Page 18 - Life Insurance Today July - December 2020

reinsurance issues and host of other regulations are plans are evaluated annually to determine their efficiency
invariably applicable. In India in the life insurance purview and success.
examples of Regulatory activism may be -
1. 'File & Use' norms on product approval with identifying Corporate Governance addresses three basic
the focussed segment issues:

2. The garb of Grievance Redressal 1. Ethical issues,
3. Tight guidelines on Investments by the insurers 2. Efficiency issues, and
4. Sec. 34B (of Insurance Act) - Power to remove CEO, 3. Accountability issues.
etc.
5. Sec 34C (of Insurance Act) - Power to appoint Addl.
Directors

The synonym of Corporate Governance is good governance.
Governance indicates behavior. The Governance is the
responsibility and accountability for the overall operation
of life insurers. Governance is a shared process of top-level
leadership, policy making and decision making, or to cope
with such situation that is always very difficult proposition
-from Management side of the insurers need to take a vow
for safeguarding their companies from being the mess of
financial irregularities.

Here the participants are - Board members, Managers, and
Stakeholders.

Corporate Governance is getting a focused attention for Figure 5: Issues or Corporate Governance
satisfying the divergent interests of the stakeholders of an
insurer. The stakeholders are those that have interests in Corporate Governance (CG) is a set of structural
the organization i.e.: arrangements that are emerging in free market economies
1. The Shareholders; to align the management of companies with the interest
2. The Employees; of their shareholders (in particular) and other stakeholders,
and society at large.
3. The Suppliers;
4. The Customers. Corporate Governance addresses 3 basic issues:
(i) Ethical Issues (Frauds, bribes, gifts, etc. to potential
Ensuring better corporate performance through
customers for achieving the goal of maximizing long
involvement in strategy formulation and policy making,
term owner value);
corporate conformance through top management's
supervision and accountability to the stakeholders come (ii) Efficiency Issues (concerned with performance of
under the ambit of corporate governance. management); and
(iii) Accountability Issues (arising out of stakeholders' need
First consideration is the Strategy Formulation: for transparency of management in conduct of
Strategy Formulation is the plans that help identify Agency/ business"). Scope of CG is limited to ensuring stable
Brokers' goals, objectives, and performance measures. The income levels for shareholders

"Love finds you not because you are seeking it, but because you are giving it."

18 July - December 2020 Life Insurance Today