IRDAI brings out norms to strengthen insurers' boards

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

The regulator said the Board will have to look at a broad range of areas such as overall direction of business of the insurance company, including policies, strategies and risk management across all functions.

It would also have to look at projections on capital requirements, revenue streams, expenses and profitability.

IRDAI said that while laying down projections, the Board must address expectations of shareholders and policyholders.

All compliance to the Insurance Act would rest with the Board.

The Board is also required to set up committees like audit committee, risk management committee, policyholder protection committee, investment committee, nomination and remuneration committee and CSR 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.