Corona Virus Contribution…


As the world is facing the serious issue of Corona virus and most of the countries have imposed nationwide lock down, the number of cases of this pandemic seems unstoppable. The total number of cases of Covid-19 had surpassed 4.5 million and is inching towards 5 million mark. No body knows, when this will come to a halt. Total number of deaths due to Covid-19 is 313,759 (at the time of writing this article) and it may not be unprecedented if deaths increases in near future. It’s rare to see any country free from Corona virus pandemic at this point of time. United States had suffered the most, both in terms of number of cases and deaths. In fact, the total number of cases in US had surpassed 1.5 million and number of deaths had crossed 90,000 mark. Every country is working on in their capacity to have some cure in near future, including the vaccine.

Needless to say, be it small or big county (in terms of population), Covid-19 has compelled the world to “Stand-still, and India is no more exception. India, the 2nd largest country of the world (in terms of population), has been also hit badly due to this Corona virus pandemic. The country is in lock down for almost two months now and it may continue. Lock down 4.0 has been imposed as well and has been extended to 31st May, 2020. Due to large population and population density, the risk of community spread is very high in India, especially in major cities where population density is highest.  Mumbai has the largest number of cases in India and the city which never slept and stopped, came to halt. This is the case with all the major cities in India. Most of the services has stopped functioning in India except the essential services due to Covid-19. As of now, the total number of Covid-19 cases in India is over 91,000. The increase in number of cases in recent days is a matter to worry. The first case in India was reported on 30th January, 2020 from Kerala. There were 62 cases on 10th March and 1251 cases on 30th March. The current tally stands at 91,449 (at the time of writing this article). Let’s look at the number of cases and deaths in India.

Table: Total No of Corona Cases and deaths in India as on selective dates
Date Total No of Cases Total No of deaths
26th Feb 2020 3 0
10th Mar 2020 62 0
30th Mar 2020 1,251 32
10th Apr 2020 7,600 249
25th April 2020 26,283 825
1st May 2020 37,257 1,223
5th May 2020 49,400 1,693
10th May 2020 67,161 2,212
15th May 2020 85,784 2,753
16th May 2020 90,648 2,871
Source: https://www.worldometers.info/coronavirus/country/india/

Look at the above figures carefully, the number of cases and deaths have more than doubled from 1st May to 16th May 2020. There were 4,864 new cases reported on 16th May, the highest number of cases reported in a day so far. Although, India has a good recovery rate so far as compared to other countries, due to proactive lock down and other steps taken by the government. But, the above figures are matter of concern as the total number of cases in inching towards 100,000.

Testing of Covid-19 should be also taken into consideration. As of now (at the time of writing this article), there are 22,27,642 tests have been conducted. The total number of Corona cases comes out to be 4.1% of the total tests conducted. India with over 1.3 billion population, the number of tests conducted so far is not even 0.5% of the total population. Now consider the testing conducted on at least 1% of the total population which comes out to be around 1,30,00,000 and applying the same assumption, the total number of Corona cases comes out to be around 533,000 (4.1% of 1,30,00,000 = 533,000). Similarly, if the tests are conducted for at least 10% of the country’s population, you can imagine the number of cases which comes out to be over 1 million. That’s why it is a matter of concern, considering the fact, India lacks well and proper health infrastructure.

Since this is a pandemic situation and the country had suffered and may suffer serious economic loss post the Covid-19 era. But we don’t know when this will end. As most of the economic activities had stopped, the country Gross Domestic Product (GDP) will fall drastically. The International Monetary Fund (IMF) too had predicted the same. Most of the population of India works in unorganized sector and this sector has been hit the worst. Daily wages labours have no work and they are migrating to their home-town and the saddest part is, they are losing their lives. I am amazed and saddened to hear accidents are happening in this lock down situation (God knows how and why during lock down), killing innocent people.  People are dying due to hunger and accidents. Kids are crying in front of dead bodies of their parents and our so-called intellectual leaders are leaving no stone unturned to do politics on it… Sorry to say but that’s the fact…

PC: Google

There are also information coming from many companies that they are doing salary deduction due to Covid-19 situation, be it big corporates or small companies. The salary deduction ranges from 5% to 50%. This is shocking. Employees main source of income is their salary and work from home is in practice right now, then why salary deduction? It is shocking to see that some of the big names who used to give lectures on crisis management doesn’t have enough reserves to pay their employees. It may not be shocking to see high number of lay-offs and termination during or post Corona era.

