Recently IFSCA issued IFSCA (Registration of Insurance Business) Regulations, 2021. These Regulations aim to put in place the process of registration and operations of insurer and Re-insurer in an International Financial Services Centre under regulatory purview of The International Financial Services Centres Authority Act, 2019.
Eligibility criteria
- In case of Indian Insurer: –
- The Applicant is duly registered with the IRDAI to conduct insurance or re-insurance business within India.
- The Applicant has obtained a No Objection Certificate (“NOC”) from the IRDAI to establish a place of business within an International Financial Services Centre (IFSC).
- The Applicant’s Board shall provide the reporting structure of the designated officials, as required under Regulation 17(7).
- The Applicant has demonstrated a satisfactory track record of regulatory and supervisory compliance.
- The Board of the Applicant commits to fulfilling all liabilities arising from the insurance or re-insurance activities conducted by its International Insurance Offices (IIOs).
- In case of a foreign insurer or foreign re-insurer or MGA or Lloyd’s: –
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- The Applicant is registered or licensed to conduct insurance or re-insurance business in its home country or country of incorporation or domicile.
- The Applicant has obtained a NOC from the regulatory or supervisory authority of its home country or country of incorporation or domicile to establish an IIO in the IFSC.
- Applicants intending to engage in re-insurance business must comply with the Net Owned Fund requirements specified under Section 6(3) of the Insurance Act, 1938.
- The Board of the Applicant commits to adhering to the assigned capital and solvency requirements.
- The Board of the Applicant undertakes to fulfill all liabilities arising from the insurance or re-insurance activities conducted by its IIO.
- The Applicant has a proven track record of regulatory and supervisory compliance in its home country, country of incorporation or domicile, and any other jurisdictions where it operates.
- The Applicant is registered or certified under a national regulatory framework with which the Government of India has a Double Taxation Avoidance Agreement.
- The Board of the Applicant will submit the reporting structure of the designated officials as required under Regulation 17(7) of these Regulations.
- The Applicant has maintained a minimum credit rating for the past three years.
- Branch Office of foreign insurer’ or ‘Lloyd’s India’ registered by the IRDAI and
desirous of setting up an office in an unincorporated form in an IFSC, shall meet
with the following requirements:-
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- The Applicant has been granted NOC by the regulatory or supervisory authority of its country of incorporation, to set up an IIO in India;
- The Applicant shall undertakes to comply with the assigned capital, solvency and other requirements as may be specified by the Authority from time to time;
- The Board of the Applicant undertakes to meet all liabilities arising out of business undertaken by the IIO;
- The Board of the Applicant shall submit to the Authority reporting structure of the officials as Regulation 17(7) of these Regulations;
- The Applicant shall submit all the details and information as may be required
and shall comply with additional conditions as may be specified by the
Authority.
- A public company or a wholly owned subsidiary of an insurer or a re-insurer, shall be a company limited by shares registered under the Companies Act, 2013.
- An insurance co-operative society desirous of setting up an IIO shall be a co-operative society registered under the Co-operative Societies Act, 1912, or under any other law for the time being in force in any State relating to co-operative societies or under the Multi-State Cooperative Societies Act, 1984.
- A Body corporate incorporated under the any foreign jurisdiction not being of the nature of a private company, desirous of setting up its place of business in an IFSC shall meet with the following requirements:
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- It establishes its place of business in an IFSC, under the provisions of the Companies Act, 2013; and
- It is registered or certified in a national regulatory environment with whom the government of India has signed Double Taxation Avoidance Agreement.
Permissible Activities
An IIO registered with the Authority may carry any of the following class of businesses as may be permitted by the Authority:-
- Life Insurance Business;
- General Insurance Business;
- Health Insurance Business; or
- Re-insurance Business.
Exempting certain entities/activities from the applicability of IFSCA (Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer) Guidelines, 2022
This refers to the International Financial Services Centres Authority (Anti-Money Laundering, Counter-Terrorist Financing, and Know Your Customer) Guidelines, 2022 (“Guidelines”) issued by the International Financial Services Centres Authority (“IFSCA”). The IFSCA has received requests from market participants to review the applicability of these Guidelines to specific entities or activities within the International Financial Services Centre (“IFSC”). After careful examination of these representations and consideration of other relevant factors, the IFSCA hereby exempts the following entities or activities from the scope of the Guidelines: –
- ‘Global-in-House Centre’ registered under IFSCA (Global In-House Centres) Regulations, 2020;
- ‘International Branch Campus’ or an ‘Offshore Educational Centre’ of a Foreign University or a Foreign Educational Institution registered under IFSCA (Setting up and Operation of International Branch Campuses and Offshore Education Centres) Regulations, 2022;
- ‘Financial Crime Compliance Services Provider’ registered under IFSCA (Book-keeping, Accounting, Taxation and Financial Crime Compliance Services) Regulations, 2024; and
- A Financial Institution providing services only to the entities in its ‘Financial Group’ which are located in a country not identified in the public statement of FATF as ‘High-risk jurisdictions subject to call for action’.
Financial institutions engaging in transactions through third-party business or service providers as part of their operations must conduct a business risk assessment and adhere to the relevant provisions of the Guidelines. All financial institutions, including those specified, must process or receive monetary considerations (such as funds, fees, or amounts) exclusively through accounts maintained with a Banking Unit in the IFSC.
Exempted financial institutions are required to perform and document a Business Risk Assessment. If any AML/CTF risks are identified during this assessment, such entities must comply with the provisions of the Prevention of Money Laundering Act, 2002, its associated rules, and the IFSCA (AML/CTF/KYC) Guidelines, 2022.
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