IRDAI Introduced New Corporate Governance Regulations for Insurers

Current Context: The Insurance Regulatory and Development Authority of India (IRDAI) introduced new corporate governance regulations for insurers in India.

• The regulations came into effect on May 22nd, 2024, with a compliance deadline of June 30th, 2024 for most insurers [IRDAI master circular].
• Here are some of the key highlights of the new regulations:
• Board Composition: The focus is on strengthening the board with a minimum of three independent directors.
• Risk Management: The board needs to ensure business strategy considers risk tolerance.
• Independent Committees: The regulations mandate setting up an investment committee with specific members.
• Fit and Proper Criteria: Directors must meet certain criteria to ensure they are qualified and have a good reputation.

Question:

1. How many independent directors must be on the board of insurers according to the new IRDAI regulations?

• A) One
• B) Two
• C) Four
• D) Three

Answer: D) Three independent directors must be on the board of insurers according to the new IRDAI regulations.