Managing General Agents in GIFT IFSC: The IFSCA (Managing General Agents) Regulations, 2026

A managing general agent is not a broker. A broker places business; an MGA underwrites it, binding the insurer’s capacity under delegated authority, and often handles claims as well. That delegation is why MGAs attract dedicated regulation, and why GIFT IFSC now has a framework of its own: the IFSCA (Managing General Agents) Regulations, 2026, notified on 12 June 2026 and published in the Gazette on 15 June 2026.

The regulations were made under sections 12, 13 and 28 of the IFSCA Act, 2019 together with sections 42D, 42E and 118A of the Insurance Act, 1938, the sections dealing with licensing of intermediaries and with the withdrawal of IRDAI powers in the IFSC.

What the Regulations Regulate

Regulation 2 states the objective: a framework for the registration, regulation and operation of MGAs in IFSCs that “possess delegated authority from the foreign insurer(s) for underwriting direct insurance business or settlement of claims”, with transparency and accountability.

An MGA is defined as either a body corporate incorporated outside India and authorised by foreign insurer(s) under a written contract to manage part of its direct insurance business, including solicitation, underwriting risks and settling claims, or a company incorporated under the Companies Act, 2013. The definition expressly excludes a Limited Liability Company.

Two associated concepts run through the regulations: the binding authority agreement (BAA), under which the foreign insurer authorises the MGA to act as agent and enter into contracts of insurance on its behalf, setting out the terms and conditions for binding risks or settling claims; and the fiduciary account, an account with an IFSC Banking Unit held exclusively for premiums or claim settlements on behalf of the foreign insurer.

Who May Register?

The regulations distinguish two routes.

Branch of an established foreign MGA. An applicant registered or licensed to undertake MGA-like activities outside India, seeking to set up a branch in the IFSC, must hold a valid home-country registration or licence for such activities; must have acted as an agent undertaking such activities, including solicitation, underwriting and claims settlement for direct insurance business; and must be registered or certified in a national regulatory environment with which India has signed a double taxation avoidance agreement.

Incorporation in the IFSC. Applicants outside that category must be incorporated in the IFSC under the Companies Act, 2013.

In both cases, the applicant must have at least one written contract with a foreign insurer at the time of application, conferring authority to solicit, underwrite risks or settle claims. The foreign insurer must itself be registered or licensed for direct insurance business in its home country, and must have a minimum net worth of USD 100 million.

That last requirement is significant. It screens the capacity behind the delegated authority rather than only the agent exercising it.

Capital, Net Worth and Security

A shortfall in net worth must be restored immediately and compliance reported within fifteen days. Promoter and shareholder investment must come from owned funds, excluding borrowings or loans, and the MGA must submit an annual paid-up capital and net worth certificate from its statutory auditor or an independent company secretary.

Professional indemnity. An MGA must purchase and maintain professional indemnity insurance throughout the validity of its registration, in accordance with Schedule III. A branch MGA must maintain the policy at head-office level, with an endorsement covering liabilities arising out of the IFSC branch’s operations.

Operating Conditions

Claims authority is capped. Where authority to settle claims is granted, the MGA must settle within the per-claim and aggregate limits specified in the BAA. Any claim exceeding USD 10,000, or involving a coverage dispute, must be referred to the foreign insurer for prior approval. This preserves the insurer’s control over disputed and larger losses.

Premium must be segregated. Where an MGA collects premium for remittance to the foreign insurer, or collects claim amounts from the insurer to pass on to policyholders, the money must be held in a fiduciary account. Segregation of client money is the classic protection where an intermediary holds funds belonging to others.

Currency alignment. Where a policy is denominated in a currency other than the US dollar, the MGA must ensure that the relevant limits are equivalent to the mandated USD amounts at each renewal.

Personnel. The regulations require a principal officer responsible for the overall conduct of the MGA’s activities including regulatory compliance, and define a specified person engaged in solicitation, underwriting or claims settlement who has undergone the training and passed the examination specified by the Competent Authority.

Fees. The fee structure includes an application fee of USD 1,000, a further non-refundable fee of USD 5,000 on communication, a registration-related fee of USD 12,500, and USD 500 for a duplicate certificate.

The Consequential Change Elsewhere

Before June 2026, MGAs appeared in the IFSCA (Registration of Insurance Business) Regulations, 2021: a proviso to the Net Owned Funds requirement dealing with an MGA applicant, and an assigned-capital provision that included MGAs in the USD 1.5 million requirement. Both were omitted with effect from 12 June 2026 by these Regulations.

The result is a cleaner allocation: insurers and reinsurers register under the 2021 Regulations with Insurance Act-derived capital requirements (Article 29), while MGAs register under the 2026 Regulations with their own, lower, capital requirements matched to an agency rather than risk-bearing role.

Practical Points

• The BAA is the licence in commercial terms. Registration permits the activity; the binding authority agreement defines its scope, and the regulations require the BAA to set the claims limits.
• Check the insurer’s net worth early. A foreign insurer with net worth below USD 100 million cannot support an MGA registration.
• Treaty status matters for branches. The branch route requires registration in a jurisdiction with which India has a DTAA, which is an unusual condition to find in a licensing regulation and should be confirmed at the outset.
• Keep the fiduciary account clean. Premium and claim money must not be commingled, and the account must be with an IBU.