Issues Pertaining to Opening of Offices in IFSC, GIFT City, Gujarat

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sexx INSURANCE REGULATORY AND inland. DEVELOPMENT AUTHORITY OF INDIA Date: 28" January, 2016

Ref: IRDA/NL/CIR/MISC/019/01/2016

CIRCULAR

;

To All the General Insurers, Reinsurers, Brokers

Re: Issues pertaining to opening of offices in IFSC, GIFT City, Gujarat.

1. Background:

The Authority had vide Circular ref: IRDA/NL/GDL/MISC/065/04/2015 dated 6" April, 2015 issued Insurance Regulatory and Development Authority of India (International Financial Service Centre) Guidelines, 2015 that enable Insurers/Reinsurers to open offices in the IFSC, GIFT City, Gujarat.

The Authority, in terms of the powers vested under Insurance Regulatory and Development Authority of India (Regulation of Insurance Business in Special Economic Zone) Rules, 2015 read with Section 18 (2) of the SEZ Act, 2005 AND Section 14 of the Insurance Regulatory and Development Authority Acct, 1999 hereby issues the following clarifications:

2. Applications from Indian Insurers/Reinsurers:

Every application for registration from an Insurer/Reinsurer registered with the Authority shall include the following:

• i) an application in the prescribed format (Form: IRDAI/SEZ/Application — Indian Insurer)

il) certificate of approval from the appropriate authority as prescribed in SEZ Act ili) approval from the Board of Directors of the Applicant through a resolution in support of the commitment to set up such IIO. iv) projected business for next 5 years;

v) . evidence of payment of non-refundable fee of Rs. 50,000/-

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3. Applications from Brokers:

In order to facilitate conduct of Insurance/Reinsurance business, Brokers registered with the Authority are permitted to open IFSC Insurance Broking Office (IIBO) in the IFSC. Every such application shall include by the following:

• i) an application in the prescribed format (Form: IRDAI/SEZ/Application — Broker)

• il) certificate of approval from the appropriate authority as prescribed in SEZ Act

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• ili) approval from the Board of Directors of the Applicant through a resolution in support of the commitment to set up such IIBO.

• iv) projected business for next 5 years; v) evidence of payment of non-refundable fee of Rs. 50,000/-

4. Annual fee payable by entities registered with the Authority:

The Insurers, Reinsurers and Brokers registered with the Authority and having a registered IIO, IIBO at IFSC shall be required to pay Annual Fee as stipulated in clause 14 of the guidelines mentioned above.

5. Direct DTA business from an IIO, IIBO:

While the clause 11 (1) of the guidelines mentioned above permits Indian Insurers to transact specified Direct Insurance business within the IFSC, such Insurers and Brokers shall refrain from transacting any Direct Insurance business from the Domestic Tariff Area (DTA) from an office being set up in the IFSC.

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“Karesh cae Sr. Joint Director.

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FORM IRDAI/SEZ/ Application

—

APPLICATION BY AN INDIAN BROKER FOR GRANT OF REGISTRATION AS INTERNATIONAL FINANCIAL SERVICE CENTRE INSURANCE BROKING OFFICE (IIBO)

|S.No.<br>[|S.No.<br>[|| Particulars<br>oe<br>| -Applicant’s Response<br>~SectionA:Company Profile<br>=|| Particulars<br>oe<br>| -Applicant’s Response<br>~SectionA:Company Profile<br>=|| Particulars<br>oe<br>| -Applicant’s Response<br>~SectionA:Company Profile<br>=|| Particulars<br>oe<br>| -Applicant’s Response<br>~SectionA:Company Profile<br>=|||Remarks|_|-<br>||
|---|---|---|---|---|---|---|---|---|---|
|4||Name ofthe applicant|7|i|a|||||oe|
|||||oo|.||||"||
|2||Address of its registered office||||||||
||3|Date of incorporation:|||:|||.|“=<br>||
|||[DD/MM/YYYY]||||||||
|4||Registration No. and date of|first||||Copy ofthe|||
|||registration [DD/MM/YYYY]|||||registration|||
||||||||certificate/licence|||
||5|Line<br>of<br>reinsurance<br>business||||||||
|||currently handled||||||||
|||-<br>a.<br>Life||||||||
|||b.<br>General||||||||
|||c.<br>Life and General||||||||
|||d.<br>Composite|||.|||||
|~|6||Amount<br>of<br>Authorised capital)||8|a||.||||
|||Subscribed capital, Issued capital||||||||
|||& Face value of shares and their||||||||
|||numbers||||||||
||||||||||:|
|7||BoardResolution|||||Annexure|-||
|||Provide a copy of the resolution||||||||
||||by the applicants board<br>support of the commitment to|in<br> set|||||||
|Page<br>3of8||||||||||

