The Insurance Regulatory and Development Authority of India (IRDAI) on May 03, 2023, issued a notification regarding draft guidelines on remuneration of Non-Executive Directors and Key Managerial Persons of Private Sector Insurers.
It is proposed to replace the extant guidelines on the remuneration of Non- Executive directors and MD/CEO/WTD of insurers issued vide Circular Ref: IRDA/F&A/GDL/LSTD/155/08/2016 on August 15, 2016.
The following are the objectives-
- To ensure effective governance of compensation.
- To ensure alignment of compensation with prudent risk-taking.
- To ensure effective supervisory oversight and stakeholder engagement.
- To ensure the safety of policyholders and other stakeholders.
Draft Guidelines proposed in this regard are placed as Annexures A and B, and all are requested to offer their comments and suggestions on the proposed guidelines.
•The guidelines have been in force for over 6 years and based on the experience of Implementation and compliance of guidelines by the insurers, it is decided to bring remuneration of other Key Managerial Persons (KMPs) also within the ambit of the guidelines.
•To give more clarity to the extent of variable pay with respect to the total remuneration of Directors and KMPS Variable Pay Deferral Malus and Clawback provisions, Accounting Disclosures, etc. and issue revised guidelines on the remuneration of directors and key managerial persons of insurers accordingly.
[Notification No. IRDAI/F&I/Cir]
