IRDAI OKs general insurers' obligatory cession at 4% of insured sum for FY27
This story was originally published at 17:26 IST on 17 April 2026
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NEW DELHI – The Insurance Regulatory and Development Authority of India retained the obligatory cession for general insurance companies at 4% of the sum insured per policy for 2026-27 (Apr-Mar), the regulator said in a notification. This mandates that 4% of the sum insured on every general insurance policy must be ceded to Indian reinsurance companies, specifically General Insurance Corp. of India, in the current financial year.
Terrorism premiums and nuclear pool premiums are excluded from the obligatory cession requirement, according to the notification. The regulator has set the commission on obligatory cession for various insurance classes between 5% and 15%.
The notification also introduced a profit commission mechanism, requiring insurers to share profits on a 50:50 basis with re-insurers. But this would be according to defined parameters such as the loss ratio of the last three years, assuming management expense at 12%, profit margin at 5%, and commission at 12.5%. End
Reported by Krity Ambey
Edited by Akul Nishant Akhoury
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