The Indian government is preparing once again to introduce a captive framework to its insurance legislation, according to multiple reports in the country’s media.
Proposed captive regulations were anticipated in 2022 and 2023, but amendments to India’s Insurance Act, 1938 did not materialise or progress.
The Economic Times, and other Indian media outlets, are now reporting a bill amending the Act will be introduced as part of the government’s Budget session and will include the issuance of captive licences, as well as the introduction of a composite licence so insurers can write life and non-life risks in the same entity, and a change in capital and solvency regulations.
The broader amendments are designed to meet the governments target of ‘Insurance for All by 2047’, and will also include measures to support the development of micro insurance.
The introduction of domestic regulation is thought to be imperative for the Indian corporate community to embrace and utilise captive insurance structures, because it is currently difficult to pay premium to internationally-domiciled captives.
Considering some large captive managers and brokers already outsource some back office work to India, it may be fairly straightforward to build local expertise and leadership should an Indian captive domicile materialise.