Introduction: The Insurance Regulatory and Development Authority of India (IRDAI) has released an Exposure Draft on Corporate Governance Regulations for 2024. Dated 02-02-2024, the draft aims to streamline governance, remuneration, stewardship code, and director appointments. In response to the Regulations Review Committee (RRC) recommendations, this article delves into the key aspects and encourages stakeholders to contribute their feedback.
Detailed Analysis:
1. Corporate Governance Framework: The proposed regulations outline a robust corporate governance framework to meet stakeholder expectations, especially policyholders. It emphasizes sound and prudent principles for effective governance within insurance entities.
2. Remuneration of Directors and Key Management Personnel (KMPs): Addressing concerns of fair compensation, the draft addresses remuneration structures for directors and KMPs. Striking a balance between industry standards and stakeholder interests is a focal point.
3. Stewardship Code: The draft introduces a stewardship code, underlining the responsibilities and duties of insurers toward policyholders and stakeholders. This emphasizes ethical practices and accountability.
4. Appointment or Continuation of Common Director(s): Clear guidelines on the appointment or continuation of common directors ensure transparency and prevent conflicts of interest. This aspect contributes to a more accountable and efficient governance structure.
Conclusion: IRDAI’s initiative to enhance corporate governance in the insurance sector through the 2024 draft regulations signifies a commitment to stakeholder welfare. As the exposure draft invites comments and suggestions, stakeholders are urged to actively participate, contributing to a more inclusive and effective regulatory framework. The deadline for submissions is 23rd February 2024, emphasizing the importance of timely and valuable feedback in shaping the future of corporate governance in the insurance industry. Act now to be a part of this transformative process.
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Exposure Draft
Date: 02-02-2024
Ref. No.: 309.9/1/CG/F&I-Life/2023-24
Insurance Regulatory and Development Authority of India (Corporate Governance) Regulations, 2024
As part of the comprehensive review of Regulations being undertaken by the IRDAI, to enhance the ease of doing business and also reduce compliance burden for stakeholders while also ensuring that interests of policyholders continues to be protected, Insurance Councils were asked to submit their recommendations. Councils constituted the Regulations Review Committee (RRC).
The RRC recommended IRDAI (Corporate Governance) Regulations, 2024 as a framework that would address the matters pertaining to the following:
a) Corporate Governance;
b) Remuneration of Directors and KMPs;
c) Stewardship Code;
d) Appointment or Continuation of Common Director(s).
IRDAI after considering the recommendations of the RRC and also keeping the interest of the policyholders, the draft on IRDAI (Corporate Governance) Regulations, 2024 is prepared and annexed herewith.
The objective of the Regulations is to provide the governance structure for Insurers; responsibilities and functions of the Board and the management of Insurers which: (a) recognizes and meets the expectations of all stakeholders, particularly of policyholders; and (b) ensures adoption of sound and prudent principles and practices for the governance.
All the stakeholders are requested to forward their comments / suggestions, if any, on the proposed regulations (Annexure-A) in the attached format (Annexure- B) on or before 5:00 PM on 23rd February, 2024 to Shri Balaji Venkataramanan sbvramanan@irdai.gov.in with a copy to Shri Manoj Kumar manoj@irdai.gov.in.
