Non-life insurers not keen on paying obligatory cession to GIC Re

The obligatory cession was reduced from 5 per cent to 4 per cent for FY23. The impact of the reduction on GIC Re would be around Rs 2,000 crore

There is growing clamour among non-life insurers that the business they cede to General Insurance Corporation (GIC Re) should be done away with completely as the commission paid by the state-owned reinsurer does not reflect the industry cost structure.

While no formal proposal has been drafted by the industry players through the general insurance council but discussions with the Insurance Regulatory and Development Authority (Irdai) has led to the formation of a task force to look into this aspect.

Under the chairmanship of Bhargav Dasgupta, MD and CEO, ICICI Lombard General Insurance, the task force will look into the issues to find