IRDAI has come out with revised corporate governance norms in which it has mandated insurance companies to disclose the remuneration of MDs, CEOs, CIOs, operating officers, sales heads and other key officials in their annual reports. “These revised guidelines shall replace the existing guidelines on corporate governance from FY 2016-17,” said IRDAI.
The insurance regulator has clarified that incentives should also be a part of this disclosure.
In the circular, IRDAI said, “The IRDAI (Preparation of Financial Statements and Auditors’ Report of Insurance Companies) Regulations, 2002, have prescribed certain disclosures in the financial statements and the authority is in the process of finalizing additional disclosures to be made by insurers at periodical intervals. Elements of remuneration of package (including incentives) of MD & CEO and all other directors and management persons should be disclosed in the annual accounts.”
In addition, insurance companies have been directed to disclose the remuneration paid to non-executive directors in the annual report.
Currently, insurance companies disclose the salaries paid to all employees in a consolidated form. Also, insurance companies disclose compensation of managing directors and whole time directors which typically doesn’t include incentives.
Also, insurers will have to disclose rate of growth and financial position of the company in their annual reports.