The IFSCA has issued a Consultation Paper on Management Control, Administrative Control and Market conduct of Insurance Business (Draft Regulations) dated February 21, 2023 and requested the participants to share their comments/ views/ feedbacks.
Objective:
In order to put in place the regulatory framework related to Management Control, Administrative Controls and Market Conduct of insurance business carried out by IIO or IIIO, IFSCA is proposing to notify comprehensive regulations by adopting international best practices.
The key provisions as mentioned under the Draft Regulations are as follows:
- Important terms are defined in the Draft Regulations such as; allied services, change in control, confidential information, custodian of information etc.
- IIO shall ensure to prevent any entity, from exercising control over it, directly or indirectly, by acquiring significant ownership or interest in the IIO, through portfolio transfers and altered shareholding pattern.
- IIO to intimate the IFSCA in case of any changes in the shareholding pattern and seek prior approval for issuance or allotment of capital in any form.
- In case of a merger, amalgamation or transfer, the IIO shall satisfy the following conditions and seek prior approval of the Authority: the available solvency margin of the proposed merged entity will not be lower than the required minimum regulatory level. the scheme is compliant with all applicable laws and regulations. the scheme does not compromise on the best interests of the policyholders; and the scheme shall not affect the orderly growth of the industry.
- IIO shall formulate below mentioned policies duly approved by its Board for ensuring efficient administrative control: Policy for allocation of direct expenses and apportionment of indirect expenses of management amongst various insurance segments. Policy on payment of commissions to insurance agents, intermediary or insurance intermediary. Policy specifying the procedures to be followed for opening or closing of place of business in an IFSC or outside India; Policy specifying the benefits enjoyed by its different cadres of officers or employees, including managers, officers, consultants, retainers and staff. Policy on protection of interest of holders of insurance policies.
- IIO shall display the service parameters and turnaround times as approved by the Board on its website and keep the same updated as and when the service parameters are revised by the Board.
- IIO shall ensure to put in place prudent practices on management of risks arising out of outsourcing with a view to preventing negative systemic impact and to protect the interests of the policyholders;
- Process for sharing of confidential information concerning domestic or foreign entity by the requested entity is defined under the proposed Regulations. The requested entity to follow the defined process while sharing any confidential information.
- IIO shall adopt fair, honest and transparent practices while issuing advertisements and avoid practices that tend to impair the confidence of the general public.
- List of regulations which are to be superseded is also given in the stated regulation.
Comments / suggestions on the Draft Regulations may be offered in the specified format on or before March 13, 2023 for consideration of the Authority.
Source category: IFSC Insurance Office
Attachments
- /2023/157_CONSUL~11.PDF
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