IRDAI vide circular dated 30th January, 2023 has permitted the Insurers to pay profit related commission to non-executive director(s) including the non-executive director(s) appointed under section 48A of the Insurance Act, 1938, under the deemed approval mechanism, subject to the following conditions:
- The insurer has reported positive profit after tax for the period for which the said commission is proposed to be paid.
- The Board of the insurer has passed the resolution approving such payment.
- The amount of payment of remuneration in the form of profit related commission to each of the Non-Executive Director shall not exceed the limits specified in the Guidelines on Remuneration of Non-Executive Directors and Managing Director /Chief Executive Officer / Whole-time Directors of Insurers, as amended from time to time.
- Disclosures with regard to said payment shall be made in the financial statements for the respective financial year.
- The insurer shall comply with all other applicable laws in this regard.