Profit Related Commission to Non-Executive Director(s)

IRDAI vide ref. no. IRDAI/F&I/CIR/MISC/26/01/2023, dated January 30, 2023 has issued a Circular wherein insurers are permitted to pay Profit Related Commission to Non-Executive Director(s)”

The major highlights of the Circular are as follows:-

In order to simplify the process of appointment of Non-Executive Directors, the Authority has permitted the insurers to pay profit related commission to Non-Executive Director(s) including the Non-Executive Director(s) appointed under section 48A of the Insurance Act, 1938, under the deemed approval mechanism, subject to the following conditions:

• The insurer has reported positive profit after tax for the period for which the said commission is proposed to be paid.
• The Board of the insurer has passed the resolution approving such payment.
• The amount of payment of remuneration in the form of profit related commission to each of the Non-Executive Director shall not exceed the limits specified in the Guidelines on Remuneration of Non-Executive Directors and Managing Director /Chief Executive Officer / Whole-time Directors of Insurers, as amended from time to time.
• Disclosures with regard to said payment shall be made in the financial statements for the respective financial year.
• The insurer shall comply with all other applicable laws in this regard.

Source category: IRDAI

Attachments

• /2023/151_Profit_Related_Commission_to_Non-Executive_Director(s).pdf