The other contribution of this Covid-19 is on Stock market. Both Nifty 50 and Sensex fell. Currently, Nifty 50 is trading below 10,000 mark and it is important to note that it touched 7600 mark on 23rd March 2020. Same is the case with Sensex. Sensex is trading below 40,000 and it was trading just below 26,000 on 23rd March 2020 and currently trading just above 30,000. Nifty 50 and Sensex are the two most important stock indexes of India, traded on National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) respectively.

To summarize, some of the Corona Virus contribution includes:

  • Pandemic situation across the country and world.
  • Large number of deaths.
  • Unorganized sector worst hit in India.
  • Economic activities stopped.
  • Daily wages labours and their families are badly affected.
  • Innocent deaths due to accidents and hunger.
  • Illogical politics.
  • Salary deductions.
  • Phase-wise lock down.
  • Stock market down.

It is hard time and we must unite to tackle this situation. Please share your views on what you think on the current Covid-19 situation and what according to you is the contribution of Covid-19 apart from what is mentioned above.

– Ashish Kumar

It requires Courage to commit SUICIDE…


Death is the ultimate truth as it is one of the rarest events which is certain to happen in life. He who are born will surely die as nobody is immortal. There can be many reasons of death like malnutrition, hunger, disease, injury or accidents, death due to natural calamity etc. One of the other reasons for death is suicide. Suicidal death is a serious concern which is rarely discussed and debated. Death is certain but committing suicide is right or wrong? This question is debatable and is subjective in nature. Needless to say, Suicide is a crime and this crime is not punishable unlike others. Suicidal deaths happen across the globe. In this article, I have tried to cover this burning topic of suicidal deaths.

India is a large country both in terms of area and population and the country had faced and is facing many issues. The question arises whether suicide is an issue? Looking at the suicidal death figures, one can get the glimpse of it. The statistics mentioned in this article is based on the Accidental Deaths and Suicides in India (ADSI) 2015 report published by National Crime Record Bureau (NCRB), Ministry of Home Affairs, Govt. of India. In fact, suicidal deaths in India is more than 130,000 per year as per the NCRB data. Let’s look at the suicidal deaths from 2011 to 2015 as mentioned in below table:

Table 1: Suicidal deaths in India
Year Suicidal Deaths
2011 135,585
2012 135,445
2013 134,799
2014 131,666
2015 133,623
Source: Accidental Deaths and Suicides in India (ADSI) 2015 published by National Crime Record Bureau (NCRB), Ministry of Home Affairs, Government of India

As it can be inferred from the five years data, suicidal deaths in India is more than 130,000 per year. In fact, the average suicidal deaths for the above mentioned five years comes out to be 134,223 per year. Further, calculating the average suicide in a day from 2011-2015, it comes out to be 368 (134,223 / 365 = 368). It means 368 people are committing suicide in India on daily basis. Further, 15 people commit suicide per hour (368/24 = 15).

Breaking it further, incidence of suicidal deaths is not distributed equally throughout the country. Some states have large number of suicidal deaths and some have few. In fact, it is largely concentrated in few states. In the year 2015, Maharashtra, Tamil Nadu and West Bengal were top 3 three states in suicides as mentioned in below table:

Table 2: Top 10 states in suicidal deaths in the year 2015
State Suicidal Deaths Percentage Share
Maharashtra 16970 12.7%
Tamil Nadu 15777 11.8%
West Bengal 14602 10.9%
Karnataka 10786 8.1%
Madhya Pradesh 10293 7.7%
Telangana 10140 7.6%
Kerala 7692 5.8%
Gujarat 7246 5.4%
Chhattisgarh 7118 5.3%
Andhra Pradesh 6226 4.7%
Source: Accidental Deaths and Suicides in India (ADSI) 2015 published by National Crime Record Bureau (NCRB), Ministry of Home Affairs, Government of India

Maharashtra accounted for 12.7% of suicidal deaths in India in 2015 followed by Tamil Nadu and West Bengal with 11.8% and 10.9% of suicidal deaths respectively. Karnataka and Madhya Pradesh accounted for 8.1% and 7.7% of suicidal deaths respectively. Combining these top five states, they accounted for 51.2% of suicides reported in the country, in 2015, and rest of India reported 48.8% suicides. It is important to note from the above table that Uttar Pradesh which is the most populated state (17% of country’s population) in the country is not in the top 10 list. In fact, Uttar Pradesh had reported comparatively lower percentage share in terms of suicidal deaths, accounting for only 2.9% of the total suicidal deaths in the country in 2015.

