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The Insurance Regulatory and Development Authority (Irda) has expanded the definition of ‘key persons’ to include the posts of ‘compliance officer’ and ‘chief risk officer’ of insurance companies.
“Key persons” are key officials of insurance companies who play a critical role not only in running the business but also in complying with the regulatory requirements.
Following Irda’s latest decision, “key persons” include the chief executive officer, chief marketing officer, appointed actuary, chief investment officer, chief of internal audit, chief finance officer, chief risk officer and chief compliance officer of insurance companies.
Insurers have also been told to submit details of the respective key persons and inform Irda in case of any position falling vacant. According to Irda, at no point of time should the position of any “key person” be remain vacant for more than 180 days.
“It is considered necessary to have this information on key persons on an ongoing basis, so as to monitor the continuous presence of these ‘key persons’ and information on these ‘key persons’ at all times,” Irda said.
According to Irda rules, the particulars of the directors, key directors and key persons should be given at the time of registration of insurance companies.
The key persons are not only responsible for executing the board’s decisions, but also have to be accountable for effective implementation of statutory and regulatory provisions for overseeing the operations of the insurers in order to put in place the best governance procedures and market conduct practices.
Irda added that in addition to the extant applicable regulations, insurers shall ensure no single individual is simultaneously holding more than one position of “key person”, which may have a potential conflict of interest.
