IRDA extends definition of Key Persons

Key persons include CEO, CFO, chief marketing officer, appointed actuary and chief investment officer among others of insurance companies

October 11, 2013 1:31 IST | India Infoline News Service
The Insurance Regulatory and Development Authority (IRDA) on Wednesday expanded the definition of ‘key persons’ to include the posts of ‘compliance officer’ and ‘chief risk officer’ of insurers.

IRDA said that key persons in all insurance companies play an important role not only in running the business enterprise successfully but also for compliance of all regulatory requirements.

It is further expected that the ‘Key Persons’ are not only responsible for executing the Board’s decisions, but also have to be accountable for effective implementation of statutory and regulatory provisions for overseeing the operations of the Insurers, in order to put in place the best governance procedures and market conduct practices, IRDA said in a notification.

According to IRDA’s latest decision, “key persons” include the chief executive officer, chief marketing officer, appointed actuary, chief investment officer, chief of internal audit, chief finance officer, chief risk officer and chief compliance officer of insurance companies.

The insurance regulator said that all insurers should have robust reporting structures so as to ensure that information submitted or returns filed to IRDA are submitted by the relevant ‘Key Person’ with authorization of the Chairman / CEO / MD / Principal Officer of the Insurance Company.

Insurers should initiate the filling up of such vacant positions of Key Person on a priority basis. At no point of time the position of any ‘Key Person’ should remain vacant for more than 180 days, IRDA further said.

According to IRDA, the particulars of the directors, key directors and key persons should be given at the time of registration of insurance companies.

IRDA added that in addition to the extant applicable regulations, insurers shall ensure no single individual is simultaneously holding more than one position of “key person”, which may have a potential conflict of interest.

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