IFSCA to send SPI sidecar proposals to Indian government: Chairman K. Rajaraman

The International Financial Services Centres Authority (IFSCA) will be sending proposals to the Government of India regarding the regulator’s proposed framework that would allow re/insurers to set up reinsurance sidecars in a special purpose insurance (SPI) framework, Chairman K. Rajaraman announced at the Global Conference of Actuaries 2026 earlier this week.

IFSCA’s SPI framework was first unveiled at the 2026 IFSCA-IRDAI Global Reinsurance Summit, which was held last month in Mumbai.

At the event, K. Rajaraman, chairman of the IFSCA, highlighted how the regulator was 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 in order to attract global institutional capital.

Now, Rajaraman has confirmed that further work has been made on the SPI framework, announcing at the Global Conference of Actuaries 2026 event on February 23, that the regulator will shortly be sending proposals to the Indian government, with visible progress expected to be made over the next two months.

Speaking to Moneycontrol, Rajaraman explained that the initiative aims to enable alternative risk transfer (ART) instruments such as catastrophe bonds, which will help expand the risk-sharing base beyond traditional reinsurance players.

Recall that 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.

IFSCA’s proposal to the government will be sent shortly, according to Rajaraman. Once clarity is received, the IFSCA also plans to issue its own regulations and release a consultation paper for industry feedback.

The objective is to expand risk-sharing mechanisms within India’s domestic insurance sector, thereby enhancing the stability and sustainability of the system, especially in the face of significant catastrophe events.

Moneycontrol also noted that Rajaraman also indicated that more global reinsurers are likely to set up operations at the IFSC in GIFT City, with the Chairman citing rising domestic insurance penetration and long-term tax clarity.

The increase in reinsurance capacity is anticipated to encompass captive reinsurers and specialised entities aiming to penetrate India’s burgeoning insurance market via the IFSC.