance Clearing House” to act as a clearing house for these transactions, IRDA said in a notification.

Insurance Clearing House would be registered under the Companies Act 1956 as a public limited company with a minimum paid-up share capital of Rs 100 crore and licensed under the provisions of these guidelines to act as an Insurance Clearing House, IRDA said.

It would be promoted by Indian insurers, reinsurers and the Authority. The Authority may offload its stake gradually over a period of time. No single insurer or reinsurer would have more than 10 per cent of the paid-up capital. The holding would be restricted to entities in insurance business licensed in India, the draft guidelines said.

The IRDA has invited feedback on the draft guidelines from all interested parties and stakeholders till 27 November 2013.
 

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