Introduction

The Insurance Regulatory and Development Authority of India (IRDAI) has powers under the Insurance Act 1938 to inspect and investigate insurers and insurance intermediaries. Under Section 33 of the Insurance Act, insurers and insurance intermediaries must provide the IRDAI with access to books of accounts, registers and other documents in their custody or power and furnish any statements and information sought. Typically, certain details are sought in advance of on-site inspections of insurers and insurance intermediaries. With regard to the submission of pre-inspection data requirements, the IRDAI noted that in certain cases there was delay in providing the data sought.

To address these concerns, the IRDAI issued and invited comments from various stakeholders on:

  • the Exposure Draft on the IRDAI (Minimum Information for Inspection or Investigation) Regulations 2018; and
  • the Exposure Draft on the IRDAI (Minimum Information for Inspection or Investigation) Regulations 2019.

Following the comments received, on 24 November 2020 the IRDAI issued the IRDAI (Minimum Information Required for Investigation and Inspection) Regulations 2020 (the regulations). The regulations stipulate the minimum information and records that insurers, intermediaries and insurance intermediaries are required to maintain and the general norms applicable thereto.

This article provides a summary of the key requirements stipulated under the regulations.

Minimum information requirements – insurers

Insurers are required to keep a record of all:

  • proposals for insurance received;
  • cover notes;
  • individual policies and group policies;
  • reinsurance business;
  • premiums received;
  • endorsements;
  • bank guarantees and deposits with cross-reference to the relevant policy or policies; and
  • claims intimated.

Insurers are required to also keep a record of:

  • insurance agents;
  • insurance intermediaries;
  • all salaried field workers;
  • employees, including employees on a contract basis; and
  • underlying employment letters and changes therein.

Insurers are required to maintain cash books and disbursement books with supporting documents and record investments separately for:

  • immovable property;
  • securities;
  • loans on mortgages and other loans; and
  • other assets.

Insurers are required to also keep proper records of staff attendance in any form.

Insurers issuing documents for evidencing assumption of risk are required to:

  • ensure that such documents are serially numbered;
  • maintain a record of the serial numbers of the forms and documents issued to each person; and
  • maintain a proper check to verify that all forms and documents issued are properly accounted for.

Minimum information requirements – intermediaries and insurance intermediaries

Intermediaries and insurance intermediaries are required to keep a record of all employees specifying, among other things:

  • their names and addresses;
  • their employee identification number; and
  • the name of the branch or office where they are posted.

Intermediaries and insurance intermediaries are required to also maintain a record of:

  • policies solicited with respect to new and renewal business;
  • claims, if serviced and processed or surveyed through an insurance intermediary or third-party administrator, as applicable; and
  • grievances and complaints with details such as:
    • the policy number;
    • the insurer's name;
    • the complainant's name;
    • the date of receipt of grievance;
    • the category of grievance;
    • a brief description of the grievance; and
    • details on the resolution process.

Board policy

Insurers, intermediaries and insurance intermediaries are required to have in place an appropriate policy that must be approved by their board of directors on the maintenance of records and the destruction of old records, both in physical and electronic form, in accordance with the regulations.

Other requirements

In addition to the requirements applicable to insurers, intermediaries and insurance intermediaries, the regulations stipulate the following requirements for information, data, documents and records that apply to all entities:

  • The IRDAI has clarified that insurers, intermediaries and insurance intermediaries are expected to maintain all relevant information, documentation and related papers with respect to their specific function at their principal place of business or branch office or offices.
  • The information, data and documents maintained is required to be reconciled with the audited financials, wherever relevant, and requirements of other applicable law and regulations.
  • The requisite information, data and documents per the regulations may be maintained either in physical or electronic form and must be made accessible to the persons authorised by the IRDAI.

Comment

The regulations will come into force six months after their publication in the Official Gazette (ie, in May 2021). Going forward, with the notification of the regulations and express guidance being issued on the minimum information and records required to be in place at all times, insurers and insurance intermediaries will be required to be able to provide prompt and ready access to these details when sought.