Page 89 - Life Insurance Today July - December 2020

On the other hand, the move may be Section 33(1) of the Act empowers arising out of the inspection report; •
positive for life insurance companies as IRDAI, if it considers expedient to do Cancel the registration of insurer or
the policies sold by them will continue so, to direct an investigating officer to intermediary or insurance intermedi-
to have the advantage of being able investigate the affairs of any insurer or ary, as the case maybe; and • Issue
to act a collateral for securing housing intermediary or insurance intermedi- direction for winding up the insurer or
or vehicle loans. ary and to submit its report on the in- intermediary or insurance intermedi-
vestigation made. ary, as the case maybe.
It’s this reason why the General Insur-
ance Council (GIC) has expressed its Section 33(2) of the Act empowers the
For the purposes of Section 33 of the
reservation on the regulators move. investigating officer to cause an inspec-
Act, the expression “insurer” includes,
According to letter written by GIC, tion to be made of the books of ac- in the case of an insurer incorporated
critical illness covers are taken by count of any insurer or intermediary
people either to meet the treatment or insurance intermediary. Section in India: • all its subsidiaries formed for
costs or to manage the life style even 33(3) of the Act specifies that it shall the purpose of carrying on the busi-
after diagnosis of a critical illness. be the duty of the “manager”, ness of insurance exclusively outside
“managing director” and “other India; and • all its branches whether
IRDAI notifies Minimum officer” of the insurer including a situated in India or outside India.
Information for Insurers, service provider, contractor of an The Notification defines ‘Minimum In-
insurer where services are outsourced
Intermediaries and Insur- by the insurer, or intermediary or formation’ to mean the information

ance Intermediaries insurance intermediary, to furnish all specified under the Notification that
such “books of account”, “registers”, insurers or intermediaries or insurance
On November 23, 2020, the IRDAI has intermediaries are required to main-
notified the IRDAI (Minimum Informa- “other documents” and the tain.
tion Required for Investigation and In- “database” in its custody, and all such
spection) Regulations, 2020. The No- information, as may be sought by the
tification will come into force from investigating officer. The Notification is divided into 3
(three) parts: • Part I stipulates the
May 24, 2021.
The investigating officer shall make a provisions that are applicable to all in-
The objective of the Notification is to report of the investigation and submit surers; • Part II stipulates the provi-
specify the minimum information re- the same to the IRDAI. Upon receipt sions applicable to the intermediaries
quired to be maintained by insurer, of the report from the investigating and insurance intermediaries; and •
intermediary or insurance intermedi- officer, the IRDAI, after giving oppor- Part III stipulates the general provi-
ary, so as to enable the investigating tunity to give representation, may or- sions applicable to the insurers, inter-
officer to discharge its functions under der in writing: • Require the insurer to mediaries and insurance intermediar-
Section 33 of the Act. take action in respect of any matter ies. R

IRDAI lays out norms for share transfer of insurance companies
According to IRDAI sale, purchase and pledge of equity in excess of 5 per cent of an insurance company's paid-up
capital will need the regulator's prior approval, and any violation of the guidelines will attract action.
Issuing a clarification on the 'transfer of share of the insurance companies', the IRDAI said the provisions related to
sale and purchase of equity will also apply on creation of pledge or any other kind of encumbrance over shares of an
insurance company by its promoters.

It further said 'fit and proper' norms should be followed for sale and purchase of equity above 1 percent and upto 5
percent of the paid-up capital. The application for transfer of shares, it added, should be filed through the insurance
company concerned.

"The more the father doubts his son, the more the son doubts his father. A transparent father is indeed an
inevitable blessing a son can get!"

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