Apart from the top states with suicides, let us have a look at the major cities in India where suicidal deaths are in ample amount which is mentioned in below table:

                                Table 3: Top 10 Major cities with suicidal deaths in the year 2015
City Suicidal Deaths
Chennai 2274
Bengaluru 1855
Delhi 1553
Mumbai 1122
Pune 873
Ahmedabad 869
Hyderabad 728
Surat 663
Indore 528
Nagpur 483
Source: Accidental Deaths and Suicides in India (ADSI) 2015 published by National Crime Record Bureau (NCRB), Ministry of Home Affairs, Government of India

Chennai heads the top of the list when it comes to suicides in major cities followed by Bengaluru and Delhi. There were 2274 suicides in Chennai in 2015 followed by Bengaluru and Delhi having 1855 and 1553 suicides respectively in 2015. As we know, New Delhi is the capital and Mumbai is the financial capital of India, Chennai can be said as the “Suicidal Capital”, on a lighter note. All the major cities like Chennai, Bengaluru, Delhi, Mumbai etc have reported more than 1000 suicides in 2015.

The Big Picture

One important characteristic of human being is courage and courage is required many times in life. There are many adventures which people like to do which requires courage. Courage is required in taking tough decisions and tackling unwilling situation. In fact, it is often required to take daring and courageous decisions in life.

When a soldier is fighting with the enemy, he must be fearless and courageous to defend his nation. When a student disqualifies in his exams or job recruitment, he should fight back with proper preparations which requires strong determination. Imagine a situation where nothing is in your support (financial, moral or familiar) and you are determined to pursue your goals going against everyone, taking such kind of decision require immense courage. When farmers bow seeds in rainy season, courage is required. There are many famous personalities across the globe who have proved themselves with their strong determination and courageous decisions.

Having said that, what makes people to commit suicide. What makes them to take such decision? It can be poverty, love affairs, unemployment, hunger, financial problem etc. As per the ADSI report, 27.6% of suicidal deaths in 2015 happened due to family problems. The other causes of suicides are mentioned in below table:

Table 4: Percentage share of Various causes of Suicides during 2015
Causes Percentage Share
Family Problems 27.60%
Illness 15.00%
Causes not known 12.10%
Marriage related issues 4.80%
Love affairs 3.00%
Bankruptcy or indebtedness 3.30%
Drug Abuse/Addiction 2.70%
Unemployment 2.00%
Failure in Examination 2.00%
Other Causes (Poverty, Physical abuse, Professional/Career problem etc) 26.20%
Source: Accidental Deaths and Suicides in India (ADSI) 2015 published by National Crime Record Bureau (NCRB), Ministry of Home Affairs, Government of India

From the above table, it can be inferred that family problem was the major cause of suicides in 2015. Tamil Nadu recorded the highest number of suicides due to family problems. There were 7377 suicides due to family problems in Tamil Nadu in the year 2015. The second most cause of suicide is illness accounting for 15% of total suicides. Unemployment and failure in exam accounts for 2% separately.

From the statistics discussed above on number of suicides and causes of suicides, suicide is a major concern, but it is rarely discussed and debated. There are many problems one faces in his life but ending own life solves the problem?

Committing suicide requires enormous courage. Every decision in life requires some courage but committing suicide requires the most. Ending one’s own life is not feasible and suicide cannot be the solution of any problem. Think the other way around. If someone has the courage to decide to commit suicide, why can’t that courage should be used to solve the problem? There are some points which I would like to raise…

  • Committing suicide requires courage. Why that courage is not used to solve the problems which compels the person to commit suicide?
  • Ending one’s life and leaving the family members alone is good?
  • Committing suicide is the toughest decision and if someone can take such decision which requires enormous courage, that courage should be used to tackle the situation which compelled the people to commit suicide.
  • The person who commits suicide leaves a forever pain to his near and dear ones. The person who commits suicide gets rid of the problem, but his family suffers for long. A void is created which is impossible to fill.
  • India, where 368 people and 15 people commit suicide on daily basis and hourly basis respectively, why this issue is not raised and what can be the solution to minimize the same?

