Mandatory cession rate for GIC Re stays at 5%
No change in mandatory cession rate
The insurance regulator, the IRDAI, has maintained the obligatory cession from non-life insurers for state-controlled national reinsurer GIC Re at 5% for the current financial year which started on 1 April. The cession rate is decided by the IRDAI on an annual basis.
In addition, under IRDAI regulations, GIC Re, which is the only domestic reinsurer, gets the first order of preference in any reinsurance contracts. While there are branch offices of global reinsurance companies, they are not granted obligatory cessions.
While there was also a proposal for life insurers to cede a portion of their risks to GIC Re, this has not yet been finalized.