Lloyd’s of London (“Lloyd’s”) has recently obtained final regulatory approval from the Insurance Regulatory and Development Authority of India (“IRDAI”) to provide onshore reinsurance services in India. Further to this, Lloyd's has confirmed they will open their reinsurance branch in Mumbai, in time for the major reinsurance renewals coming in April 2017.
Use of Lloyd’s India market platform
Syndicates and Managing Agents of Lloyd’s, who wish to participate in Indian reinsurance business through Lloyd’s India market platform, can do so by setting up a Service Company in India with the following norms:
- A Service Company may be a private or a public limited company with a minimum capital of INR 0.5 million
- A Service Company shall be responsible for all statutory & regulatory filings and compliances on behalf of the syndicates it represents
- The Chief Executive Officer (CEO) of a Service Company shall be subject to fit and proper criteria, and shall be appointed with prior approval of the IRDAI
Procedure for the registration of a Service Company
- Syndicates and Managing Agents must make an application to the IRDAI through Lloyd’s India in the stipulated format
- A Service Company must indicate the syndicate(s) that it may or may not represent at Lloyd’s India
- Application for registration of a Service Company must be accompanied with fee of INR 0.05 million
- A Service Company must complete the Lloyd’s "Service Company Coverholder Undertaking" along with Lloyd’s "Coverholder Decision Paper" and subsequently also perform Lloyd’s "Service Company Self-Assessment" against the Lloyd’s minimum standards.
IRDAI Certificate of Registration
After taking into account all submissions, including the recommendation of Lloyd’s India, the IRDAI may issue a certificate of registration with 3 years validity, jointly to the Service Company of Lloyd’s India and the syndicate(s) it represents.
Regulatory and Compliance Requirements
As per the IRDAI (Lloyd’s India) Regulations, 2016, a Service Company must operate in compliance with the Indian insurance laws, Indian companies’ law, Indian foreign exchange laws, and various other applicable local laws. Under the aforementioned laws there are a number of compliances to be undertaken which may, inter alia, include registration requirements, various submissions with the government authorities, maintenance of records and registers, display of notices etc.