Regulatory Dissonance and Challenges to Globalization: A Comparative Study of the United States and Indian Non-life Insurance Regulatory Frameworks

Regulatory dissonance not only poses serious challenges to insurance companies seeking global expansion, but also reiterates the fact that business models cannot be exported in their entirety from one country to another. This paper presents the regulatory dissonance that exists between the non-life insurance industry in the U.S. and India. It attempts to highlight the regulatory dissonance that exists in the business line definition area, accounting treatment of acquisition expenses, treatment of unearned premiums, creation of a catastrophe reserve, reinsurance cession, investment regulation, obligations to the rural and social sector, rate and form regulation and solvency margin computation. While the paper attempts to compare most of the dissonance that exists between the two regulatory frameworks, it does not purport to be an exhaustive study of all the discrepancies that exist between the two systems.