What is the news?
The International Financial Services Centres Authority (IFSCA) had constituted an Insurance Committee under the Chairmanship of Mr. G.N. Bajpai, former Chairman LIC and SEBI. The mandate of the committee was to identify key areas for the development of insurance and reinsurance business from IFSC.
The committee has now submitted its report to the Chairperson, IFSCA.
What are the key recommendations of the committee?
The committee has given several recommendations to develop IFSC as Global (Re)Insurance Hub. Some of them are:
IFSC as an Insurance Hub for Different Sectors: IFSCA has developed an eco-system for Aircraft Leasing and Financing which can be utilized to develop Aviation Insurance Hub and Trade Credit Insurance at IFSC. Moreover, a similar platform may also be implemented for the shipping industry.
Captive Insurance Model: IFSC can develop a framework for enabling operations of Captive insurance model.
| A captive insurance company is a wholly-owned subsidiary insurer that provides risk-mitigation services for its parent company or a group of related companies. |
Redesign Investment Framework: Investment framework may be redesigned to give more avenues for insurers to mobilize their funds to ensure more returns and flexibility.
Develop alternate risk transfer solutions such as insurance linked securities, catastrophe bonds and parametric risk transfers available for the global market.
Insurance for Indian Diaspora: Map the insurance needs of the Indian diaspora and meet such needs through promotion and development of the ‘hub and spoke’ model.
Source: This post is based on the article “Report of the Committee of Experts on Insurance” published by PIB on 16th November 2021.
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