Also, if there is no Appointed Actuary, new products will not be approved, the regulator said while issuing guidelines on appointment of 'Appointed Actuaries and their Mentors'.
Appointed Actuaries (AAs) are entrusted with the responsibility of maintaining solvency position of the Company. There are other jobs such as new product approval which need inputs and certification from Appointed Actuaries.
"If there is no Appointed Actuary for a considerable time, say more than one year, the Companies will not be allowed to transact new business," said the guidelines which will become operational with immediate effect.
"From July 1, 2016, all the appointments of Appointed Actuaries and their Mentors will be in compliance with these guidelines," Irdai said.
To increase the supply of Appointed Actuaries for the insurance industry, Irdai has been encouraging young actuaries to take up position of AA.
The Irdai is currently approving the appointment of Actuaries who are members of the Fellow of Institute of Actuaries of India (IAI) (but do not qualify with the relevant experience and/or other requirements), subject to appointment of experienced Actuary as Mentor.
For bringing the uniform practice while appointing the Mentor as well as to ensure that the companies and the AAs get full benefit of knowledge and expertise of the Mentor, Irdai has specified norms for the appointment and responsibilities of the Mentor.
The upper age limit for the Mentor will be 75 years and should have at least 20 years of experience in the insurance field.
The minimum tenure for Mentor will be one year.
The mentor will be jointly responsible for all the actuarial issues along with the Appointed Actuary.