Insurance regulator brings out norms to strengthen insurers' boards

The regulator said the boards would have to look at overall direction of the business of the insurance company, including policies, strategies and risk management across all the functions

The Insurance Regulatory and Development Authority of India (Irdai) has brought out the final norms on corporate governance for insurance that aims to strengthen the boards of insurance companies.

The regulator said the boards would have to look at overall direction of the business of the insurance company, including policies, strategies and risk management across all the functions.

It would also have to look at projections on the capital requirements, revenue streams, expenses and the profitability.
 
Irdai said while laying down the projections, the boards must address the expectations of the shareholders and the policyholders. Compliance to the Insurance Act would rest with the board.

The board is also required to set up committees such as audit committee, risk management committee, policyholder protection committee, investment committee, nomination and remuneration committee and corporate social responsibility committee.

In another guideline on appointment of insurance agents, Irdai asked insurers to maintain a list of blacklisted agents.

Agents will also be required to disclose to customers the companies that they work and if they are suspended from an insurance company, they have to wait five years before reapplying to become an agent.