What is your take on suicide? Is it justifiable to end own life or that courage should be utilized to solve the issue? While reading this article of mine, some of you may think that I am being philosophical by raising such query but frankly speaking, this is a concern which was in my mind for many years and hence thought of putting before you. In fact, I have raised this issue in one of my previous articles titled “Suicide – Right or wrong?”, the same can be read here.

Please share your views. Would be happy to have insights from all of you on this rarely discussed issue.

– Ashish Kumar

Being Republic…



Top post on IndiBlogger, the biggest community of Indian Bloggers

Country with lots of diversity and culture.
Where people worship God, rivers, mountains and nature.
Life and taste vary with every distance.
People are still connected despite of living distant.
The country which suffered several atrocities.
Now shining politely with its glory.

PC: Google

Shining the tricolour in the sky.
Makes us to capture the sky.
Saluting the tricolour, let’s take an oath.
We will stand for each other’s support.
Contributing from our day to work.
We will make our country, best place to work.
Contribution and effort are required from the general public.
We all should take this oath on 26th January, the day of Republic.
India is the land of resource and opportunity.
Here foreigners and saints come to find serenity.
Country with lots of diversity and culture.
Where people worship God, rivers, mountains and nature.

– Ashish Kumar

Cricket World Cup 2019 – A Recap…


The ICC Cricket World Cup 2019 hosted by England and Wales concluded on 14th July, 2019 with England being crowned as a new Cricket world champion. It all started on 30th May, 2019 when the battle of becoming world champion began with inaugural match played between England and South Africa. There were total 48 matches played in this 12th edition of ICC Cricket World Cup 2019 starting from 3oth May to 14th July.

This World Cup gave a new champion after 23 years when Sri Lanka won the World Cup in 1996. England is the new World Champion in Cricket. In the past, England reached world cup final at three occasions but were unable to defeat the opponent. In 2019, England reached final for the fourth time and managed to become World Champion for the maiden time creating a history. Australia had won World Cup for the maximum number of times followed by West Indies and India.  Team wise number of world Cup wins are given in below table:

No of times World Cup win Team Year
5 Australia 1987, 1999, 2003, 2007 & 2015
2 West Indies 1975 & 1979
2 India 1983 & 2011
1 Pakistan 1992
1 Sri Lanka 1996
1 England 2019
Source: International Cricket Council (ICC)

As it can be inferred, Australia had dominated the Cricket World Cup with maximum wins of five times and it is the only country having three consecutive World Cup wins (1999, 2003 & 2007). India won two times in 1983 and 2011. India reached both 2015 & 2019 world cups  semi-final but couldn’t convert it to the finals. India had a close encounter with New Zealand cricket team in 2019 semi final  where later defeated India by 18 runs to enter the World Cup final. The second semi-final between England and Australia was totally dominated by English team who crushed Australia by 8 wickets and paved the way for the historical final at Lord’s.

2019 Cricket World final, played between England and New Zealand was thrilling, interesting and competitive in nature where both teams were putting their all effort to win for the maiden time. Cricket fans across the globe were witnessing the history being made at Lord’s Cricket ground; also known as “Mecca of Cricket”. New Zealand won the toss and decided to bat first setting a target of 241 for England to win. England started to chase the target with early breakdown of 86 for four wickets and game was in the New Zealand favor. Then came Ben Stokes and Jos Butler, their valuable partnership turned the match in the England favor till fall of Butler’s wicket.  Again the ball was in New Zealand favor but Ben Stock  took the game till the last ball of the match and the scores were labeled which made to go for Super Over and England made 15 runs in the Super Over, giving New Zealand target of 16 runs to win. New Zealand made 15 runs in the Super Over and the score were labeled again. England won by the number of boundaries rule as their number of boundaries was more than New Zealand. England created history by winning the Cricket World Cup for the maiden time.  Also, for the first time in the Cricket World Cup history, Super Over was used to decide the winner. This World Cup final was outstanding…

Finally, Cricket won…

Congratulations to the England team for their maiden World cup win and also congratulations to the New Zealand team for winning hearts of millions of Cricket fans.

