The Insurance Regulatory and Development Authority of India (IRDAI) on April 13, 2026, issued a notification regarding the Obligatory Cession for the financial year 2026-27.
The following has been stated: -
•The notification mandates an obligatory cession of 4% of the sum insured on each general insurance policy to Indian reinsurers for FY 2026–27, applicable from April 01, 2026, to March 31, 2027, with exceptions for terrorism and nuclear pool premiums (nil cession).
•The entire cession must be placed only with General Insurance Corporation of India (GIC Re).
•There is no upper limit on the sum insured for such cessions, and insurers must provide underwriting details when specified thresholds are exceeded. Minimum commission rates are prescribed for different segments, with flexibility for mutual agreement on higher commissions.
•Additionally, profit commission is to be shared 50:50 between the reinsurer and insurer based on portfolio performance after accounting for losses, expenses, and margins.
The detailed notification is given in the document below.
[Notification No.: F. No. IRDAI/RI/ 3/217/2026]
