IRDAI Fixes 4% Obligatory Cession for 2026–27 to General Insurance Corporation

Notification F. No. IRDAI/RI/ 3/217/2026, Dated 09.04.2026

The Insurance Regulatory and Development Authority of India (IRDAI) has notified the obligatory cession requirements for the financial year 2026–27 under Section 101A of the Insurance Act, 1938.

1. Mandatory Cession Requirement

• Insurers must cede:

1. 1. 4% of the sum insured
   2. On each general insurance policy

• The cession is to be placed with general Insurance Corporation of India (GIC Re)

2. Terms and Conditions Prescribed

The notification also lays down:

• Commission rates payable on such cessions
• Profit-sharing arrangements
• Other operational terms and conditions governing the cession

3. Exclusions from Cession

The following are excluded from the scope of obligatory cession:

• Terrorism pool premiums
• Nuclear pool premiums

4. Objective of Obligatory Cession

The framework aims to:

• Strengthen domestic reinsurance capacity
• Support GIC Re as the national reinsurer
• Ensure risk retention within the Indian insurance ecosystem

5. Conclusion

The notified cession requirements for FY 2026–27 reinforce IRDAI’s objective of enhancing domestic risk management capabilities, while maintaining a structured and regulated reinsurance framework.

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