A committee submitted its report to the International Financial Services Centers Authority (IFSCA) proposing several key areas and recommendations for developing the IFSC as a global hub for insurance and reinsurance business.

The main recommendations of the IFSC Insurance Committee are as follows:

1. The IFSCA has developed an ecosystem for aircraft leasing and financing that can be used to develop an aviation insurance platform and commercial credit insurance at IFSC.

2. A similar platform can be set up for the shipping industry by facilitating protection and compensation clubs.

3. The IFSCA may develop a new framework to enable the operations of captive insurers.

4. The IFSCA has put in place a framework that can be used by (re) insurers to develop global internal centers to provide ancillary services to the insurance business.

5. The IFSC investment framework can be redesigned to expand the possibilities for insurers to raise their funds and invest in a basket of financial instruments and products that offer higher returns and flexibility.

6. Premium financing, a very important driver of some niche areas of insurance business, can be introduced into the IFSC.

7. The IFSCA can promote the development of alternative risk transfer solutions such as insurance-linked securities, catastrophe bonds and parametric risk transfers available for the global market.

8. The IFSCA can map the insurance needs of the Indian diaspora and respond to these needs by promoting and developing a “hub and spoke” model.

The nine-member committee, formed in November last year, is chaired by MGN Bajpai, who previously served as chairman of the Securities and Exchange Board of India and the Life Insurance Corporation of India.

The committee says in its report that the companies IFSCA seeks to attract are global. Therefore, IFSCA will need to be agile and create a robust and growth-oriented regulatory environment, i.e. proactive, coactive and reactive.

To date, the Indian government has set up an IFSC located in GIFT City in Gujarat, which became operational in April 2015. The Indian government established the IFSCA in April 2020 as a unified regulator, which is vested with regulatory powers of four financial services regulators in India, namely Reserve Bank of India (RBI), Securities & Exchange Board of India (SEBI), Insurance Regulatory Development Authority of India (IRDAI) and Authority Indian Pension Fund Regulatory Development (PFRDAI). He oversees the financial institutions, financial services and financial products of the IFSC.