TaxTMI 
TaxTMI 
International Financial Services Centres Authority (Managing General Agents) Regulations, 2026
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....neral Agents (MGAs) operating in International Financial Services Centres (IFSCs) in India, which possess delegated authority from the foreign insurer(s) for underwriting direct insurance business or settlement of claims, ensuring they operate with transparency and accountability to protect policyholders' interests and support the orderly growth and development of the insurance ecosystem in the IFSCs. 3. Definitions (1) For the purposes of these regulations, unless the context otherwise requires, the terms defined herein shall bear the meanings as assigned to them below, and their cognate expressions shall be construed accordingly, - (a) 'Act' means the International Financial Services Centres Authority Act, 2019 (50 of 2019); (b) 'Applicant' means - (i) a body corporate incorporated outside India and authorised by foreign insurer(s) under a written contract to manage part of its direct insurance business including solicitation, underwriting risks and/or settling the claims; or (ii) a company incorporated under the Companies Act, 2013 (No. 18 of 2013); Explanation. - For removal of doubts, it is clarified that t....
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....individual who is an employee or director of the MGA engaged in solicitation, underwriting risks and/or settlement of claims of direct insurance business, and who has undergone such training and passed such examination as may be specified by the Competent Authority; (o) 'Net Worth' shall have the same meaning assigned to it in the Companies Act, 2013 (18 of 2013); (p) 'Principal Officer' means a designated employee of the MGA responsible for day-to-day affairs or conduct of its overall activities, including regulatory compliances of an MGA; Explanation.- In case of an MGA set up in form of a branch in the IFSC, the expression 'Principal Officer' shall be construed as 'Branch Head'. (q) 'Specified Foreign Currency' means the currencies specified in the First Schedule of the International Financial Services Centres Authority (Banking) Regulations, 2020, as amended from time to time; and (r) 'Underwriting' refers to the process of accepting or rejecting insurance risk or insurance liability by an MGA on behalf of the foreign insurer. (2) Words and expressions used and not defined in these r....
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....dit rating of 'A' or its equivalent from any of the internationally renowned credit rating agencies for the last three years from the date of filing application under these regulations; (e) is registered or certified in a National Regulatory Environment with whom the Government of India has signed Double Taxation Avoidance Agreement; (f) submits Board resolution undertaking to meet all liabilities arising out of Applicant's operations in the IFSC; (g) submits all the details and information as may be required and complies with any additional requirements as may be specified by the Competent Authority; and (h) submits undertaking(s) to comply with the provisions of regulation 22 of these regulations. (5) The Applicant entity, the foreign insurer(s) and their promoters, partners or controlling shareholders shall be from a jurisdiction which has not been identified in the public statement of Financial Action Task Force (FATF) as "High-Risk Jurisdiction subject to call for action". (6) An Applicant executing or proposing to execute written contract with more than one foreign insurer to manage part of their direct insurance business ....
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....he Competent Authority; (b) whether the Applicant has the requisite underwriting and/or claims processing competence and personnel having necessary qualification and experience, as may be specified by the Competent Authority; (c) whether the Principal Officer, promoters, directors, and KMPs/controlling shareholders are 'Fit and Proper persons' as per the criteria specified by the Competent Authority; (d) whether the Applicant has proposed to appoint a Principal Officer who shall be in direct employment of the MGA and resident in India; (e) whether the Applicant has adequate office space, IT systems, and data security protocols within the IFSC to effectively discharge its activities, that is commensurate with the proposed operations; and (f) whether the issue of certificate of registration to the Applicant will be in the interest of policyholders. 7. Procedure for issuance of Certificate of Registration (1) On consideration of the application, the Competent Authority may grant in-principle approval to the applicant, subject to satisfaction that the Applicant has fulfilled the conditions as specified under sub- regulation (2)....
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....t insurance business; (13) comply with the Code of Conduct as specified under regulation 18 of these regulations; (14) maintain such books of accounts as specified under these regulations; (15) ensure that its shares held by any of its shareholder are not pledged to secure any form of credit facilities, and remain unencumbered at all times; and (16) any other condition(s) as may be specified by the Competent Authority. 9. Commencement of business- (1) An MGA shall commence business within a period of one hundred eighty (180) days from the date of grant of certificate of registration by the Competent Authority; Provided that, if an MGA fails to commence business within the said period, it can, before the expiration and at least thirty (30) days prior to such expiry, make an application to the Competent Authority seeking extension of time. (2) Upon receipt of an application under sub-regulation (1), the Competent Authority may examine the same and communicate the decision there on, in writing to such applicant; Provided that no extension of time shall be granted by the Competent Authority beyond eighteen (18) months from the date of grant of certificate of ....
