An IFSCA appointed expert committee has made a slew of suggestions in its second interim report to make GIFT IFSC ( in Gujarat) an attractive destination for Life, Health and Non-Life Insurance companies.
This second interim report, submitted to the IFSCA Chairman Injeti Srinivas, focuses on recommendations for international insurance activity to flourish in the IFSC besides making suggestions aimed at swift and efficient development of international retail business in the IFSC. This report follows the first interim one, covering banking-related proposals which was submitted on September 11, 2020. Other key business verticals such as asset management and capital markets, will be covered in reports that the committee will submit in due course, an official release said.
It maybe recalled this expert committee was constituted by the International Financial Services Centre Authority (IFSCA) for promoting international retail business in International Financial Services Centre (IFSC) along with potential strategies for making IFSC attractive for international financial services; provide a roadmap for future growth of international retail business in IFSC; and also examine and recommend any other issues that are important in the development of the IFSC.
The main recommendations of this second interim report include: Permit Non-resident Indians (NRIs)/Persons of Indian Origin (PIOs) to buy Life Insurance policies for themselves as well as their family members who are based in India and abroad from companies set up in the IFSC and allow them to pay premium in the currency of their choice (including Indian rupees); Permit NRIs/PIOs to buy portable life insurance policies which offers them flexibility to pay premium in INR or in foreign currency, based on their choice, after they return to India; Permit residents to buy overseas health insurance for themselves and their dependants (in India and overseas) from insurance companies or intermediaries in the IFSC for medical treatment anywhere in the world; Allow insurance companies to offer health insurance products to NRIs / PIOs including covering their family members who are based in India.
The second interim report has also suggested that insurance companies in the IFSC be permitted to offer personal accident cover, baggage loss, documents loss cover and travel health insurance anywhere in the world for NRIs/ PIOs and to any other non resident; IFSC should emerge as Reinsurance Hub for Asia and Africa with more reinsurers encouraged to set up base in IFSC. IFSC can also emerge as Aviation insurance hub for the world; Insurers be allowed to set up subsidiaries in IFSC to promote business;Indian investors be allowed to set up direct and reinsurance companies with lower capital requirements to promote insurance abroad; Foreign reinsurance brokers be encouraged to set up base in IFSC to create a vibrant insurance market.
“The Committee believes that the IFSC can become an engine of economic growth for India.The global opportunity for insurance sector is immense. The Indian insurance sector is underperforming compared to that of developed and emerging economies. Insurance penetration and density, which are the key performance indicators of the industry, are especially low in India.
GIFT IFSC promises to offer a cost-effective and tax-efficient jurisdiction for insurance companies to set up operations there,” said Pradip Shah, Chairman of the Expert Committee
Apart from channelizing India’s offshore business to the IFSC located at GIFT City and making it the gateway for India centric international financial services, the objective is to make it a global hub for international financial services on the lines of London, Hong Kong, Singapore, and Dubai.