The IRDAI has formed a 16-member committee to look into enhancing the governance of insurers.
The panel includes representatives of the life and general insurance sectors, according to an order issued yesterday by the regulator.
IRDAI released the Corporate Governance Guidelines for Insurance Companies in India in 2016. However, the participation of the Authority in a peer review process of the IAIS on Insurance Core Principles (ICPs), more particularly on ICP 5-Suitability of Person, ICP 7-Corporate Governance and ICP 8-Risk Management and Internal Controls, indicated that there is a need to strengthen the Guidelines.
Furthermore, four key functions (risk management, actuarial, compliance and internal audit) are an essential part of the system of governance. These key functions are expected to be operationally independent to ensure an effective and robust internal control environment within an insurer and support high quality of decision-making by the management.
At the same time, it is also important that governance requirements are not overly burdensome for insurers.
Accordingly, in order to provide due weightage to control functions, there is need to enhance the governance system of insurers, says the IRDAI.
The committee is to submit its report within three months, that is, by 19 June.