Kathmandu. GIC Relay, which has been the sole domestic reinsurer in India for more than five decades, is set to get its first private sector competitor. The Insurance Regulatory and Development Authority of India (IRDA) on Wednesday approved the license of private sector reinsurance company Valu Atics Reinsurance Limited, paving the way for private sector reinsurance companies to operate.
The company is mainly invested in by Canadian billionaire Prem Vatsa’s Fairfax Group and Indian businessman Kamesh Goyal. The authority said in a statement, “M/s Valu Atics Reinsurance Limited has been approved for registration. This is the first reinsurer to be granted registration specifically to carry on reinsurance business in the revamped regulatory landscape. The authority believes that private sector entry will be important to promote competition in the reinsurance sector.
According to AsianInsurance Post, Oben Ventures LLP (Kamesh Goyal) and FAL Corporation (Fairfax Financial Holdings) will be the promoters of Valuatives Re. The reinsurer will invest an initial paid-up capital of INR 2.10 billion to start the business.
Earlier in December 2018, the authority had rejected a proposal by Go Digital to acquire ITI Re. ITI Relay was licensed by the authority in 2016 but was closed down after two years without doing any business.
GIC, India’s only domestic reinsurer, which is also government-owned, is currently the first to receive reinsurance offers from Indian insurers and is taking advantage of compulsory reinsurance (session). Established in 1972, General Insurance Corporation of India was providing non-life insurance business in the Indian market and reinsurance services in the global market including India until 2000. After the Government of India converted it into a full-fledged reinsurance company in 2000, it has now established reinsurance companies in Bhutan and Russia besides India.
