The International Financial Services Centres Authority (IFSCA) is set to submit a proposal to the Government of India to establish a special purpose insurance framework, with progress expected within the next two months, said Chairman K. Rajaraman at the Global Conference of Actuaries 2026 on 23 February.
Speaking to Moneycontrol, he explained that the initiative aims to facilitate alternative risk transfer (ART) instruments, including catastrophe bonds, expanding the risk-sharing ecosystem beyond traditional reinsurance players.
The IFSCA is a unified authority for the development and regulation of financial products, financial services and financial institutions in the International Financial Services Centre (IFSC) in India
Mr Rajaraman said that an expert committee at the IFSC had recommended developing insurance-linked securities (ILS), especially catastrophe bonds, to strengthen risk transfer markets.
“Currently, insurers underwrite policies and transfer the associated risks to reinsurers. Under the new financial framework, a broader range of investors, including private equity and other institutional players, are willing to take on such risks as part of their portfolio diversification,” he explained.
To implement this initiative, the regulator is proposing a framework for establishing Special Purpose Vehicles (SPVs) that would issue and manage instruments such as catastrophe bonds until their maturity or disposal.
The proposal will be submitted to the government shortly. Once approval or guidance is received, the IFSCA plans to issue its own regulations and publish a consultation paper to gather feedback from the industry.