ITI Re had set up operations in December 2016. However, since they did not do any business in the two year period till December 2018, their registration was liable to be cancelled.
The insurance regulator has cancelled the license of reinsurance firm ITI Reinsurance. Insurance Regulatory and Development Authority of India (IRDAI) said that the reinsurer was unable to commence business operations within the stipulated time.
ITI or Investment Trust of India (earlier called Fortune Financial Services) is the promoter of ITI Re. ITI is promoted by Sudhir Valia, who is the brother-in-law of Sun Pharma Managing Director Dilip Shanghvi.
The ITI Group runs an array of businesses in the financial services space and has recently forayed into the mutual funds business.
While the Investment Trust of India (earlier called Fortune Financial Services) holds 80 percent stake in the reinsurance entity, Lakshdeep Investment & Finance and Suraksha Realty hold 10 percent each.
ITI Re had set up operations in December 2016. However, since they did not do any business in the two year period till December 2018, their registration was liable to be cancelled. Without having a proper credit rating and due to the first preference for state-owned GIC Re in all busineses, ITI Re could not secure any business. Hence, they decided to surrender their license.
In June 2018, it was announced that Investment Trust of India will sell 80 percent of the holding in its subsidiary ITI Reinsurance to Go Digit Infoworks Services, backed by Prem Watsa of the Fairfax Group. However, this deal could not materialise as it did not receive IRDAI clearance.
The reinsurance space in India has General Insurance Corporation of India (GIC Re) as the sole state-owned company. They have the first right to refusal for treaties meaning only if they refuse a particular business do other reinsurers get an opportunity to write the business.
Apart from ITI Re, several global reinsurers operate in India through their India branch. All of them are subject to the first preference norm and get access to business only if GIC Re refuses to take them on their books.
