Page 51 - Insurance Times February 2022

Circular

IRDAI Circular

Maintenance of Current Accounts in with conditions given in regulations, guidelines, circulars
issued by the Authority.
multiple banks by Insurance Intermediaries
4. The insurance intermediaries shall review annually the
including entities sponsored by them
need for having multiple current accounts and
IRDAI/INT/CIR/MISC/318/12/2021 rationalization, if any, as may be required.
Date:29-12-2021 5. This circular is issued in exercise of the powers
conferred under Section 14(2)(e) of the IRDA Act, 1999.
1. It has been observed that the insurance intermediaries
maintain multiple current accounts with banks at S N Rajeswari
different operational levels, i.e., Branch offices, Member (Distribution)
Corporate office, etc., for regulatory and other
purposes. Guidelines on Remuneration of Non-
Executive Directors and Managing
2. RBI, vide its circular ref: RBI/2020-21/20 DOR.No.BP.BC/
7/21.04.048/2020-21 dt. 6th Aug. 2020 on “Opening of Director/Chief Executive Officer/Whole-
Current Accounts by Banks – Need for Discipline”, has time Directors of Insurance companies
instructed banks not to open current accounts for
customers who have availed credit facilities in the form Date: 03-01-2022
of cash credit (CC) / overdraft (OD) from the banking
In order to ensure sound remuneration or compensation
system. On a review, vide its circular ref: RBI/2020-21/
practices and avoid situations resulting from excessive risk
79 DOR.No.BP.BC.30/21.04.048/2020-21 dt. 14th
taking behaviour due to inappropriate compensation
December 2020, RBI has permitted banks to open
structures or incentive plans and also taking into account
specific accounts which are stipulated under various
the experience of past 5 years, it is proposed to replace the
statutes and instructions of other regulators/ regulatory
extant guidelines on remuneration of non-executive
departments, without any restrictions placed in terms directors and managing director /chief executive officer/
of the above mentioned circular. whole-time director of insurers, issued vide circular ref IRDA/
3. Based on the requests received by the Authority, to F&A/GDL/LSTD/155/08/2016 dated 05.08.2016.
avoid hardships, if any, faced by the insurance The salient features of the proposed Guidelines are as
intermediaries in maintaining current accounts with under:
banks, it is clarified that the respective insurance 1. The Guidelines cover the remuneration of Non-
intermediaries including entities sponsored by them Executive Directors, CEOs /WTDs /MDs of private
may maintain current accounts in appropriate number sector insurers including the format in which
of banks for the purpose of meeting regulatory remuneration details are required to be submitted to
requirements, reinsurance business, etc. that are in line the Authority.

The Insurance Times, February 2022 51