IRDAI invites comments on the ‘Exposure Draft on Insurance Regulatory and Development Authority of India (Conflict of Interest) Guidelines, 2019’ within 29th March, 2019
In a circular/guideline dated 8th March, 2019, The Insurance Regulatory and Development Authority of India (“Authority”) invites comments on the Exposure Draft on Insurance Regulatory and Development Authority of India (Conflict of Interest) Guidelines (“Guidelines”), 2019 within 29th March, 2019.
The Authority has proposed these guidelines with a view to resolve to resolve the conflict of interest arising out of the appointment of common directors between insurance companies, insurance company and insurance intermediaries and common promoters of Health and General Insurers.
- Permission for common non-executive director of an insurance company and insurance intermediary is required where the insurance company and insurance intermediary are part of the same group;
- However, an insurance company and insurance intermediary which are not part of the same group, cannot have a common director;
- No permission is required where the person proposed to act as the common director is an independent director in both the companies under the same group and the remuneration payable to such a Director does not exceed Rs. Ten Lakh per annum;
- Where a promoter of a general insurance company wants to be a promoter of a health insurance company or vice versa, the application for issuance of requisition of registration of certificate filed by such promoter must be accompanied with a note duly approved by Board of Directors providing the manner in which the segregation of business, if any, between the General Insurance Company and the Standalone Health Insurance Company shall take place
- It must be the responsibility of the Board of Directors of the Insurance Companies to formulate policy to address conflict of interest situations that may arise due to common directors or Officers;