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Indranath Bishnu

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Partner (Head – Insurance) with Cyril Amarchand Mangaldas. 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

Policy Wordings - Lost in Translation?

The reasons for lower insurance penetration in India are multifaceted. However, one of the main factors is limited financial literacy and awareness. Typically, legalese in the policy document makes interpretation and  understanding a challenge. Globally, the World Bank, OECD, and several other associations/ authorities have expressed the need for transparent communication to build consumer trust and confidence in the insurance industry. Given the current Indian demographics, the need of the hour is to simplify policy wordings to assist in greater financial awareness and aid the goal of insurance coverage for all.Continue Reading Policy Wordings – Lost in Translation?

A Review of the Performance of Surety Insurance Contracts in India

Introduction:

Surety insurance bonds (“Surety Bonds”) are a proven risk management mechanism, useful especially in the infrastructure, construction projects, and government procurement space. Surety Bonds can be an effective alternative financial solution to the principals/ contractors, who had to depend on bank guarantees earlier. Continue Reading A Review of the Performance of Surety Insurance Contracts in India

IRDAI Regulatory Reform Series: Listing of Indian Insurance Companies on Stock Exchanges

Background

On March 20, 2024, the Insurance Regulatory and Development Authority of India (“IRDAI”) notified the IRDAI (Registration, Capital Structure, Transfer of Shares and Amalgamation of Insurers) Regulations, 2024 (“Registration and Capital Regulations”), which consolidated and rationalised the regulatory framework applicable on an Indian insurer in aspects, including listing on a stock exchange pursuant to an initial public offer (“IPO”) that may consist of a fresh issue of equity shares or an offer for sale. Our detailed analysis on the other aspects of Registration and Capital Regulations can be found here.Continue Reading IRDAI Regulatory Reform Series: Listing of Indian Insurance Companies on Stock Exchanges

IRDAI Regulatory Reform Series: Registration and Capital Structure of Indian Insurance Companies

Background

The Insurance Regulatory and Development Authority of India (“IRDAI”) has a statutory duty to regulate, promote and ensure orderly growth of the insurance business and reinsurance business in India. Based on the IRDAI’s initiative to promulgate consolidated and principle-based regulations to govern the insurance industry, the Life Insurance Council and General Insurance Council (representative bodies of life and general insurers, respectively) constituted the Regulation Review Committee (“RRC”) to review the entire insurance regulatory framework and recommend principle-based regulations.Continue Reading IRDAI Regulatory Reform Series: Registration and Capital Structure of Indian Insurance Companies

Primer on IRDAI Information and Cyber Security Guidelines 2023

Introduction

On September 14, 2023, the Insurance Regulatory and Development Authority of India (“IRDAI”) set up an inter-disciplinary standing committee on cyber security, tasked with regularly reviewing the threats inherent in the existing or emerging technologies and suggest appropriate changes to the IRDAI Information and Cyber Security framework to further strengthen the insurance industry’s cyber security posture and resilience.[1] This is in furtherance to the IRDAI having notified the Information and Cyber Security Guidelines on April 24, 2023 (“CS Guidelines 2023”).Continue Reading Primer on IRDAI Information and Cyber Security Guidelines 2023

Arbitrability of insurance disputes – IRDAI clears the air

Recently, the Insurance Regulatory and Development Authority of India (“IRDAI”) has settled the ambiguity surrounding arbitrability of insurance disputes vide its circular titled Amendment of Arbitration Clause in General Insurance Policies dated October 27, 2023 (“Circular”)[1]. This issue stems from the All India Fire Tariff  (“AIFT”) issued by the Tariff Advisory Committee (“TAC”) on May 31, 2005.Continue Reading Arbitrability of insurance disputes – IRDAI clears the air

Indian Regulatory Perspective on Non-traditional Reinsurance Solutions

Introduction

A dynamic risk market demands insurance companies to constantly seek new solutions to manage their capital and risk position. This position is further challenged by volatile financial markets, low interest rates, and of course, competition. As insurers assess their risk appetite and aim to achieve an optimal balance of risk, reinsurance solutions have proved to be an effective solution. While traditional reinsurance solutions are effective tools for risk management, ‘Non-traditional Reinsurance Solutions’, are oriented towards providing specific business solutions rather than pure risk transfer. In this piece, we discuss the insurance regulatory framework around Non-traditional Reinsurance Solutions in India.Continue Reading Indian Regulatory Perspective on Non-traditional Reinsurance Solutions

Indian Regulatory Perspective on Non-traditional Reinsurance Solutions

Background

The Insurance Regulatory and Development Authority of India (“IRDAI”) has notified the introduction of first phase of pilots for implementing ‘Risk Based Supervision’ (“RBS”) framework for the insurance sector in India[1], commencing from July 2023. The IRDAI has collaborated with M/s Toronto Centre[2] for the aforesaid project. According to the IRDAI press release, RBS is a shift towards adopting global best practices for supervision which focuses on proportionality, materiality and relies on holistic analysis of the activities of regulated entity from risk perspective. The IRDAI’s intention to shift to the RBS framework for the insurance sector was first divulged vide a notification in October 2018[3], which listed the following benefits for insurance supervision[4]:Continue Reading Risk Based Supervision: Pilot Basis for New Regime to Take Off?

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