– Ashish Kumar

Understanding Insurance Penetration


Two of the most important and mostly used terminologies in insurance industry throughout the globe are insurance penetration and insurance density. In fact, these two are also used to compare the insurance industry of various countries and plays an important parameter for judging the insurance growth in any economy. In this post, I will discuss about Insurance penetration and will try to a make readers understand about the same and will be discussing Insurance density in a separate post.

Insurance Penetration: Technically, Insurance Penetration is the ration of premium underwritten in a particular year to the Gross Domestic Product (GDP) of the country and is expressed as a percentage. In other words, insurance penetration is the percentage contribution of the insurance sector to the GDP of the country. Let us understand with an example. Suppose the total premium underwritten in a Financial Year in a country is INR 1,00,00,000 and the GDP of the country of that Financial Year is INR 50,00,00,000. To calculate the insurance penetration, divide the premium underwritten to the GDP which means, (1,00,00,000/50,00,00,000 = 0.02) and expressing this as a percentage will come up to 2% (0.02*100 = 2). This means, the insurance penetration is 2%. Insurance Penetration is widely used and you will encounter this jargon in almost every insurance journals, reports, research papers etc.

As per the latest Insurance Regulatory and Development Authority of India (IRDAI) Annual Report 2017-18, the insurance penetration of India in 2017 was 3.69% which is a slight increase from 3.49% in 2016. Further, the insurance penetration can be segregated in to life insurance and non-life insurance. As per IRDAI Annual Report, the life insurance penetration and non-life insurance penetration of India in 2017-18 were 2.76% and 0.93% respectively.  For 2016-17, life insurance penetration and non-life insurance penetration were 2.72% and 0.72% respectively. This indicates a marginal increase in life insurance and non-life insurance penetration from 2016-17 to 2017-18. Let’s look at the insurance penetration of some of the countries which is given in the following table:

Insurance Penetration of selected countries (in %)
Country Year 2016 Year 2017
Life Non-Life Total Life Non-Life Total
Taiwan 16.65 3.34 19.99 17.89 3.42 21.32
Hong Kong 16.2 1.41 17.6 14.58 3.36 17.94
South Africa 11.52 2.74 14.27 11.02 2.74 13.75
South Korea 7.37 4.72 12.08 6.56 5 11.57
United Kingdom (UK) 7.58 2.58 10.16 7.22 2.36 9.58
France 6.06 3.17 9.23 5.77 3.18 8.95
Japan 7.15 2.37 9.51 6.26 2.34 8.59
Switzerland 4.72 4.12 8.85 4.41 4.12 8.53
Singapore 5.48 1.67 7.15 6.64 1.58 8.23
India 2.72 0.77 3.49 2.76 0.93 3.69
World 3.47 2.81 6.28 3.33 2.8 6.13
Source: Swiss Re, Sigma volumes, 3/2017and 3/2018

A closure look at the insurance penetration reveals that India is way behind the world average insurance penetration.  Taiwan is the country with highest insurance penetration of 21.32 % followed by Hong Kong and South Africa having insurance penetration of 17.94% and 13.75% respectively. Also, the above table reveals that Switzerland is the country where the gap between life and non-life insurance penetration is minimum. In fact, Switzerland has a proper distribution of life and non-life insurance business and both life and non-life insurance has almost equal contribution to the country’s GDP.

Insurance penetration is an indicator of growth of insurance sector for any economy in a particular year. It is widely used as a comparative tool to measure and compare insurance industry among various countries and hence knowing and understanding of insurance penetration is beneficial for all of us. Hope I was able to make you understand this jargon in simple terms. 🙂

Ashish Kumar

IRDAI (Reinsurance) Regulations, 2018


The Insurance Regulatory and Development Authority of India (IRDAI) came up with the reinsurance regulations recently in December 2018. This is a first kind of regulation of its type, specific to reinsurance repealing IRDAI (General Insurance – Reinsurance) Regulations and IRDAI (Life Insurance – Reinsurance) Regulations which were released in 2016. This regulation will be called as IRDAI (Reinsurance) Regulations, 2018 which will be effective from 1st January 2019. This article will provide some of the insights of this newly released regulation covering some of the basic terminologies, areas like Cross Border Reinsurer (CBR), cession limit, amendment to previous regulations etc.