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....parent level. (4) In case of any shortfall in Net Worth as required under sub-regulation (3) above, the MGA shall immediately restore the same and report compliance of the same within a period of fifteen (15) days to the Competent Authority. (5) The investment made by the promoters/ shareholders in an MGA shall be from their owned funds and not from any other sources; Explanation. - For the purpose of this sub-regulation, owned funds shall not include funds arranged by way of borrowings or loans. (6) An MGA shall submit a paid-up capital and Net Worth certificate issued by its statutory auditor or an independent Company Secretary on annual basis, to the Competent Authority. 14. Professional Indemnity - An MGA shall purchase and maintain, at all times, a professional indemnity insurance cover throughout the validity of its registration in accordance with the Schedule-III of these regulations; Provided that an MGA in branch form shall maintain the professional indemnity insurance policy at its head office and shall have endorsement on such insurance policy to the effect that liabilities if any, arising out of operations at the IFSC branch office are also covered in ....
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....alled. 18. Code of conduct - An MGA shall perform its functions and duties, and exercise its delegated authority, in strict adherence to the Code of Conduct and operational standards specified in Schedule-II of these regulations. 19. Internal control and systems - An MGA shall develop and maintain a suitable internal control system, including an audit system, commensurate with the size, nature, scale and complexity of its business operations. 20. Binding Authority Agreement (BAA) (1) An MGA shall not solicit business, underwrite risks or settle claims on behalf of a foreign insurer, unless a BAA containing the clauses as specified under Schedule-IV of these regulations is executed with the concerned foreign insurer and submitted to the Competent Authority. (2) The BAA shall, inter-alia, explicitly include the following: - (a) classes of direct insurance business, territorial limits and maximum limits of liability per risk; (b) underwriting guidelines and the basis of rates to be charged; (c) underwriting capacity allocated by the foreign insurer to an MGA; and (d) foreign insurer's right to terminate or suspend the BAA, includi....
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....eir operational oversight- (1) The foreign insurer who has executed the BAA with an MGA shall - (a) conduct an independent annual audit of the records of the MGA to satisfy that the MGA complies with the BAA and the Net Worth requirements as specified under these regulations; and (b) conduct an on-site review of the MGA's underwriting and claims processing at least on a half yearly basis. (2) If an MGA establishes loss reserves, the relevant foreign insurer shall annually obtain the opinion of an independent actuary certifying their adequacy. Explanation. - For removal of doubts, it is clarified that the above requirement shall be in addition to any other required loss reserve certification. (3) The foreign insurer shall not - (a) appoint any officer, director, employee or controlling shareholder of the MGA on its Board; and (b) give binding authority to an MGA of more than ten per cent (10%) of its GWP for the previous financial year. 23. Maintenance of books of accounts and records- (1) An MGA set up in the form of a company shall prepare and maintain the following financial statements- (a) a balance sheet as at t....
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....for such period as specified under the International Financial Services Centres Authority (Maintenance of Insurance Records and Submission of Requisite Information for Investigation and Inspection) Regulations, 2022; Provided that the documents pertaining to the cases where claims are reported and the decision is pending in a Court, the documents shall be maintained till the disposal of the cases; Provided further that unless otherwise required in any other laws for the time being in force, all such financial statements and relevant documents may be maintained in non-editable electronic retrieval form. (10) All financial statements shall include a note providing the foreign insurer-wise (including foreign insurer's group companies) details of all the incomes received by it and also the details of payments received by it from its group companies, associates, and related parties. (11) An MGA shall make disclosures of all related party transactions in its audited financial statements. (12) An MGA shall have robust cyber security and cyber resilience framework in accordance with the requirements as may be specified by the Authority from time to time. CHAPTER V ....
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....cquisition or transfer of business of the MGA, shall be in such form and manner as specified by the Competent Authority. 28. Sale of insurance through digital modes (1) An MGA may enter into an agreement with foreign insurers for sale of insurance products online by linking to the web portals of the foreign insurers or by establishing insurance self-network platform. (2) An MGA may solicit insurance through digital modes subject to such conditions as may be specified by the Competent Authority. (3) The procedure for sale of insurance products where leads are generated through online or off-line and completed through tele-marketing mode by MGA shall be as specified by the Competent Authority. CHAPTER VI MISCELLANEOUS 29. Fee - (1) The Applicant while filing application seeking registration as an MGA shall pay non-refundable fee of USD 1,000 (USD One thousand only) as application fees, to the Authority. (2) Upon communication the Applicant shall pay non-refundable fee of USD 5,000 (USD Five thousand only) as registration fees, to the Authority. (3) An MGA who has been granted certificate of registration under these regulations shall pay higher of the ann....
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....n all respects, shall be processed within sixty (60) days from the date of its receipt, or receipt of the responses to the clarifications sought by the Competent Authority, if any. (4) The Competent Authority shall dispose of the application received under sub-regulation (2), by recording the reasons in writing for acceptance or refusal of relaxations sought by the applicant. 33. Power to Inspect and Investigate - The Competent Authority shall have the power to inspect the financial statements, relevant documents and premises of the MGA at any time without prior notice, and may call for any information from the MGA or the Applicant, so far as it relates to its activities as MGA. 34. Action in case of default and manner of suspension or cancellation of Certificate of Registration- (1) The Competent Authority may take appropriate action as it deems fit, including suspension or cancellation of the registration of an MGA, after due notice and giving it a reasonable opportunity of being heard, if it, inter-alia - (a) violates the provisions of the applicable laws; (b) fails to furnish any information relating to its activities as an MGA as required by the C....
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....interests of the insurance ecosystem in the International Financial Services Centres, the Competent Authority may take appropriate action against it. (3) Without prejudice to the above, the Competent Authority may take any other action as it deems fit, under the Act and Insurance Act, 1938 (4 of 1938). 35. Manner of holding enquiry for suspension or cancellation of Certificate of Registration- (1) The certificate of registration of an MGA shall not be suspended or cancelled unless an enquiry has been conducted in accordance with the procedure specified in this regulation. (2) For the purpose of holding an enquiry under this regulation, the Competent Authority may appoint an enquiry officer within fifteen (15) days of the initiation of the proceedings; (3) The enquiry officer shall issue a notice to the MGA electronically or at the registered office or the principal place of business of the MGA, calling for all data, documents or information as deemed necessary to conduct the enquiry; (4) An MGA may, within twenty-one (21) days from the date of receipt of such notice, furnish to the enquiry officer a reply to the notice together with copies of documentary or other ....
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.... the certificate of registration of the MGA, and it shall cease to act as an MGA from the date of the final order; Provided that, an MGA whose certificate of registration has been suspended or cancelled shall continue to service the contracts already concluded through it for a period of six months, within which it shall make suitable arrangements for having the existing contracts attended to by another MGA registered under these regulations. (2) The Competent Authority on suspension or cancellation of certificate of registration may pass such order as it thinks fit for the disposal of the deposit of the MGA made under regulation 15 of these regulations. (3) An MGA who agrees to take over the obligations of policy service from the MGA whose certificate of registration is suspended or cancelled, shall submit its request to the foreign insurer for serving the policies / contracts throughout the policy term. (4) An MGA, upon obtaining the approval from the foreign insurer in terms of sub-regulation (3), can collect remuneration on subsisting contracts with prospective effect from the date of service of the contracts. (5) The foreign insurer shall pay remuneration / polic....
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.... (4) After the omission of provisions related to Managing General Agent (MGA), any reference thereto in any other regulations made, guidelines or circulars issued thereunder by the Authority, any act of the Government of India or laws enacted by other statutory authorities shall be deemed to have the reference to the corresponding provisions of these regulations. (5) Save as otherwise contained in sub-regulations (1) and (2), the circulars or guidelines issued by Competent Authority under the omitted provisions, shall be deemed to have been issued under these regulations unless and until they are specifically superseded or modified by the Competent Authority. Schedule-I 'Functions and activities of MGA' 1. Underwriting and Risk Selection - (1) Risk Assessment and Acceptance within BAA limits: Evaluation of risks through sophisticated modelling and selection processes to ensure alignment with the foreign insurer's Underwriting Policy. (2) Binding Authority: Exercising delegated authority to bind risks, issue binders, and execute insurance contracts within the limits specified in the BAA. (3) Pricing Mechanism: Development and appli....
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....tiating settlements for complex or high-value losses within the technical parameters set by the foreign insurer. (3) Settlement Authority: Finalizing and issuing claim payments to policyholders or third-party claimants from the Fiduciary Account, provided such payments fall within the MGA's delegated financial authority subject to a monetary limit per claim and an aggregate limit. MGA may send specific claim files to the foreign insurer if they exceed set limits or involve coverage disputes. Schedule-II 'Code of conduct of MGA' 1. Integrity and Professionalism - (1) High Standards: An MGA shall act with high standards of integrity, dignity, and fairness in all its dealings. (2) Fiduciary Duty: An MGA shall owe its primary fiduciary duty to the foreign insurer. In fulfilling this duty, the MGA shall simultaneously ensure a secondary duty of fairness and transparency to the policyholder. (3) Due Care and Diligence: An MGA shall act with appropriate skill, care, and diligence in the exercise of its delegated authority, particularly in underwriting and claims management. 2. Conflict of Interest and Governance (1) Boar....
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....nsure strict adherence to the BAA. Schedule-III PROFESSIONAL INDEMNITY (PI) REQUIREMENTS 1. Mandatory Maintenance of PI Insurance - (1) Commencement of Cover: An MGA shall, at all times, maintain a Professional Indemnity (PI) insurance policy from its date of registration. (2) Scope of Coverage: The policy shall provide cover for legal liabilities arising from any act, error, or omission committed by the MGA, its employees, or its appointed representatives in the conduct of authorized business activities. The policy shall provide for cyber liability Insurance. 2. Tiered Minimum Limits of Indemnity - (1) An MGA shall maintain limits of indemnity both at individual claim level and aggregate that are proportionate to its scale of operations and potential risk exposure. (2) The limits shall be determined, having regard to the calculated percentage of annual income. (3) Currency Alignment: If a policy is denominated in a currency other than USD, the MGA shall ensure that the limits are equivalent to the mandated USD amounts at the time of each renewal. (4) Review Mechanism: These limits shall be reviewed by the MGA Board ....