|——T|op an TBO.|op an TBO.|||a|a|a|||_||———|———|———|———|_|
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|8|Name,|Address||||and||contact<br>|—||. ||||||Provide a certified||
||details of the person responsible||||||||||||||copy of the board||
||for the|affairs||of||the||proposed|||||||resolution||
||IIBO||||||||||||||appointing|the|
||||||||||||||||person responsible||
||||||||||||||||for affairs of IIBO||
|9||Regulatoryapprovals|||||||||||||||||Annexure-||
||Provide|a|copy||of||regulatory||||||||||
||approvals||for|opening||||of an|||||||||
||office<br>in SEZ|||for||conducting|||||||||||
||insurance business|||||in the SEZ.|||||||||||
|10|AnnualReports|Reports||||||:||Oo||.|||Annexure-||
||Annual|reports||for||the||past 3|||||||||
||years.||||||||||||||||
|11|Details|of the Office|||||proposed||to||(a) Name ofthe|the||office:||||
|||||||||||||||||||
||be opened:|||||||||(b) office Address:|||||||
|||||||||||(c) Address||||for|||
|||||||||||Communications|||||||
|||||||||||(state the||name of|||||
|||||||||||||||||||
|||||||||||the||Principal|||||
|||||||||||Officer,|telephone||||||
|||||||||||numbers,||||fax|||
|||||||||||numbers,|||mobile||||
|||||||||||number,||||e-mail|||
|||||||||||address|and|||such|||
|||||||||||other details:|||||||
|||||||||||(d) Principle|Officer for||||||
|||||||||||IIBO|&|||Key|||
||:||||||||||||||||
|||||||||||Management|||||||
|||||||||||Personnel||||and|||
|||||||||||allocation||||of|||

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responsibilities.(Pr - oposed): (e) Organizational structure. Reporting relationships ofthe | — IIBO to the insurer: (f) Plann ed infrastructure at ; proposed office 12 | Details of payment of fee prescribed under the IFSC guidelines SectionC: IIBO Business Strategy ras 14 | Market Researchand Analysis | == ~~ | Annexurea The applicant may have undertaken some form of market analysis to ascertain the market potential. The applicant may : furnish full description of the research, along with the conclusions reached . 45 Types of Reinsurance | Annexurearrangements to be offered The applicant may give detail of the types of _ reinsurance arrangements that it will offer to the Indian and other markets from the IIBO. 17 | Information Technology } ; . | Annexure[-] ~ | Insurance industry is very much dependent on computer technology. Full description Page 5 of 8 OO . ee

|—|should<br>be<br>provided<br>for<br>the|should<br>be<br>provided<br>for<br>the|.||||a|
|---|---|---|---|---|---|---|---|
||following:||||,|||
||e<br>The<br>different|areas<br>where||.||||
||computer<br>systems.<br>will<br>be|||||||
||employed.|||||||
||||||||||
||e The<br>degree|to<br>which<br>the||||||
||systems<br>will|be<br>used<br>for||||||
||policyholder servicing.|||||||
||e The degree of interconnectivity|||||||
||ofthe systems.|||||||
||e A<br>description|of how the<br>IT||||||
||systems<br>will|be<br>-used_<br>to||||||
||develop<br>the<br>required|||||||
||Management|Information||||||
||Systems.|||||||
||e<br>Extent<br>of<br>procedures<br>and|||||||
||operations<br>which<br>will<br>remain|||||||
||manual.|||||||
|19||Recruitment<br>and|Training<br>=||||||Annexure-||
||Different areas<br>of the company|||||||
||require<br>personnel<br>with<br>different|||||||
||skill sets.<br>Some|of the special||||||
||technical<br>skills|would<br>require||||||
||special focus. The company may|||||||
||submit a detailed|write-up on<br>its||||||
||plans<br>to<br>impart|technical<br>skills||||||
||and knowledge locally.|||||||
|~ 20 | Internal Controls||re||~|||Annexure-||
||The<br>company|will<br>need<br>to||||||
||establish a set of|procedures and||||||
||normsforvarious|activities.<br>The||||||

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||||||||||||.||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|~|||||manner<br>in which these<br>will|||be||||||||
|||||monitored should be described.|||||||||||
||21||| Expenses|| Expenses of Administration|||—||||Annexure-||||
|||||The proposed expenses as a||per|||||||||
||||||||||||.||||
|||||cent of commission earned.|||||||||||
|22|||||Technicalskills||Oe|||.||Annexure-||||
|||||The technical skills of the people|||||||||||
|||||who will work<br>in|the branch|and|||||||||
|||||plan for imparting knowledge|||for||||||||
|||||skill upgradation|at local level.||||||||||
|-|23||||Financial Projections =|||||(a)Amount__||__|of|Annexure-|.|||
|||||A description of|the model used||||business.||||||
|||||for financial projections should|||be|(b)|Size<br>of|support|||||
|||||provided, based|on assumptions,||||and<br>administrative||||||
|||||for a period of 5 years, for each|||||staff.||||||
|||||year<br>from<br>the|start.<br>Please|||(c)|Commissions||||||
|||||provide<br>details|against each||of|(d)|Sales and|related|||||
|||||the items listed|in the next|cell.|||expenses.||||F||
|||||(Amount should be Rs in crores)||||(e)|Expenses||of||||
||||||||||administration.||||||
|||||||||||||||.|
|||||||||(f)|Statu tory|reserves|||||
|||||.|||||||||||
||||||||||(if any).||||||
|||||||||(g)|Profit<br>and||loss||||
||||||||||accounts||and||||
||||||||||balance sheets.||||||
|||||||||(h)|Capital needs||||||
|||||||||(i)|Break-even||||||
||||||||||periods<br>and_||the||||
|||||.|||||||||||
||||||||||Return on|Capital.|||||
|||||||||This<br>section||should|||||
|||||||||also.<br>discuss|||the||||

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----- Start of picture text -----<br> . manner in which the . |<br>future capital needs<br>willbe met.<br>24 Conclusion | a<br>In conclusion, please discuss the .<br>viability of the operations. Any<br>special issues or concerns should<br>also be indicated :<br>----- End of picture text -----<br>

Certification

|, the undersigned, solemnly declare that the facts given in this application form on behalf of the applicant company, are true and that the projections and estimations are based on reasonable assumptions.

Place

Date: .

Signature of the Authorised Person (with Designation and Seal)

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