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Introduction
In our previous article on Managing General Agents (“MGAs”) in India, which can be accessed here, we noted that the statutory recognition of MGAs under the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act 2025 (“2025 Amendment”) raised important questions for the GIFT City framework. First, whether the Central Government would issue a notification under §2CA of the Amendment Act to create a carve-out for MGAs operating in the GIFT City, and second, whether the International Financial Services Centres Authority (“IFSCA”) would reconsider the regulatory positioning of MGAs as IFSC Insurance Offices (“IIOs”) and set up a standalone regime.
Against this backdrop, and with the 2025 Amendment having now come into force, there have been further regulatory developments under the GIFT City framework. On 13 March 2026, the IFSCA released a draft proposing the IFSCA (Managing General Agents) Regulations 2026 (“Draft MGA Regulations”) for stakeholder comments. The Draft MGA Regulations propose to supersede the existing joint-registration framework under the IFSCA (Registration of Insurance Business) Regulations 2021 (“IIO Regulations”) and introduce a dedicated regime for MGAs in the IFSC, recognising them as a standalone category of specialised insurance intermediaries1. This article examines the key shifts reflected in the Draft MGA Regulations and their broader significance for the MGA model in GIFT City.
Key Features of the Draft MGA Regulations
The Draft MGA Regulations reflect a material reworking of the framework currently applicable to MGAs under the IIO Regulations. The principal changes and new additions are summarised below:
Key Changes Proposed
Under the IIO Regulations, MGAs are defined as entities authorised to write direct insurance, reinsurance, or both on behalf of a Foreign Insurer or Reinsurer2. However, the Draft MGA Regulations narrow this scope, defining an MGA as an insurance intermediary authorised to manage part of a Foreign Insurer’s direct business pursuant to a Binding Authority Agreement3 (“BAA”). The proposed framework expressly prohibits MGAs from binding reinsurance and retrocession4. Further, the Draft MGA Regulations propose a shift to a standalone licence model for MGAs (rather than joint-registration with the Foreign Insurer) and enable them to tie up with multiple Foreign Insurers through separate BAAs.
In relation to forms of establishment, the Draft MGA Regulations permit MGAs to operate in the IFSC either through an unincorporated branch or an incorporated entity. The branch route is subject to a specified eligibility criteria, such as a valid registration in the MGA’s home jurisdiction and a track record acting as an MGA for direct insurance business. Entities that do not meet these conditions can pursue the incorporated route, which involves setting up an entity in the IFSC under the Companies Act 20135. In addition, the Draft MGA Regulations significantly enhance the financial thresholds applicable to MGAs, as compared to the minimum paid-up equity capital requirement of INR 5 lakh (c. USD 5,400) under the IIO Regulations6. They propose a minimum paid-up equity or assigned capital of USD 500,000 and a minimum net worth of USD 250,000 (or 50% of such capital, whichever is higher). The Draft MGA Regulations also require capital to remain unencumbered and be funded from promoter/shareholder-owned funds7.
On the Foreign Insurer side, the Draft MGA Regulations propose a more detailed and significantly stricter set of eligibility criteria as compared to the IIO Regulations. In particular, eligible Insurers would be expected to meet minimum net worth and credit rating benchmarks, formally undertake, at the Board level, to make good all liabilities assumed through the MGA, and ensure that binding authority is capped at 10% of the previous year’s gross written premium8. In relation to the BAA, Schedule IV of the Draft MGA Regulations proposes to substantially expand its required content beyond the relatively lean list of mandatory terms under the IIO Regulations9. Further, day-to-day claims handling may be delegated only within the limits specified in the BAA, with claims exceeding prescribed thresholds or involving a coverage dispute requiring prior Insurer approval10.
New Additions Proposed
The Draft MGA Regulations also introduce several new concepts and requirements. For example, the Draft MGA Regulations introduce the concept of a “MGA Qualified Person” (“MQP”), defined as an employee or director of the MGA engaged in solicitation and procurement of direct insurance business, who has undergone the prescribed training and passed an examination specified by the IFSCA11. In addition, the Draft Regulations propose that mandatory security deposit with an International Banking Unit (“IBU”) is maintained, over which the IFSCA holds a lien which cannot be withdrawn without its prior consent12.
