Tougher rules for appointing CEOs

Insurance regulator IRDA has said that insurance companies can neither terminate nor appoint Chief Executives and Directors without the prior approval of the authority.

"No appointment, re-appointment or termination of CEO, Whole-time Director or Managing Director of an insurance company is valid without the previous approval of the Authority, IRDA said in a release.

It further said that the prior approval of IRDA is a statutory requirement and clearance would be subject to detailed due diligence conducted by the authority.

All the insurers are also advised that such references seeking prior approval should be made in the required format, it said, adding, it should reach IRDA at least 30 days prior to the commencement of appointment to allow sufficient time for the regulator to examine such proposals.

It is observed that insurers seek approvals without providing adequate time to examine such proposal and there are instances where approvals have been sought, it said. — PTI