GFIA Global Federation of Insurance Associations

The Global Federation of Insurance Associations (GFIA) has written to India’s Ministry of Finance expressing support for the Insurance Regulatory and Development Authority of India’s (IRDAI) recent reform initiatives which aim to foster a competitive insurance sector. GFIA commended the IRDAI’s objectives to enhance the ease of doing business, promote sustainable development within the reinsurance market, and safeguard the interests of policyholders.

However, GFIA raises concern over specific provisions that could hinder foreign investment. In particular, GFIA highlights that current restrictions - such as caps on dividend distributions and related-party payments - apply exclusively to insurance intermediaries with more than 50% foreign direct investment (FDI), while domestic entities and insurers are exempt. GFIA warned that these measures could create an uneven playing field and deter future foreign investment.

Brad Smith, Chair of GFIA’s Trade Working Group, stated in the letter: “We believe these restrictions risk harming the interests of policyholders as they reduce future investments by foreign intermediaries, thus preventing these intermediaries from providing their clients with innovative risk management solutions’/

GFIA also urges IRDAI to simplify and streamline approval requirements, which would make it more attractive and easier for foreign insurers and intermediaries to do business.

GFIA encourage IRDAI to reconsider the current limitations on dividend and related-party payments for intermediaries with significant foreign ownership, and to remove any barriers that hinder fair competition in the India’s insurance market.