Page 10 - Insurance Times July 2024

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jectives of the regulations and monitor-
Policy loan facility a must in life covers ing of the performance of insurers.
IRDAI said the facility of policy loan is now mandatory in all life insurance The second part pertains to the busi-
savings products, enabling policyholders to meet liquidity requirements. ness statistics that are collected either
Issuing a master circular which consolidates all regulations with regards to through a business analytics project or
life insurance policies, the IRDAI also said the free look period, which pro- email.
vides time to review the policy terms and conditions, is 30 days as against
15 days earlier. The latest master circular follows a similar exercise by the IRDAI cuts audit firms' en-
regulator for general insurance policies.
gagement with insurers to
"This is an important step in the series of reforms taken up by the insurance 4 years
regulator with interests of the policyholders at the core. A conducive envi-
ronment is now facilitated to spur innovation, enhance customer experi- The new corporate governance guide-
ence and satisfaction," IRDAI said. lines of the IRDAI have reduced the
engagement period of statutory audi-
tors with insurance companies. Audit
IRDAI to create one refer- The operational guidelines under these
regulations are issued as master firms now have a four-year term for
ence for all periodic re- circulars. joint statutory audits, followed by a
turns The regulator said that these regula- mandatory three-year cooling-off pe-
riod, according to IRDAI's Master Cir-
IRDAI issued a master circular on sub- tions and the corresponding master cular on 'Corporate Governance for
mission of returns. It is aimed at cre- circulars require insurers and Insurers 2024'.
ating a single reference for all periodic reinsurers, including Foreign Reinsur-
returns and harmonising the timelines ance Branches, to submit certain re- During this cooling period, outgoing
auditors and their affiliates are barred
for filing among insurance companies. turns on a periodic basis, wherein ref-
from undertaking investment risk man-
The insurance regulator has taken up a erence is made to the master circular agement or concurrent audits of the
comprehensive review of the regulatory on submission of returns. insurer. Additionally, incoming auditors
framework for the insurance sector. This master circular replaces circulars must not include any affiliates of the
This will facilitate ease of doing business issued earlier on the submission of retiring auditor. Previously, audit firms
and reduce compliance burden. regulatory returns. It provides guid- could serve up to ten years, but the
According to the regulator, as part of ance or instructions on filing of returns. new rules ensure a fresh review of fi-
moving towards principle-based regu- The master circular is divided into nancial statements every four years to
lations, 37 were consolidated into three parts. The first deals with re- enhance audit quality and to reduce
seven and two new regulations were turns specified in the regulations and complacency. Existing audit firm ap-
notified, which were effective from corresponding master circulars. These pointments for five years can be con-
April 1, 2024. returns will check fulfilment of the ob- tinued till the end of the tenure.

10 July 2024 The Insurance Times