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

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  • Last Updated on 18 April, 2026

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IRDAI obligatory cession

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. 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.

Click Here To Read The Full Notification

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied