IFSCA Chairman outlines new SPI sidecar framework to attract global capital to India

Speaking last week in Mumbai, India at the 2026 IFSCA-IRDAI Global Reinsurance Summit, Shri K. Rajaraman, chairman, IFSCA, highlighted how the regulator is working on a framework that would enable re/insurers to set up reinsurance sidecars in a special purpose insurance (SPI) framework, and standardise parametric solutions to attract global institutional capital.

This heavily implies that collateralized reinsurance would also be in scope for the regulator’s SPI structure.

Speaking at the summit, Rajaraman, Chairman of the International Financial Services Centres Authority said: “A central objective of the GRS 2026 is the advancement of the ILS and catastrophe bond framework within India, specifically through the GIFT-IFSC jurisdiction.

“This initiative is driven by the urgent need to bridge the “protection gap” for climate and natural catastrophe risks, which remains at 84% across Asia, meaning only 16% of total economic losses are currently insured.”

Rajaraman also highlighted how the panel, a Working Group (WG), which consists of industry experts within Alternative Risk Transfer (ART) arrangements, published a report last year that outlined how the International Financial Services Centres Authority (IFSCA) can play a crucial role in making India a hub for catastrophe bonds.

“To bridge the 84% protection gap, we are operationalizing a Special Purpose Insurer (SPI) framework and standardising parametric solution reporting to attract global institutional capital,” the Chairman added.

The Chairman also stated that the 84% protection gap in Asia is a systemic risk that “traditional reinsurance cannot solve alone.”

Highlighting 2025’s record year for catastrophe bond issuance, Rajaraman noted that this proves that capital market appetite for insurance risk is at an all-time high.

During his speech, Rajaraman also highlighted some of the key trends that are being seen within the insurance-linked securities (ILS) market.

“The 2026 market is characterized by stabilizing spreads and an expanding risk mix that now includes wildfire and cyber risks, previously not considered suitable by many investors,” he said.

Additionally, Rajaraman also acknowledged how the industry saw the release of the world’s first catastrophe bond exchange-traded fund (ETF) last year, the Brookmont Catastrophic Bond ETF, which is managed by Brookmont Capital Management, LLC, while ILS manager King Ridge Capital Advisors LLC serves as the sub-adviser to the cat bond ETF, effectively managing the portfolio.

“The launch of the world’s first cat bond exchange-traded fund (ETF), the Brookmont Catastrophic Bond ETF (ticker ILS), which surpassed its break-even mark of USD 25 million in assets by late 2025, signals a deepening of the retail and institutional investor pool that the IFSCA can tap into,” Rajaraman added.

Rajaraman also mentioned parametric cyber risk during his speech, which is a novel area to regulate on, showing how the IFSCA is adopting a forward-thinking approach as India looks to transform its reinsurance sector.

To conclude, Rajaraman said: “The Global Reinsurance Summit 2026 confirms that India is no longer just a consumer of global reinsurance capacity but a foundational pillar of the global risk transfer architecture. For the IFSCA, the facilitating role in the ILS and cat bond market is the final component in creating a truly “future-ready” jurisdiction.

“By leveraging the proposed SPI framework, parametric innovation, and a unified regulatory environment, GIFT-IFSC is uniquely positioned to bridge the gap between India’s current protection needs and its 2047 vision of “Insurance for All”.

Plans to establish India’s GIFT City as a hub for ILS was also highlighted at the Summit this week, as Iain Reynolds, Head of Third-Party Capital at Peak Re, stated that success requires more than just a regulatory framework, it requires a clear focus on what the regime is trying to achieve.