Deep Dive into the Scope of Business and Currency Operations for IIIO
Armed with a comprehensive understanding of the International Insurance Intermediary Offices (IIIO) functioning within the International Financial Services Centre (IFSC), we aim to delve deeper into the specifics and intricacies of their operation. Our key areas of discussion include the scope of business for an IIIO and the currency in which their operations can be conducted.
Unfolding the Scope of Business for an IIIO
Perceived under the light of Regulation 8 of IIIO Regulations, the activity domain of an IIIO can be distinctly divided into five separately outlined streams.
Direct Insurance Broker Services
An IIIO that’s registered as a direct insurance broker is authorised to execute direct insurance business activities. Where, you ask? Well, it enjoys three arenas for operation – right from and within the IFSC, onto other Special Economic Zones (SEZs) in India and spanning outwards to operations outside India.
Constraints for Direct Insurance Business Solicitation
On the contrary, an IIIO that’s aligned for soliciting direct insurance business resides under specific restrictions. It’s barred from instigating direct insurance business from the Domestic Tariff Area (DTA) in India, unless the undertakings align with Section 2CB of the Insurance Act.
The Composite and Reinsurance Broker Gateway
An IIIO registered as either a Composite Broker or a Reinsurance Broker is accorded sanction to carry out the activities of its registered broker type. The liberty to engage in such broker business extends not just within IFSC, but also in other SEZs in India, in DTA and opportunities overseas are not far from reach.
Transaction Permissions Based on Authority-Issued Certificates
An essential aspect of IIIO operations resides in their business area limitations; no IIIO is permitted to participate in a class of business that hasn’t been allowed in its certificate, as issued by the Authority.
Service Boundaries for TPAs, Surveyors, and Loss Assessors
Lastly, Third-Party Administrators (TPAs), Surveyors, and Loss Assessors that have their names registered as IIIO must abide by specific service limitations. They are prevented from delivering services for policies that aren’t issued by an IFSC Insurance Office (IIO) or an insurer having domicile outside India. However, an exception exists for TPAs that are permitted to service foreign travel policies and health policies contrived by Indian insurers, but only those that cover medical treatment or hospitalisation outside India.
Deciphering Currency Operations for an IIIO
Jumping on to the currency question associated with our IIIO discussion. As outlined in sub-regulation (7) of Regulation 8 of IIIO Regulations, IIIOs’ financial wheel does turn in a freely convertible foreign currency, though this doesn’t encompass the Indian Rupee.
By dissecting these operational aspects, we chalk out a clearer understanding of the scope of business operations for an IIIO, along with its currency restrictions. Treading on these regulated paths ensures alignment with guidelines and regulations crafted by the authorities for smooth and cohesive functioning within the IFSC.