There are total 12 regulations contained in IRDAI (Reinsurance) Regulations, 2018. Some of the important points which need to be known from these regulations are as follows:

  • Reinsurance Program: Every insurer need to have a reinsurance program with the objective of having maximum retention within the country. The Board approved reinsurance program need to be submitted to the IRDAI before 45 days of the commencement of the financial year. For any changes made to the reinsurance program, insurer need to submit the final board approved reinsurance program within 30 days of the commencement of the financial year. The reinsurance program along with the retention policy (discussed below) need to be submitted to the Authority i.e IRDAI. (Regulation 3)
  • Retention Policy: The first objective of reinsurance as stated in these regulations, is to maximize retention within the country. Keeping this objective in mind insurers need to formulate a retention policy. Every Indian insurer shall maintain the maximum possible retention in commensuration with its financial strength, quality of risks and volume of business ensuring that the reinsurance arrangement is not fronting. (Regulation 3). Life Insurer should maintain a minimum retention of
  1. 25% of sum at risk under pure protection life insurance business portfolio
  2. 50% of sum at risk under other than pure protection life insurance business portfolio

The retention policy also states that “Every Indian Reinsurer shall maintain a minimum retention of 50% of its Indian business”, as mentioned in Regulation 3(2)(C) .

  • Fronting: This is one of the confusing jargons used in reinsurance. Let us try to understand this with an example. An insurer is having motor portfolio and what it does is instead of keeping some portion of risks within itself, the insurer transfers most or all part of the risks to a reinsurer, thus relieving itself from the financial burden. This is an example of fronting. Insurer transferring most or all portion of risks to reinsurers. Generally, new insurers use fronting as a risk transfer tool in order to reduce their financial burden at the time of claims. Fronting is defined as a process of transferring risk in which an Indian Insurer cedes or retro-cedes most of or all of the assumed risk to a Re-insurer or retrocessionaire. (Regulation 2(13))
  • IIOs: IIOs is an acronym of International Financial Service Center (IFSC) Insurance Office. This means a branch office of an insurer or reinsurer domiciled in India or outside, which has been granted a certificate of registration by the Authority to set up its office in IFSC-SEZ, to transact insurance business or reinsurance business or both. IIO has been defined in Regulation 2(17) of these Regulations. This is a new concept which specifies setting up of offices in IFSC Special Economic Zone (SEZ).
  • Foreign Reinsurer Branch (FRB): This means a branch of a Foreign Reinsurer who has been granted certificate of registration by the Authority under the Insurance Regulatory and Development Authority of India (Registration and Operations of Branch Offices of Foreign Reinsurers other than Lloyd’s) Regulations, 2015 or Insurance Regulatory and Development Authority of India (Lloyd’s India) Regulations, 2016, as amended from time to time.

Cross Border Reinsurer (CBR)

CBR, as the name suggests, means a foreign reinsurers including Lloyd’s Syndicates, whose place of business is established outside India and which is supervised by its home country regulator. CBR includes:

  • Parent or Group companies of FRBs (Foreign Reinsurer Branch)
  • Parent or Group companies of IIOs.

CBR can be understood by an example. Consider an Indian insurer wants to transfer its risk to a reinsurer which is not in India but in United Kingdom (UK). Indian insurer can transfer its risk to UK based reinsurer whose place of business is in UK and not in India. Then the UK based reinsurer is a CBR. In order to transact business through CBRs, there are eligibility criteria which a CBR (like the UK based reinsurer) should have. Indian insurer can place their business through CBRs if CBRs meet the following eligibility criteria as defined in Regulation 4:

  • The CBR is an insurance or Re-insurance entity in its home country, duly authorized by its home country regulator to transact re-insurance business during the immediate past three continuous years;
  • The CBR has a credit rating of at least BBB from Standard & Poor or equivalent rating from an international rating agency during the immediate past three continuous years;
  • The home country of the CBR has signed Double Taxation Avoidance Agreement with India;
  • The CBR has minimum solvency margin or capital adequacy, as specified by the home country regulator, during the immediate past three continuous years;
  • The past claims settlement experience of the CBR is found to be satisfactory;
  • Any other requirements as stipulated by the Authority from time to time.

