Page 29 - Life Insurance Today July - December 2020

that insurers additionally have to be sensitive to the same time, it is also important that these governance
management styles of the organizations where the funds requirements are not overly burdensome for insurers." -
are being lodged. To this extent, they have a dual function IRDAI authority said. (Courtesy: The Economic Times:
to play. Good governance practices for maintenance of 20.03.2020)
solvency, sound long term investment policy and
assumption of underwriting risks on a prudential basis are The insurance regulator, IRDAI has recently come out with
more important in the emergence of insurance companies new norms for Life Insurers on minimum information they
as a part of financial conglomerates. have to provide for inspection and investigation by the
Authority. As per the Insurance Regulatory and
Sound Corporate Governance in the insurance sector with Development Authority of India (Minimum Information
emphasis on overall risk management across the structure Required for Investigation & Inspection) Regulations 2020,
is necessary to prevent any contagion effect and to ensure the insurers should maintain a record of all proposals
financial stability in the economy. In this context, thorough received for insurance with proposal number, date when
understanding of the structure and composition of the the proposal was signed by the proposer, date of the
corporation, types of boards, roles of directors, need for receipt of the proposal, name and code of the insurance
corporate governance, nature and evolution of corporate agent, staff or intermediary and data and amount of the
governance and grasping over the latest guidelines of IRDAI insurance proposal deposit, among others.
on Corporate Governance applicable for life insurance
companies are absolutely necessary. For Health Insurance Policies, additional records giving all
applicable hospital records and details of claims processed
IRDAI sets up panel on governance at Life Insurers' Risk by the third party administrators should be captured. In
Management, Actuarial, Compliance and Internal Audit are respect of group insurance business, additional information
focus areas for changes. Country's insurance regulator has set such as group type and size, free cover limit applied to the
up a 16-member committee to find ways to improve corporate group and rating factors considered. For reinsurance
governance systems of insurers, primarily on making key business, details such as unique identification number and
functions such as risk management and internal audits type of reinsurance agreement, etc., have to be
independent of each other. The Insurance Regulatory and maintained, as per the stipulated norms. (Courtesy:
Development Authority (IRDAI) said on that a peer review of Business Standard, 26th November, 2020)
its current guidelines on corporate governance "indicated that
So all the Indian Life Insurers must resort to absolutely
there is need to further strengthen the guidelines".
complying with all the norms set by the Regulator, and
The committee will be headed by Mr. Pravin Kutumbe, related other Statutory Bodies, in relation to the Corporate
member -finance and investment at IRDAI and has six other Governance adequately - so that even the common people,
members from the insurance regulator besides members from corporate, stakeholders, customers and thousands of
the Reserve Bank of India and the Securities and Exchange intermediaries who deeply depend on the good
Board of India along with other industry participants. It has performance of Indian Life Insurance Companies - may be
been asked to submit the report to IRDAI in three months. assured significantly. Simultaneously the Regulator, IRDAI,
The three regulators have identified risk management, needs to have a continuous, consistence, careful, efficient
actuarial, compliances and internal audit as four key areas and strong watch over the compliance of all these various
where the committee could recommend changes to make aspects of Corporate Governance by all the Indian Life
them functionally independent of each other. Insurance Companies.

"These key functions are expected to be operationally References:
independent to ensure an effective and robust internal Different contemporary information as collected & collated
control environment within an insurer and support high from IRDAI Reports, various texts and referred from various
quality of decision-making by the management, At the web-based on-line materials. R

"Energy doesn't lie, what you attract is who you are."

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