Photo of Indranath Bishnu

Indranath is a partner with Cyril Amarchand Mangaldas and is a part of the general corporate practice in the Mumbai region. His work is focussed on the Insurance industry where he specializes in mergers and acquisitions and joint ventures and regulatory matters. He is currently  leading the team from Cyril Amarchand Mangaldas engaged to advise the Regulations Reforms Committee constituted by the Insurance Regulatory and Development Authority. He has advised various government bodies including Department of Financial Services (Ministry of Finance) and the Insurance Regulatory and Development Authority of India on reforms in the insurance sector. He currently serves as a member on the committee constituted by the Insurance Regulatory and Development Authority of India to study and recommend capital requirements for Insurance entities. On the transactional side, Indranath advises multiple corporations, both Indian and foreign, in relation to investments in the insurance sector as well as establishment, operation, management and control of insurance companies and intermediaries in India.  He can be reached at indranath.bishnu@cyrilshroff.com

Remuneration to Directors and KMPs of Insurers – Enhanced Guidelines with Extended Coverage

Introduction

The remuneration payable to Chief Executive Officers (“CEOs”), Whole-Time Directors (“WTDs”) and Managing Directors (“MDs”) of insurance companies is governed under Section 34A of the Insurance Act, 1938. This provision requires insurers to procure prior approval from the Insurance Regulatory and Development Authority of India (“IRDAI”) in relation to such remuneration. The IRDAI (Remuneration of Non-Executive Directors of Private Sector Insurers) Guidelines, 2016 and IRDAI (Remuneration of Chief Executive Officer/Whole Time-Director and Managing Director of the Insurers) Guidelines, 2016 dated August 5, 2016 (collectively, the “Erstwhile Guidelines”) have historically governed this matter. In supersession of the Erstwhile Guidelines, the IRDAI has recently notified the Guidelines on Remuneration of Directors and Key Managerial Persons of Insurers, on June 30, 2023, which includes the IRDAI (Remuneration of Non-Executive Directors of Insurers) Guidelines, 2023 and IRDAI (Remuneration of Key Managerial Persons of Insurers) Guidelines, 2023 (collectively, the “Revised Guidelines”). The Revised Guidelines are effective from the FY 2023-24 i.e. from April 1, 2023 and the insurers are required to complete the process of framing/reviewing the remuneration policy within three months of the issuance of the Revised Guidelines.Continue Reading Remuneration to Directors and KMPs of Insurers – Enhanced Guidelines with Extended Coverage

Liberalisation of Expenses of Management Limits and Linkage with Commission: Impact on the Insurance Industry

Introduction

Pursuant to Sections 40B and 40C of the Insurance Act, 1938 (“Insurance Act”), the Insurance Regulatory and Development Authority of India (“IRDAI”) is empowered to regulate and impose limits on the amount that insurance companies may spend on Expenses of Management[1] (“EoM”). Further, in terms of Section 40 of the Insurance Act, no insurer is permitted to pay, or agree to do so, to any insurance agent or intermediary, commission or remuneration in any form other than in the manner specified by the IRDAI through a regulation.Continue Reading Liberalisation of Expenses of Management Limits and Linkage with Commission: Impact on the Insurance Industry

Introduction

Vide an office memorandum dated November 29, 2022, the Department of Financial Services (Ministry of Finance), Government of India (“DFS”) has proposed extensive amendments to the Insurance Act, 1938 (“Act”) by way of the Insurance Laws (Amendment) Bill, 2022 (the “Amendment Bill”) in order to address the persistent demands of the insurance industry and to change some of the basic principles under the Act. The discussion on the overall nature of changes brought about by the Amendment Bill can be found in our blog post dated December 13, 2022.Continue Reading Looking Beyond Core Insurance Business: Insurers Allowed to Offer Value Added Services and Engage in Distribution of Other Financial Products

Highlights of the Master Circular on IRDAI (Registration of Indian Insurance Companies) Regulations, 2022

Introduction

Four months after the Insurance Regulatory and Development Authority of India (“IRDAI”) notified 2022 Regulations that streamline registration and share transfer requirements of Indian insurance companies, the IRDAI has issued a master circular titled ‘Master Circular on Registration of Indian Insurance Company, 2023’ dated April 24, 2023 (“Master Circular”) to supplement the procedural aspects of 2022 Regulations.Continue Reading Highlights of the Master Circular on IRDAI (Registration of Indian Insurance Companies) Regulations, 2022

