The Insurance Regulatory and Development Authority of India (IRDAI) has powers under the Insurance Act to inspect and investigate insurers and insurance intermediaries. The IRDAI recently issued the IRDAI (Minimum Information Required for Investigation and Inspection) Regulations 2020. The regulations stipulate the minimum information and records that insurers, intermediaries and insurance intermediaries are required to maintain and the general norms applicable thereto.
In order to clarify issues pertaining to the pledge and transfer of shares of insurers by promoters and shareholders, the Insurance Regulatory Development Authority of India recently issued the Circular on the Transfer of Shares of Insurers. This article summarises the key clarifications set out in the circular.
Despite the relaxation of the foreign investment limits for insurance intermediaries, insurance intermediation remains a regulated activity. In this respect, the Insurance Regulatory Development Authority of India recently issued guidelines on the repatriation of dividends by insurance intermediaries with a majority foreign investment and a circular mandating the submission of an undertaking by insurance intermediaries.
Since 2015, foreign investment in insurers and insurance intermediaries has been capped at 49%. However, many felt that this parity in the foreign direct investment (FDI) limits was unfair, as – unlike insurers – insurance intermediaries are not custodians of policyholders' money. Thus, the recently notified Indian Insurance Companies (Foreign Investment) Amendment Rules 2019 have effectively increased the limit on FDI in insurance intermediaries to 100%.
The Insurance Regulatory and Development Authority (IRDAI) recently issued the IRDAI (Regulatory Sandbox) Regulations 2019, which aim to facilitate the creation of a regulatory sandbox in which to test new business models, processes, proposals and applications in order to strike a balance between the orderly development of the insurance sector and the protection of policyholders' interests. Although insurance players are calling the sandbox a game changer, it remains to be seen how much it will be used.
The Insurance Regulatory and Development Authority recently issued the Exposure Draft on Insurance Regulatory and Development Authority of India (Conflict of Interest) Guidelines 2019, which seek to provide guidance on the conflicts of interest that arise between insurers and other insurance companies or intermediaries which have the same directors.
The Aadhaar and Other Laws (Amendment) Bill 2018 was recently passed in the Lok Sabha. The new bill has been welcomed as it provides much-needed clarity regarding the use and storage of Aadhaar numbers. The Insurance Regulatory and Development Authority has taken the bill's enactment as a cue to start providing clarity on the collection and storage of customers' Aadhaar data. It is hoped that the bill will be enacted quickly, as it is unenforceable in its present form.
In recent years, the Indian insurance sector has been abuzz with the news of new players looking to acquire stakes in insurers and insurance intermediaries. While the Insurance Act 1938 provides for the manner in which insurers may carry out amalgamations and transfers of insurance business, the regulations governing the amalgamation or transfer of an insurance intermediary's business remain scattered and, in some cases, non-existent.
The Insurance Regulatory and Development Authority of India (IRDAI) recently released the IRDAI (Insurance Brokers) Regulations 2018 to revise the norms governing the establishment and operation of insurance brokers in India. The regulations have introduced a myriad of changes which largely appear to bring parity between the norms applicable to insurance brokers and web aggregators, particularly with respect to solicitation through online, telemarketing and distance marketing modes.
The Insurance Regulatory and Development Authority of India (IRDAI) has released an exposure draft for revising the IRDAI (Insurance Brokers) Regulations 2013 for comments from stakeholders. Following various representations made by insurance brokers and other stakeholders, the IRDAI issued the IRDAI (Insurance Brokers) Regulations 2018 to repeal the erstwhile 2013 regulations, bringing changes to the earlier provisions and adding to the existing compliance requirements for insurance brokers.
The Insurance Regulatory and Development Authority of India (IRDAI) has recently been receiving requests to allow private equity funds to acquire a majority stake in Indian insurers. In response to such requests from private equity funds, venture funds and alternate investment funds, the IRDAI released new guidelines to facilitate and regulate private equity funds' investment in insurers as investors and promoters.
By way of a May 2017 order, the Insurance Regulatory and Development Authority of India set up the Reinsurance Expert Committee to make recommendations for, among other things, the efficient implementation and operation of the order of preference for cessions specified under the Branch Office Regulations. The committee recently released its report, providing its analysis and recommendations on the terms of reference prescribed under the order.
Following a number of representations made by various stakeholders, and due to the need to update the existing health insurance framework, the Insurance Regulatory and Development Authority of India recently released new regulations and guidelines. The revised regulatory framework seeks to encourage greater internal accountability on the part of insurers, strengthen innovation in product design and promote wellness.