Jul 01, 2016

IRDAI Issues Guidelines for Corporate Governance for Insurers in India

The Insurance Regulatory and Development Authority of India (‘IRDAI’) has issued guidelines for corporate governance for insurers in India (‘CG Guidelines’) on May 18, 2016, which are applicable from FY 2016-2017. Some salient features of the CG Guidelines are as follows: (a) the board of directors of the insurers (‘BoD’) is required to formulate a policy on related party transactions consistent with the parameters set out in the CG Guidelines; (b) the BoD is to have a minimum of three independent directors (to be complied with within one year of the effective date of the CG Regulations). An insurer can have two independent directors for the first five years from the grant of registration; (c) mandatory establishment of certain committees prescribed under the CG Guidelines; (d) specific guidelines have been prescribed for the appointment and reporting of key management persons and appointment of statutory auditors; and (e) all insurers are required to report status of compliance with the CG Guidelines on an annual basis.




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