One of the most important aspects related to CBR is what is known as Cession Limits. Cession means transfer of risks and the insurance company which transfers the risks to a reinsurer is known as Cedant. Cession Limits restricts Indian insurer to transfer risks to CBRs based on the rating of CBRs. The rule is simple; better the rating of CBR, more risk can be transferred and vice-versa. The below table provides the maximum cession limit that can be allowed per CBR as defined in Regulation 6.

Rating of the CBR as per Standard & Poor or equivalent Maximum overall cession limits

allowed per CBR

Greater than A+ 20%
Greater than BBB+ and up to and including A+ 15%
BBB and BBB+ 10%
Note: The above percentages are to be calculated on the total reinsurance premium ceded out-side India.

Reinsurance Placements

Regulation 5 describes the way of placing reinsurance placements. According to Regulation 5(1), every insurer (Cedant) shall be free to obtain best terms for its reinsurance protection of domestic risks, subject to the following:

  • Cedants shall seek terms at least from all Indian Re-insurers, who have been transacting Re-insurance business (other than emanating from obligatory cession) during the immediate past three continuous years and at least from four FRBs. (Regulation 5(1)(A) )
  • No Cedant shall seek terms from IIOs and FRBs having credit rating below A- from Standard & Poor’s or equivalent rating from any other International Rating Agency. (Regulation 5(1)(B)(a) and Regulation 5(1)(B)(b) )

Order of Preference

One of the most important aspects of reinsurance placement in Indian context is Order of Preference which has been revised in IRDAI (Reinsurance) Regulations, 2018. Order of preference means in which order, the insurance company in India should place their reinsurance business. In simple terms, which reinsurers should be given preference while placing reinsurance business? As per Regulation 5(2)(A), every cedant shall offer best terms, for participation in the following order of preference:

  1. to Indian Re-insurers, transacting re-insurance business (other than emanating from obligatory cession) during the immediate past three continuous financial years;
  2. to other Indian Re-insurers and FRBs;
  3. to the IIO as under regulation 5(1)(B)(a) which provided the best and lead terms with capacity of not less than 10%;
  4. to the CBR as under regulation 5(1)(B)(b) which provided the best and lead terms with capacity of not less than 10%;
  5. to other IIOs;
  6. To other Indian Insurers (only Facultative) and CBRs.

A thorough look on the above order of preference interprets that the Indian insurers should give first preference to General Insurance Corporation of India, popularly known as GIC Re as it is the only Indian reinsurer transacting reinsurance business for the past consecutive three financial years.  Other Indian reinsurers and FRBs come at second preference followed by IIOs and CBRs.

Reinsurance placements and order of preference as defined in Regulation 5(1) and Regulation 5(2) are not applicable to the following as defined in Regulation 5(3)

  1. Retrocession or reinsurance placements of Indian Re-insurers, FRBs, IIOs and Insurance Pools;
  2. Existing inter-company arrangements of the Indian Insurers transacting direct insurance business;
  3. Obligatory cessions as notified from time to time under Section 101A of the Act;
  4. Re-insurance placements of Indian insurers transacting life insurance business. However, Indian insurers,transacting life insurance business, shall endeavor to utilize the Indian domestic capacity before offering to the CBRs.

Alternative Risk Transfer (ART) and Domestic Insurance Pool

Insurer can initiate the proposal for an insurance pool which needs to be approved by the IRDAI as defined in Regulation 7. IRDAI approval is required for the formation of domestic insurance pool.

As far as Alternative Risk Transfer (ART) is concerned, there is a provision for ART solutions for Indian insurers as per Regulation 8. Insurers intending to adopt ART solutions need to submit their proposal to the IRDAI and after examining various aspects, IRDAI may grant permission to adopt ART solutions. IRDAI approval is required for adopting ART solutions.