Where permitted to handle premiums or claims under the BAA, the Draft MGA Regulations require MGAs to maintain a segregated fiduciary “Insurance Account” with an IBU, to be used solely for specified insurance transactions and not for operational or credit purposes. Funds in this account must remain separate from the MGA’s assets and be protected in the event of insolvency13. Further, the Draft MGA Regulations require Foreign Insurers to exercise robust oversight over MGAs, including by way of annual audits, periodic on-site reviews, governance safeguards to address conflicts, and treating the arrangement as a “Material Outsourcing Arrangement14”.
The activities prohibited from being carried out by an MGA are now set out under the Draft MGA Regulations, which include sub‑delegating authority, jointly employing individuals employed with the Foreign Insurer, and appointing personnel to the Insurer’s Board without prior IFSCA approval15. A detailed Code of Conduct is also set out under Schedule II of the Draft MGA Regulations, which frames the MGA’s primary duty as being to the Foreign Insurer, while also emphasising fair treatment of policyholders, transparent conflict management, clear disclosure of the MGA’s role as the Insurer’s agent, and the use of Insurer‑approved marketing material. Lastly, enhanced record-keeping and reporting obligations are proposed, including minimum retention periods, monthly rendering of accounts to the Foreign Insurer, and a 72-hour cyber event reporting timeline to the IFSCA for incidents likely to have an adverse impact on business or policyholders16.
Concluding Remarks
The Draft MGA Regulations represent a clear shift towards a dedicated regulatory framework for MGAs within the IFSC. By departing from the joint-registration model under the IIO Regulations to a standalone regime, the regulator has brought the structure in line with the 2025 Amendment Act.
The framework is likely to facilitate greater operational flexibility for MGAs, given the ability to partner with multiple Insurers, and may also support the growth of specialised and niche lines of business where MGA models are typically deployed, such as cyber insurance and W&I insurance.
That said, the framework remains at a consultative stage, with stakeholder comments invited until 2 April 2026. Certain aspects may therefore be refined prior to final notification, particularly in relation to the operational mechanics of BAAs and the scope of permitted activities. It is also notable that the IFSCA has taken an early lead in introducing a formal MGA framework, while a corresponding regime for MGAs in the DTA is yet to be issued by the IRDAI. This may, in due course, draw from or align with the IFSCA’s approach.
Footnotes
1 The consultation paper accompanying the Draft MGA Regulations states that the proposed framework would supersede the joint-registration model under the IIO Regulations.
2 The definition of “Managing General Agent” under R3(p) of the IIO Regulations expressly states that it is a company incorporated in India under the Companies Act 2013 or a body corporate incorporated overseas which is “authorized to undertake business of insurance or re-insurance or both pursuant to a binding agreement with a Foreign Insurer or Foreign Re-insurer”.
3 R3(l) of the Draft MGA Regulations defines an MGA as “an MGA which is registered as an insurance intermediary under these regulations and authorized by foreign insurer(s) pursuant to BAA to manage part of its direct insurance business including solicitation, underwriting risks and/or settling the claims”.
4 R9(3) of the Draft MGA Regulations further states that “No MGA can bind reinsurance (retrocessions) on behalf of the insurer.”
5 R5 of the Draft MGA Regulations sets out the eligibility criteria for MGAs in the IFSC for both unincorporated and incorporated forms.
6 (1) of the Third Schedule of IIO Regulations states that “The MGA may establish a private or a public company registered with Registrar of Companies in India, with a minimum paid up capital of INR five lakh”.
7 R10 of the Draft MGA Regulations sets out the capital and net worth requirements for an MGA.
8 14 under Schedule IV of the Draft MGA Regulations sets out certain requirements for the Foreign Insurer entering into the BAA with the MGA.
9 2(3) of the Third Schedule of IIO Regulations states that an MGA is required to submit a certified copy of the binding agreement to the IFSCA, as well the minimum information to be included.
10 R18 of the Draft MGA Regulations covers certain BAA requirements, which includes the prior approval of the Foreign Insurer for claims exceeding USD 10,000 or involving a coverage dispute.
11 R3(m) of the Draft MGA Regulations provides the definition of an MQP.
12 R12 of the Draft MGA Regulations sets out the applicable financial security and deposit requirements.
13 R19 of the Draft MGA Regulations sets out the applicable requirements pertaining to Insurance Accounts and premium segregation.
14 R20 of the Draft MGA Regulations sets out the applicable duties of the Foreign Insurer and their operational oversight requirements.
15 R22 of the Draft MGA Regulations sets out the activities that an MGA is prohibited from carrying out.
16 R21 of the Draft MGA Regulations sets out the applicable requirements in relation to maintenance of books of accounts and records.
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