The International Financial Services Centres Authority (IFSCA) is advancing a specialized regulatory framework to institutionalize Insurance-Linked Securities (ILS) and catastrophe bonds within the GIFT-IFSC jurisdiction. Chairman K. Rajaraman recently confirmed that the authority will approach the central government within the next two months to operationalize Special Purpose Vehicle (SPV) structures. This initiative is designed to bridge a significant protection gap for climate and natural catastrophe risks in Asia. Current data indicates that approximately 84% of economic losses in the region remain uninsured, leaving only 16% covered by traditional means. By introducing Special Purpose Insurers (SPIs), the IFSCA aims to tap into global institutional capital, moving beyond the limits of traditional reinsurance. The global appetite for these instruments is currently at an all-time high. The catastrophe bond market closed 2025 with a record-breaking $24 billion in new issuances. Market projections for 2026 suggest total volumes could reach $70 billion as $13.8 billion in existing bonds mature and are reallocated. Investors are seeing competitive performance in this sector. The Swiss Re Cat Bond Index posted gains of 11% in the past year, matching the performance of the MSCI World Index and significantly outperforming U.S. corporate bonds. Spreads currently sit at approximately 6.5% over U.S. Treasury rates, remaining well above the historical average of 5%. Key drivers for this surge include rising inflation, which has increased property rebuilding costs by roughly 50% over the last five years. This has forced insurers to seek alternative risk transfer mechanisms. The market is also diversifying its risk mix, with 16 first-time issuers entering the space recently to cover unconventional perils like cyber risks and wildfires. To support this ecosystem, the IFSCA has notified the Fund Management (Amendment) Regulations 2026. These updates simplify compliance for intermediaries and offer a 24-month transition window for appointing IFSC-based custodians. The goal is to create a future-ready jurisdiction that allows private equity firms and institutional investors to diversify portfolios while stabilizing the broader insurance industry.