The IRDAI lays down the Framework for the Appointment of Common Director

On 2nd September 2022, the Insurance Regulatory and Development Authority of India (IRDAI) issued the Circular IRDAI/F&I/CIR/MISC/183/9/2022 in regard to the “Appointment or Continuation of Common Director(s) in accordance with Section 48 of the Insurance Act, 1938. The second proviso of Section 48A of the Insurance Act, 1938, states that, “the Authority may permit an agent or intermediary or
insurance intermediary to be on the Board of an insurance company subject to such conditions or restrictions as it may impose to protect the interest of policy holders or to avoid conflict of interest.”

• In accordance with the framework, the appointment or the continuation of a common director representing the insurance agent, intermediary or insurance intermediary on the board of the insurance company shall be deemed to have been permitted unless the exceptions are mentioned in the said Circular, that is subject to the following conditions –

• The Proposed Director cannot be working under the capacity of the Chief Insurance Executive or a Specified Person, or any other Officer being held responsible for soliciting insurance business for or on behalf of the insurance agent, intermediary or insurance intermediary while being the director of the insurance company.