IFSCA to frame rules for Cat bonds in GIFT-IFSC
Move aimed at attracting global capital, bridging protection gap, and expanding risk coverage
image for illustrative purpose
Mumbai: The International Financial Services Centres Authority (IFSCA) is working on a regulatory framework to enable the issuance of catastrophe bonds (Cat Bonds) in GIFT-IFSC, a move that could position India as a significant player in the global insurance-linked securities (ILS) market.
K Rajaraman, Chairman of IFSCA, said the regulator is working on a framework that would allow reinsurance companies to set up “sidecars” under a special purpose insurance framework and standardise economic solutions to attract global distribution capital.
He was speaking at the third edition of the IFSCA–IRDAI GIFT City Global Reinsurance Summit (GRS 3.0) 2026, held in Mumbai on Monday. A key objective of GRS 2026 is to advance the insurance-linked securities ecosystem and the tax-cutting bond framework in
India, particularly within GIFT-IFSC, Rajaraman said.
He noted that in August 2025, a high-level working group had submitted a report to IFSCA outlining the roadmap for developing India as a hub for Cat bonds, aimed at bridging the country’s protection gap.
The Indian insurance market is also witnessing a shift in its risk profile, with emerging threats such as wildfires and cyber risks gaining prominence, the categories that were earlier
considered unsuitable for many investors.
Rajaraman said Health and Personal Accident (PA) insurance now accounts for nearly 50 per cent of total gross revenue in direct business at GIFT-IFSC. Other major segments include fire, engineering, marine, and commercial lines.
“The IFSC tax framework, which provides a tax holiday and allows operations in US dollars, helps protect capital from currency fluctuations. This makes GIFT-IFSC an attractive platform for foreign insurers to establish operations,” he said.
Financial Services Secretary M Nagaraju said IFSCA has a crucial role in advancing India’s ambition of becoming a global reinsurance hub and urged domestic insurers and reinsurers to tap global opportunities through GIFT City.
“India stands at the cusp of transformative growth in its reinsurance sector."