Introduction

The Insurance Regulatory and Development Authority of India (“IRDAI”) has notified the IRDAI (Registration of Indian Insurance Companies) Regulations, 2022 (“2022 Regulations”), on December 8, 2022. The 2022 Regulations consolidate various prescriptions relating to registration of Indian insurance companies and the transfer of shares of such entities. Previously, such prescriptions were dispersed across multiple regulations, circulars, and guidelines such as the IRDAI (Listed Indian Insurance Companies) Guidelines, 2016, and the IRDAI (Investment by PE Funds in Indian Insurance Companies) Guidelines, 2017 (“2017 PE Guidelines”).Continue Reading IRDAI (Registration Of Indian Insurance Companies) Regulations, 2022 – A Step-Up for Private Equity Participants

Insurance Laws

Introduction

The Government of India, through the Department of Financial Services (Ministry of Finance) (“DFS”), is proposing extensive amendments to the Insurance Act, 1938 (the “Act”), with a view to enhance insurance penetration, improve efficiency, and enable product innovation and diversification[1]. The DFS published an office memorandum dated November 29, 2022 (“DFS Memorandum”), setting out the proposed amendments to the Act and commencing a process of public consultation on the proposed amendments until December 15, 2022. The Insurance Laws (Amendment) Bill, 2022 (the “Amendment Bill”), is seen to be catering to the long-standing demands of the industry and seeks to improve some of the fundamental tenets of the Act.Continue Reading The Insurance Laws (Amendment) Bill, 2022 – Charting a new course

Appointment of Common Directors between Intermediaries and Insurers IRDAI Resolves the Conundrum!

Common Directors under Section 48A of the Insurance Act, 1938

The appointment of the same individual on the Board of Directors (“Board”) of both an insurer and an insurance intermediary (brokers, corporate agents and web aggregators) (“Common Director”) is currently prohibited under Section 48A[1] of the Insurance Act, 1938 (“Act”). However, the Insurance Regulatory and Development Authority of India (“IRDAI”) is empowered to permit an intermediary to be a director on the Board of an insurance company subject to the conditions and restrictions as may be imposed by the IRDAI. Therefore, if an insurer were to appoint Common Directors on its Board, a prior IRDAI approval is a critical requirement.Continue Reading Appointment of Common Directors between Intermediaries and Insurers: IRDAI Resolves the Conundrum!

Point of Sales Persons An Alternate Distribution Channel for Insurers

Introduction

The Insurance Regulatory and Development Authority of India (“IRDAI”) permits insurance companies and intermediaries to appoint individuals (i.e. natural persons) as Point of Sales Persons (“PoSPs”). PoSPs are essentially individuals who are permitted to carry out activities pertaining to solicitation and marketing of insurance policy products and act as distribution channels for insurers or intermediaries. In accordance with the provisions of the Insurance Act, 1938, sale and solicitation of insurance products can only be carried out by entities licenced by the IRDAI, i.e. either insurers or intermediaries. PoSPs, despite not being “licenced persons”, are “qualified persons” (as discussed below) and carry on the activity of sale and solicitation of insurance products. They are sponsored by insurers or intermediaries to carry on sale and solicitation activities.Continue Reading Point of Sales Persons: An Alternate Distribution Channel for Insurers

Insurance Linked Securities

Background and Introduction

Insurance linked securities (ILS) is an umbrella term covering instruments that are designed to transfer insurance risks to the financial market. The performance of ILS is typically also linked to the possible occurrence of such insurance risks. ILS, in global financial markets, is not a novel concept and the earliest known issuance of ILS by reinsurance companies was in the US in 1992, in the aftermath of Hurricane Andrew. In fact, ILS has been used multiple times by reinsurance companies in the US when their capacities were severely affected by the occurrence of natural disasters like earthquakes and hurricanes and even man-made disasters like the World Trade Center bombing.Continue Reading Insurance Linked Securities – A Viable Alternative to Reinsurance?

Evolving Insurance Landscape in IFSC

The Gujarat International Financial Tec-City (“GIFT City”) in Gandhinagar, Gujarat, is India’s first operational greenfield smart city, housing a domestic tariff zone and an International Financial Services Centre (“IFSC”) in a Multi-service Special Economic Zone (“SEZ”). As part of developing India’s very own and first IFSC, both Indian and foreign entities are permitted to establish and operate IFSC Insurance Offices (“IIO”) from GIFT City, upon obtaining the requisite approvals. The IIOs have the advantage or the ability to transact in freely convertible foreign currencies in offshore markets, while being situated within the territorial borders of India. From 2015 to early 2020, the Insurance Regulatory and Development Authority of India (“IRDAI”) issued guidelines for IIOs (“IRDAI IIO Guidelines”). Thereafter, pursuant to the International Financial Services Centres Authority Act, 2019, the International Financial Services Centres Authority (“IFSCA”) was empowered on October 1, 2020 as the unified regulator with wide powers to develop and regulate financial products, financial services, and financial institutions in IFSCs, including IIOs.Continue Reading Evolving Insurance Landscape in IFSC