Page 50 - Insurance Times November 2021

Circular

IRDAI Circular

Maintenance of Current Accounts in purpose of premium collection, management expenses,
policy payments, investment operations, etc., for the
multiple banks by Insurers
convenience of the policyholders and for the ease of
IRDAI/F&A/CIR/MISC/262/10/2021 doing business.
Date:06-10-2021 4. The Audit Committee of the Insurers shall review
annually the need for having multiple current accounts
1. Insurers maintain separate current accounts with banks and rationalization, if any, as may be required.
at different operational levels, i.e., Branch offices,
5. This circular is issued in exercise of the powers
Controlling offices, Corporate office, etc., for the
conferred under Section 14 (2) (e) of the IRDA Act,
purpose of premium collection, management expenses,
1999.
policy payments, investment operations, etc.
Maintenance of current accounts at different S N Rajeswari
operational levels for specific purposes helps the insurers Member- F&A (In-charge)
in managing funds, reconciliation of transactions and Public Disclosures by Insurers
servicing claims of policyholders efficiently.
2. RBI, vide its circular ref: RBI/2020-21/20 DOR.No.BP.BC/ IRDAI/F&A/CIR/MISC/256/09/2021
7/21.04.048/2020-21 dt. 6th Aug. 2020 on “Opening of Date:30-09-2021
Current Accounts by Banks – Need for Discipline”, has
instructed banks not to open current accounts for 1. The Authority (IRDAI) had issued circulars ref: IRDA/
customers who have availed credit facilities in the form F&I/CIR/F&A/012/01/2010 dt. 28.01.2010 and IRDA/
of cash credit (CC) / overdraft (OD) from the banking F&I/CIR/PBDIS/105/05/2011 dt. 27.5.2011 on “Public
system. On a review, vide its circular ref: RBI/2020-21/ Disclosures by Insurers”. Guidelines on Periodic
79 DOR.No.BP.BC.30/21.04.048/2020-21 dt. 14th Disclosures were also issued by the Authority on
December 2020, RBI has permitted banks to open 9.4.2010 and vide circular ref: IRDA/CAD/CIR/245/11/
specific accounts which are stipulated under various 2012 dt. 20.11.2012.
statutes and instructions of other regulators/regulatory 2. The revised instructions on Public Disclosures by Insurers
departments, without any restrictions placed in terms placed at Annexure A will supersede the provisions of
of the above mentioned circular. circular ref. IRDA/F&I/CIR/F&A/012/01/2010 dt.
3. Based on the requests received by the Authority, to 28.01.2010, Guidelines on Periodic Disclosures dt.
avoid hardships, if any, faced by the insurers in 9.4.2010, circular ref: IRDA/F&I/CIR/PBDIS/105/05/2011
maintaining current accounts with banks, it is clarified dt. 27.05.2011 and circular ref: IRDA/CAD/CPR/245/11/
that the respective insurers may maintain current 2012 dt. 20.11.2012 issued by the Authority on Public/
accounts in appropriate number of banks for the Periodic Disclosures by Insurers.

50 The Insurance Times, November 2021