The Authority in exercise of its powers conferred under Section 14 of Insurance Regulatory and Development Authority Act, 1999 read with section 34A of the Insurance Act, 1938 proposes to issue guidelines governing compensation of Whole-time Directors / Chief Executive Officers / Managing Directors of Insurers as per attached draft.
The draft guidelines provides for the following
1. The guidelines shall be applicable for remuneration payable to CEO / WTD/ MD / Manager of Private Insurers;
2. Insurers should formulate and adopt a comprehensive compensation policy and conduct annual review thereof;
3. Insurer to ensure that the compensation of the MD/ WTDs / CEOs is adjusted for all types of risk. The risk adjusted methods should preferably have both quantitative and judgmental elements;
4. Insurers are required to ensure that the fixed portion of compensation is reasonable taking into account all relevant factors;
5. The variable pay could be in cash, stock linked instruments or mix of both. However, Employees Stock Option Plan (ESOP) may be excluded from components of variable pay;
6. Provision for :
o deferral where the variable pay is substantial;
o clawback where the parameters are not met;
o Disclosures of qualitative and Quantitative
All are requested to offer their valuable comments / suggestions on the proposed guidelines for consideration of the same.
The comments/suggestions should reach us by 21st September, 2015 to the undersigned by e-mail at firstname.lastname@example.org with a copy to Dr. Mamta Suri, HOD-F&A at email@example.com
R K Sharma