What’s new in IRDAI (Reinsurance) Regulations, 2018

After having a walk through on IRDAI (Reinsurance) Regulations, 2018, let us see what is new in these regulations which are mentioned below:

  • Order of preference revised.
  • Order of preference not applicable for life insurers.
  • Every Indian Reinsurer shall maintain a minimum retention of 50% of its Indian business.
  • Amendment to Regulation 4 of IRDAI (Registration and Operations of Branch Offices of Foreign Reinsurance Other than Llyod’s) Regulations, 2015 which has been changed to, An applicant shall make a requisition for registration application under for Re-insurance business wherein the branch office of foreign Re-insurer shall maintain a minimum retention of 50% of the Indian Re-insurance business.”
  • For FRBs, there is no category as such now. The minimum retention is 50%. An applicant shall make a requisition for registration application for Re-insurance business wherein the branch office of foreign Re-insurer shall maintain a minimum retention of 50% of the Indian Re-insurance business. This removes Category B (minimum retention of 30%) of IRDAI (Registration and Operations of Branch Offices of Foreign Reinsurance Other than Llyod’s) Regulations, 2015.
  • Amendment to Regulation 8 of IRDAI (Llyod’s India) Regulations, 2016 which has been changed as, “An applicant shall make a requisition for registration application for Re-insurance business wherein the Lloyd’s India Syndicate shall maintain a minimum retention of 50% of the Indian Re-insurance business.”
  • Provision for Alternate Risk Transfer (ART).

I have attached the IRDAI (Reinsurance) Regulations, 2018 below. One can download the regulation for their reference.

IRDAI (Reinsurance) Regulations 2018

Ashish Kumar

Suicide – Right or wrong?


Suicide, the word seems to be little awkward and is generally considered to be a crime. There can be many reasons to commit suicide. This article highlights one of the major problems i.e suicide which is rarely discussed.

India reported 1,33,623 suicidal deaths in the year 2015 as per the National Crime Records Bureau (NCRB), Ministry of Home Affairs, Government of India. This figure is strange as more than a lakh people committed suicide. Out of the total suicide, female suicide accounted to 42088 and male suicide were 91528 and rest 7 were transgender. Let us look at some statistics of suicides in India as illustrated in the following table which highlights the top 10 suicidal states.

Table 1: Suicidal deaths in top 10 states in the year 2015
State Suicidal Deaths
Maharashtra 16970
Tamil Nadu 15777
West Bengal 14602
Karnataka 10786
Madhya Pradesh 10293
Telangana 10140
Kerela 7692
Gujarat 7246
Chattisgarh 7118
Andhra Pradesh 6226
Source: National Crime Records Bureau (NCRB), Ministry of Home Affairs, Government of India.

As it can be interpreted from the above table, Maharashtra, Tamil Nadu and West Bengal are leading in suicidal deaths. The above table also states that the problem of suicide is present throughout India from north to south, west to east which is an alarming situation. Let us look at the top 10 major cities in India having a wide number of suicidal deaths which is illustrated in the following table.

Table 2: 10 major cities with suicidal deaths in the year 2015
City Suicidal deaths
Chennai 2274
Bengaluru 1855
Delhi 1553
Mumbai 1122
Pune 873
Ahmedabad 869
Hyderabad 728
Surat 663
Indore 528
Nagpur 483
Source: National Crime Records Bureau (NCRB), Ministry of Home Affairs, Government of India.

From the above table, Chennai is the leading city with highest number of suicidal deaths and can be said as the suicidal capital of India. The five major cities of India namely Delhi, Mumbai, Chennai, Bengaluru and Hyderabad are in the list of top 10 cities having suicidal deaths.

There can be many reasons for suicide. Some of the reasons can be work pressure, extra marital affairs, love failure, household atrocities, depression, stress, no hope for survival, examination pressure of failure, hunger, lack of basic amenities to live, poverty etc. However, the exact reason behind people committing suicide is difficult to find. Some people say that it is the state of mind which allows people to take such step. Yes, it is the mind who decides what to do and what not to do and it is ultimately the decision of people who go to end their life. This is startling but is the harsh reality.

Life is precious and should be lived and enjoyed while facing the bad moments. Nothing lasts forever, whether it is good or bad. Approach should be to fight and not to quit and end up one’s life. One needs to be strong enough to tackle the situation. It’s amazing to know that there are cases where people come to end up their life if failed in some activities which they have desired most. But is committing suicide is right? Life doesn’t end if you fail.

Please share your views on suicide. Those who commit suicide, is it right or wrong? What according to you is the reason behind committing suicide and what steps can be taken in order to curb suicidal deaths? Please share your thoughts.

– Ashish Kumar