Page 51 - Insurance Times Octoberr 2022

Circular

IRDAI Circular

Appointment or Continuation of Common ii. There should be no conflict of interest or preju-
dice against the interest of the policyholders as
Director(s) u/s 48A of Insurance Act, 1938
a result of such appointment.
IRDAI/F&I/CIR/MISC/183/9/2022
iii. Insurer shall not pay any remuneration to non-
Date: 02nd September, 2022 executive directors without prior approval of
the Authority. However, insurers are permitted
1. The second proviso of section 48A of the Insurance Act, to pay sitting fees, as per applicable norms.
1938 provides that “the Authority may permit an agent
iv. The disclosure requirement as laid down under
or intermediary or insurance intermediary to be on the
the Corporate Governance Guidelines for Insur-
Board of an insurance company subject to such condi-
ers in India, IRDA (Preparation of Financial
tions or restrictions as it may impose to protect the
Statement and Auditor’s Report of Insurance
interest of policyholders or to avoid conflict of interest.”
Companies) Regulations, 2002 and any other
2. Applications are filed with the Authority seeking ap- extant applicable laws shall be complied with.
proval under section 48A of the Insurance Act, 1938,
v. A resolution is passed approving such appoint-
for new appointment or continuation of common
ment by the Board of insurance company/
director(s) representing insurance agent, intermediary
agent/intermediary/insurance intermediary.
or insurance intermediary on the board of insurance
vi. The common director shall recuse himself/her-
company.
self from the discussion and voting on any mat-
3. The Authority, in exercise of powers conferred under
ter/discussion pertaining to:
section 14(1) of the IRDA Act, 1999 hereby provides the
1. Any area having potential conflict of in-
following framework for appointment of common direc-
terest;
tor under section 48A of the Insurance Act, 1938:
a. The appointment or continuation of common direc- 2. Insurer/Agent/Intermediary/Insurance in-
tor representing insurance agent, intermediary or termediary where she/he is holding com-
insurance intermediary on the board of insurance mon directorship.
company shall be deemed to have been permitted,
vii. The number of directorships held by the com-
unless otherwise provided for in this Circular, sub-
mon director shall not exceed, at any point of
ject to following conditions:
time, the maximum number of directorships
i. The proposed director shall not be working in
specified under the extant law including the
the capacity of the Chief Insurance Executive /
Companies Act, 2013.
Specified Person or any other officer respon-
viii. The Insurer/Agent/Intermediary/Insurance in-
sible for soliciting insurance business for or on
termediary shall comply with all other appli-
behalf of the insurance agent, intermediary or
cable laws.
insurance intermediary while holding the posi-
tion of director in the insurance company. b. An individual, already acting or proposed to act as
The Insurance Times, October 2022 51