India Insurance Industry – Governance, Risk and Compliance

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India Insurance Industry Regulation Overview

The insurance industry in India is regulated by the Office of the Insurance Regulatory and Development Authority of India (IRDAI). The other bodies that oversee the market are the International Association of Insurance Supervisors (IAIS), the Life Insurance Council (LIC), and the General Insurance Council (GIC) among others.

The India Insurance Industry Governance Regulation report provides a detailed analysis of the insurance regulations for life, property, motor, liability, personal accident and health, and marine, aviation, and transit insurance. The report specifies various requirements for the establishment and operation of insurance and reinsurance companies and intermediaries. The report also gives insurers access to information on prevailing insurance regulations and recent and upcoming changes in the country’s regulatory framework, taxation, and legal system. It includes the scope of non-admitted insurance in the country as well.

Key Regulators ·        Office of the Insurance Regulatory and Development Authority of India (IRDAI)

·        International Association of Insurance Supervisors (IAIS)

·        Life Insurance Council (LIC)

·        General Insurance Council (GIC)

Compulsory Insurances ·        Motor Third-Party Liability Insurance

·        Marine Liability Insurance

·        Professional Indemnity Insurance

·        Social Security Insurance

·        Aviation Liability Insurance

Key Taxes ·        Tax on Insurance Premium

·        Corporate Income Tax

·        Corporate Capital Gains Tax

·        Value Added Tax

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India Insurance Industry – Key Regulators and Legislation

Office of the Insurance Regulatory and Development Authority of India (IRDAI): IRDAI is the administrative agency of the government that supervises the insurance industry. Section 14 of the IRDA Act 1999 details the duties and responsibilities of IRDAI with respect to the insurance industry. IRDAI is responsible for issuing certificates of registration, renewing, modifying, withdrawing, or canceling licenses of the applicant. It is also responsible for protecting the interests of policyholders in matters relating to the assigning of policies, nominations by policyholders, insurable interests, the settlement of claims, and other terms and conditions.

International Association of Insurance Supervisors (IAIS): The IAIS is a membership-driven global organization that represents insurance regulators and supervisors. It formulates and issues various global insurance principles, standards, and guidance, provides training and support on issues related to insurance supervision and organizes meetings and seminars for insurance supervisors. The IAIS works closely with other financial sector standard-setting bodies and international organizations to promote financial stability.

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India Insurance Industry - Compulsory Insurance

Some of the key compulsory insurance required within the India insurance industry are:

  • Motor Third-Party Liability Insurance
  • Marine Liability Insurance
  • Professional Indemnity Insurance
  • Social Security Insurance
  • Aviation liability insurance

India Insurance Industry Analysis by Compulsory Insurances

India Insurance Industry Analysis by Compulsory Insurances

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India Insurance Industry - Company Registration and Operation

Insurers are required to obtain a license to operate in the country. According to the Act, insurance policies can only be underwritten and sold in the country by insurers registered with and authorized by the IRDAI under section 3 of the Insurance Act. Section 3, sub-section 1 of the Act states that no person or company can carry out any class of insurance business in India unless they have obtained a certificate of registration from the IRDAI. Intermediaries are also required to obtain a license to operate in the country.

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India Insurance Industry – Taxation

Tax is imposed upon insurance premiums within the insurance industry in India. The other taxes imposed are Corporate Income Tax, Corporate Capital Gains Tax, and Value Added Tax. Insurance premium tax is not imposed on policies issued in India however, Goods and Services Tax (GST) is imposed.

Corporate Capital Gain Tax: Insurance companies are also subject to a capital gains tax according to the Income Tax Act of India. Long-term capital gains (gains if the asset is held for more than three years) on listed shares and specified securities, of resident insurance companies that are subject to security transaction tax (STT) are not subject to capital gains tax. Gains not subject to STT are taxed at 10%. Long-term capital gains, from the sale of unlisted securities, of non-resident companies are taxed at 10%; all other long-term capital gains are taxed at 20%.

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Scope

This report provides:

  • Details of the insurance regulatory framework in India.
  • Details of the rules and regulations governing insurance products and insurance entities.
  • Lists and analysis of key trends and developments pertaining to the country’s insurance regulatory framework.
  • Analysis of the rules and regulations pertaining to the establishment and operation of insurance businesses in the country.
  • Details of the taxation imposed on insurance products and insurance companies.

Key Highlights

  • IRDAI regulates the Indian insurance industry
  • The practice of non-admitted insurance is limited to the reinsurance segment.
  • Composite insurance is not permitted in the Indian insurance industry.
  • IRDAI is planning to adopt risk-based solvency requirements for insurance companies operating in India.

Reasons to Buy

  • Provides FAQ-style analytical insights comprising 129 knowledge elements on insurance compliance applicable to the country.
  • Gain insights into the insurance regulatory framework in India.
  • Track the latest regulatory changes and expected changes impacting the India insurance industry.
  • Gain detailed information about the key regulations governing the country’s establishment and operation of insurance entities.
  • Understand key regulations and market practices pertaining to various types of insurance products.

Table of Contents

  • 1. Legislation Overview

    • 1.1. Supervision and Control
    • 1.2. Legislation

  • 2. Compulsory Insurance
  • 3. Non-Admitted Insurance Regulations
  • 4. Company Registration and Operation

    • 4.1. License
    • 4.2. Foreign Direct Investment / Ownership
    • 4.3. Minimum Capital Requirements
    • 4.4. Solvency Margins
    • 4.5. Reserve Requirements
    • 4.6. Statutory Return Requirements
    • 4.7. Fee Structure

  • 5. Taxation

    • 5.1. Tax on Insurance Premium
    • 5.2. Corporate Income Tax
    • 5.3. Corporate Capital Gains Tax
    • 5.4. Value Added Tax

  • 6. Legal System
  • 7. Policy Practice
  • 8. About GlobalData
  • 9. Contact Us

Table

India – Corporate Tax Rates for The Financial Year 2023

India – Minimum Alternate Tax Rates for The Financial Year 2023

Figures

List of Tables

India – Corporate Tax Rates for the Financial Year 2021

Frequently asked questions

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