The Insurance Regulatory and Development Authority of India (IRDAI) has issued a notification on “Obligatory Cession for FY 2025-26”, applicable to Indian Re-insurers and insurers under Section 101A of the Insurance Act, 1938. 

Key Highlights: 

• Cession Percentage: 4% of the sum insured on each general insurance policy must be reinsured with GIC Re (General Insurance Corporation of India). Terrorism and Nuclear Pool premiums are exempt (NIL cession). 
  
  

• No Limit on Sum Insured: Ceding insurers must notify Indian Re-insurers of underwriting details when cession exceeds specified limits. 
  
  

• Commission Rates: 

• • Motor TP & Oil & Energy: Minimum 5% 

• • Group Health: Minimum 10% 

• • Crop Insurance: Minimum 7.5% 

• • Aviation: As per industry terms 

• • All other insurance classes: Minimum 15% 

• • Higher commission can be mutually agreed. 
    
    

• Profit Commission: 50:50 sharing between Indian Re-insurer and ceding insurer, based on portfolio performance over three years, factoring loss %, management expenses (2%), profit (5%), and commission (12.5%). 
  
  

This notification is effective for policies issued between April 1, 2025, and March 31, 2026.