IRDA to propose guidelines for tenure and remuneration of directors of private insurance company

The Insurance Regulatory and Development Authority (IRDAI) has proposed new guidelines that would modify the remuneration of CEOs, non-executive, managing and whole-time directors (WTD) of private insurance companies. IRDAI has made efforts to align the regulations of CEOs and Directors of an insurance company with that of the banking sector as set by the RBI. This move is being introduced to ensure that the directors of the company get a fair remuneration and avoid taking an excessive risk because of low compensation.

As per the new regulations, the MDs, CEOs and the WTDs of the insurance company will have a term of maximum 15 years and their age should not be more than 70 years. IRDA has said that the revenue for these functionaries will be divided between fixed pay, perquisites and variable pay. It has stated that the fixed pay should be reasonable and must be inclusive of fixed items and other perquisites.