Regulatory updates

With an aim to establish a robust governance framework for insurers, on 20 March 2024, IRDAI notified the IRDAI (Corporate Governance for Insurers) Regulations, 2024 (Corporate Governance Regulations) which replace the extant guidelines relating to corporate governance practices¹³ Circular titled Guidelines for Corporate Governance for Insurers in India dated 18 May 2016. issued in 2016. With greater focus on ethics, accountability and transparency it aims to ensure implementation of sound governance practices and enhance confidence among stakeholders.

As compared to the extant guidelines, some of the additional points covered in the Corporate Governance Regulations pertain to the following:

Environment, Social and Governance (ESG

• Insurers are required to put in place a board approved ESG framework which should be annually reviewed by the board.
• The board is required to establish a comprehensive climate risk management framework based on the size, nature and complexity of operations.

Tenure of Key Management Persons (KMPs)

• The minimum fixed tenure of the Chief Compliance Officer (CCO) should not be less than three years.

Further, in line with the extant guidelines, the Corporate Governance Regulations lay down detailed requirements on the below mentioned aspects:

• Guidelines related to the board of insurers
• Appointment and remuneration of KMPs
• Appointment of statutory auditors
• Disclosure and reporting requirements

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To access the text of the directive issued, please click here