New Delhi, May 26 (IANS) Insurance Regulatory and Development Authority of India (IRDAI) has tightened rules on top executive remuneration, linking their bonuses and incentives to measurable customer outcomes, financial health and transparency disclosures.
IRDAI said remuneration of Key Management Personnel (KMPs) including chief executives must be aligned with defined performance parameters such as claims settlement speed, grievance redressal and product performance.
Cost efficiency, policy retention and complaint resolution rates are some other parameters. Compliance with accounting standards and removal of misleading “dark patterns” in customer interactions will carry fixed weightage among assessable parameters.
At least 50 per cent of KMP performance evaluation must be based on these core parameters from FY27.
The disclosure of claim responsiveness should comprise proportions of claims settled within 15 days, 30 days, 60 days, and beyond from the date of filing of the claims and remaining unsettled at the end of the month being reported upon.
“The performance of the insurer in respect of parameters adopted for remuneration of all KMPs shall be disclosed on the company’s website along with corresponding information for the preceding 3 years,” the circular said.
These performance metrics must be published in a simple, accessible format, and the move is aimed at enabling policyholders to make more informed decisions.
The Board shall decide improvement benchmarks based on the company’s business strategy, and assess the performance accordingly only when complete and consistent disclosures are made.
The new framework mandates frequent disclosures, with financial soundness indicators published quarterly, and product performance, claims responsiveness as well as grievance handling metrics disclosed monthly.
Meanwhile, the Union government has notified 100 per cent foreign direct investment (FDI) in the insurance sector under the automatic route, paving the way for greater participation by overseas investors.
Foreign investment in insurance companies will be subject to compliance with provisions of the Insurance Act, 1938, and mandatory approval from the Insurance Regulatory and Development Authority of India (IRDAI) for undertaking insurance and related activities.
—IANS
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