International Financial Services Centres Authority (IFSCA) appointed committee in an interim report has suggested a slew of measures for making the GIFT IFSC an attractive destination for insurance companies, including life and health insurers.

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Some of the key recommendations of the report included permitting non-resident Indians (NRIs)/Persons of Indian Origin (PIOs) to buy life insurance policies for themselves and family members who are based in India and abroad from companies set up in the the International Financial Services Centre (IFSC) and allow them to pay premium in the currency of their choice (including Indian rupees).

The interim report suggested permitting NRIs/PIOs to buy portable life insurance policies which offers them flexibility to pay premium in INR or in foreign currency, based on their choice, after they return to India, the IFSCA said in a statement.

It suggested allowing residents to buy overseas health insurance for themselves and their dependents (in India and overseas) from insurance companies or intermediaries in the IFSC for medical treatment anywhere in the world and allow insurance companies to offer health insurance products to NRIs/PIOs including covering their family members who are based in India.

The IFSC should emerge as 'Reinsurance Hub' for Asia and Africa with more reinsurers encouraged to set up base in IFSC. IFSC can also emerge as aviation insurance hub for the world and insurers be allowed to set up subsidiaries in IFSC to promote business, the panel suggested.

Indian investors be allowed to set up direct and reinsurance companies with lower capital requirements to promote insurance abroad, it said, adding, foreign reinsurance brokers be encouraged to set up base in IFSC to create a vibrant insurance market.

The committee believes that the IFSC can become an engine of economic growth for India. The global opportunity for insurance sector is immense. The Indian insurance sector is underperforming compared to that of developed and emerging economies.

"Insurance penetration and density, which are the key performance indicators of the insurance industry, are especially low in India. GIFT IFSC promises to offer a cost-effective and tax-efficient jurisdiction for insurance companies to set up operations there,? said Pradip Shah, Chairman of the Expert Committee.

In August, the newly created International Financial Services Centres Authority (IFSCA) constituted a seven-member committee to suggest ways to enhance international retail participation in the IFSC.
The expert committee was constituted by the IFSCA with an aim to suggest how to develop international retail business in the IFSC along with potential strategies for making the IFSC attractive for international financial services.

The panel was also to provide a road map for future growth of international retail business in IFSC, and also examine and recommend any other issues that are important in the development of the IFSC.
The committee has so far held 16 video meetings and met with 36 participants in financial services in India and abroad.

Apart from channelising India's offshore business to the IFSC located at GIFT City and making it the gateway for India centric international financial services, the objective is to make it a global hub for international financial services on the lines of London, Hong Kong, Singapore, and Dubai.

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Earlier this year, the government constituted the IFSCA with Injeti Srinivas as its chairperson to develop and regulate the financial services market in the IFSC in India.