Page 48 - Insurance Times April 2019

Exposure Draft on Insurance Regulatory director in both the companies under the same group
and the remuneration payable to such a Director does
and Development Authority of India not exceed Rs. Ten Lakh per annum;

(Conflict of Interest) Guidelines, 2019 6. Permission for common non-executive director of an

Ref. No:228/F&A (NL)/COI-DIR/01/2018-19 insurance company and insurance intermediary is
required where the insurance company and insurance
Date:08-03-2019 intermediary are part of the same group;

The Authority, in order to address conflicts of interest arising 7. However, an insurance company and insurance
out of the appointment of common directors between intermediary which are not part of the same group,
insurance companies, insurance company and insurance cannot have a common director;
intermediaries and common promoters of Health and 8. Further, common directorships amongst insurance
General Insurers, in exercise of the powers conferred under companies, an insurance company and its promoter
sub-section (1) of Section 14 of the Insurance Regulatory company, and insurance companies and insurance
and Development Authority Act, 1999 proposes to issues intermediaries are allowed subject to conditions stated
IRDAI (Conflict of Interest) Guidelines, 2019. in the guidelines.

A brief summary of the proposed guidelines is as under: The draft guidelines along with the formats are attached
1. Where a promoter of a general insurance company herewith. All are requested to offer their valuable comments
wants to be a promoter of a health insurance company / suggestions on the proposed Guidelines by 29th March,
or vice versa, the application for issuance of requisition 2019 in the format provided at Annexure I. The comments
of registration of certificate filed by such promoter shall / suggestions may be e-mailed to Mr. Nirmal Jain, AM at
be accompanied with a note duly approved Board of nirmal.jain@irda.gov.in with a copy to the undersigned at
Directors providing the manner in which the rksharma@irda.gov.in .
segregation of business, if any, between the General
RK Sharma
Insurance Company and the Standalone Health
General Manager F&A-NL
Insurance Company shall take place;
2. It shall be the responsibility of the Board of Directors Non-Compliance of awards passed by
of the Insurance Companies to formulate policy to
address conflict of interest situations that may arise due Ombudsman
to common directors or Officers;
Ref. No:IRDAI/CAD/CIR/MISC/038/03/2019
3. A director or officer shall, within thirty days after he /
she becomes aware that a material conflict of interest Date: 05-03-2019
exists,
Attention is drawn to Authority’s Circular No. IRDAI/CAD/CIR/
a. eliminate the conflict of interest; or
MISC/063/03/2016 dated 01-04-2016 vide which all Insurers
b. resign from office. were directed to submit data pertaining to compliance of
4. Where the Insurer becomes aware of the Conflict of awards passed against them by Insurance Ombudsman.
Interest situation, immediate steps shall be taken by the Upon perusal of the data received from all Insurers for the
Insurer to ensure that the powers / authority delegated period April, 2018 to December, 2018, the following
to such a Director or Officer is ceased and he / she is observations are made:
not allowed to participate in the day-to-day activities a) While Insurance Ombudsman Rules, 2017 mandate
of the Company. Also, an enquiry, headed by an Insurers to comply with the awards passed by Insurance
Independent Director, shall be conducted on such a Ombudsman within a period of 30 days of receipt of
Director or Officer. The person found guilty shall no
award, many Insurers are neither complying with the
more be “Fit& Proper”;
awards nor filing appeals within 60 days of receipt of
5 No permission is required where the person proposed awards in accordance with provisions of circular
to act as the common director is an independent referred above.

48 The Insurance Times, April 2019