Insurance Regulatory and Development Authority (General Insurance - Reinsur

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( 2) ~ amtfufif. ~ 1i1q14,i1 r ( ~-nifq 14\ttf) ~~~~*~'it 73'Q'Tffl' ~ ~-;rir ~ '1N (~} ~'$~ Cflqifcfiq, ~'$311QT'{1R~J;li41!li-11cfi(OI ~ I ;;r. m ~ . 31!:7.ll!J [~ lll/4/16 1/12/31m. J INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY NOTIFICATION Hyderabad, the 7th February, 20 13 Insurance Regulatory and Development Authority (General Insurance - Reinsurance) Regulations, 2013 F. No. IRDA/Reg./5/63/2013.- In exercise of the powers conferred by section 114A of the Insurance Act, 1938, sections 14 and 26 of the Insurance Regulatory and Development Authority Act, 1999, the Authority, in consultation with the Insurance Advisory Committee, hereby makes the following regulations, namely: 1. Short title and commencement : (1) These regulations may be called the Insurance Regulatory and Development Authority (General Insurance - Reinsurance) Regulations, 2013. 2) These Regulati0ns replace the Insurance Regulatory and Development Authority (General Insurance - Reinsurance) Regulations, 2000. (3) These regulations shall come into force on the date of their notification in the Official Gazette. 2. Definitions: In these regulations, unless the context otherwise requires: a) 'Act' means the Insurance Regulatory and Development Authority Act 1999 (41 of 1999); b) 'Authority' means the Insurance Regulatory and Development Authority established under sub- section (1) of Section 3 of the Act; c) 'Cedant' is an insurer who enters into a reinsurance contract or a reinsurer who enters into a retrocession contract; d) 'Cession' means the part of insurance passed to a reinsurer by the insurer which issued a policy to the original insured or part of contract ceded by a reinsurer to a retrocessionaire; e) 'Cover note' is a written document issued by the reinsure1· or the reinsurance broker authorized by it, detailing the contract terms and conditions of the contract and the details of the percentage of risk placed with each reinsurer. r 'qlTJ I I 1--"&0s 41 5 f) 'Facultative' means the reinsurance of a part or all of a single policy in which cession is negotiated separately and that the reinsurer and the insurer have the option of accepting or declining each individual submission; g) 'Indian re-insurer/s' means the insurer/s who carry on exclusively reinsurance business and is notified in this behalf by the Authority under Sec.101A of Insurance Act. h) 'Pool' means any joint underwriting operation of insurance or reinsurance in which the participating insurer/s or reinsurer/s assume a predetermined and fixed interest in all business written. i) 'Retrocession' means the transaction whereby a reinsurer cedes to another insurer or reinsurer all or part of the reinsurance it has previously assumed; j) 'Retention' means the portion of the risk which an insurer assumes for his own account; k) 'Reinsurance contract: is the legally binding document on all the parties that provide a complete, accurate and definitive record of all the terms and conditions and other provisions of the reinsurance contract. 1) 'Treaty' means a reinsurance arrangement between the insurer and the reinsurer, usually for one year or longer, which stipulates the technical particulars and financial terms applicable to the reinsurance of some class or classes of business;· m) Words and expressions used and not defined in these regulations but defined in the Insurance Act, 1938 (4 of 1938) or the General Insurance Bm,iness Nationalisation Act, 1972 (57 of 1972) or Insurance Regulatory and Development Authority Act, 1999 (41 of 1999), rules made there under shall have the meanings respectively assigned to them in those Acts or rules as the case may be. CHAPTER II 3. PROCEDURE TO BE FOLLOWED FOR REINSURANCE ARRANGEMENTS (1) The Reinsurance Programme of every (re)insurer shall be guided by the following objectives to: a) Maximize retention within the country; b) Develop adequate capacity; c) Secure the best possible protection for the reinsurance costs incurred; d) Simplify the administration of business. (2) Every (re)insurer shall maintain the maximum possible retention commensurate with its financial strength, quality of risks and volume of business. The Authority may require an (re)insurer to justify its retention policy and may give such directions as considered necessary in order to ensure that the Indian (re)insurer is not merely fronting for a foreign insurer. 5"6'.§"Gl/.<'~1:~-..:p