Requirements for an Insurance Broke...
Application for Insurance Broker Registration may be made for life and general insurance broker...
The Insurance Regulatory and Development Authority (IRDA) is the regulator looking after the promotion and orderly growth of the insurance business in India. It is necessary to maintain an efficient, fair and stable insurance market for the growth of the industry on one hand and for the protection of the policyholders on the other hand. Thus it is very important for public disclosure of risks faced by the insurers for the growth of fair and orderly insurance sector. Such disclosures have to be reliable and timely to ensure smooth functioning of the markets. The market has to furnish necessary feedback to the insurance regulator to make certain the safety of the investors and the policyholders both.
In 2002, the Insurance Regulatory Development Authority (IRDA) has prescribed various regulations for preparing financial statements of insurance companies. They are called statutory disclosure as per IRDA regulations. This regulation has specified 24 items which include important items like balance sheet, revenue account, profit, and loss account, receipts and payments account, auditors report, management report and managerial remuneration etc.
The IRDA has come out with necessary norms/rules and regulations for regulating the insurance market in India. The guidelines on corporate governance is a major development in this direction for growth and safety. Another important measure is the standard on public disclosures for the insurance companies.
A registered insurer shall make the disclosures required under paragraph 9 for each accounting period within 6 months from the last day of that counting period. Such disclosed information shall be useful, timely, comprehensive, meaningful and reliable for decision making. A registered insurer shall furnish the information which is comparable to that provided by other insurers functioning in the same market. Further, it must be consistent over time so that the reader is able to discern relevant trends and to analyze accordingly.
Such disclosures can be broadly categorized as:
The other additional disclosures, which at present are not being submitted to IRDA and being proposed for Public Disclosure are like as follow:
The registered insurer shall have to disclose the information like as follow:
(a) information about its company profile which includes its nature of the business, a broad description of its key products offered, the external environment under which it functions, its aims and objectives and further its strategies in place to achieve these objectives;
(b) broad details of its corporate governance framework and management control, including the implementation of the framework and controls;
(c) Information about its risk management framework including its asset-liability management (“ALM”) in total. The insurer shall disclose the method and key assumptions in the measurement of assets and liabilities for ALM purposes.
(d) All information on its reasonably foreseeable and relevant material insurance risk exposures and further the management of such risk exposures.
(e) Complete information about the determination of technical provisions.
(f) Detailed information about capital adequacy to enable the outside customer to evaluate the registered insurer’s objectives, policies, and processes for managing capital and to verify its capital adequacy.
(g) Complete information about its financial instruments and other investments details by class. and
(h) quantitative and qualitative information on financial performance and at a segmented level wise.
A registered insurer should consider its nature, scale, and complexity when considering the extent of information to be disclosed. It should clearly mention about key accounting methodologies and assumptions implied in preparation of the information in such disclosures. Whenever there are any changes in the methods and assumptions, it must Public Disclosure nature and reason for such changes, their effects where it is material to the concerned parties.