Mumbai, Jan 3 (PTI) Regulator IRDAI has asked all insurers to report their ownership structure and control within the deadline of January 18.
Insurers say they are working on the same and will be able to comply with the IRDAI demand within the deadline.
The guidelines on Indian-owned and controlled insurers, signed by IRDAI Chairman T S Vijayan, were issued by the regulator on October 19, 2015 and the three-month deadline ends on January 18.
The stipulations are applicable to all the insurers, both life as well as non-life, irrespective of the extent of foreign shareholding.
The guidelines also provide, on an application made to the authority, for an extension of the period of compliance by a further three months.
As per IRDAI guidelines, which were issued last year, foreign investors in a domestic insurance joint venture can nominate non-CEO-type key management personnel, provided such appointments are approved by the board where the majority of the directors, excluding independent members, are the nominees of domestic promoters.
Under the insurance laws, majority of directors, excluding independent directors, should be nominated by the domestic promoters/investors.
In addition, they will nominate the chairman in cases where the chairman has a casting vote, it adds.
The quorum at board meetings will be decided by the presence of the majority of domestic directors.
This is regardless of the presence of the foreign partner’s nominees.
While some insurers have applied to the FIPB as well as the authority, seeking approval for change in their shareholding pattern and revision in the limit of foreign investment, majority have not done so as there has been no change in their ownerships following the increased FDI as their foreign partners have not taken a call.
It may be emphasized that the guidelines provide a maximum period of six months for compliance from the date of issue, an IRDAI notification dated December 23, 2015 said.
So far, nearly a dozen foreign companies expressed their interests to increase their stake in their JVs here following hike in FDI to 49 per cent last year.
But, only the French major Axa (with Bharti) and British company Standard (with HDFC) are the only two foreign companies which have increased their stakes in their JVs here and accordingly made the compliance reporting so far.
Curated from Corporate Governance in Insurance Sector