The Insurance Regulatory Authority of India (IRDAI) on 3rd August 2022 has published the IRDAI (Expenses of Management of Insurers transacting life insurance business) Draft Regulations, 2022 which shall be applicable to Insurers transacting the life insurance business in India.
Some of the key changes being proposed in the regulations are: –
- Compliance with limits of Expenses of Management (EoM) to be on an overall, aggregated basis for Par, Non-Par and Linked business and not on segmental basis;
- Discontinuation of the provisions for seeking forbearance for non-compliance on segmental basis;
- Additional allowance for insurers with duration of business up to 10 years;
- Additional allowances for incremental Rural sector and the specified schemes;
- Additional allowances towards expenses incurred on Insurtech, implementation of Ind AS and Insurance Awareness;
- Board approved policy on EoM to be the basis for compliance; and
- Rationalization of the other compliance requirements.
All insurers transacting Life insurance business, at the expiration of each financial year, shall prepare with reference to that year a Return of Expenses of Management. The Return shall be signed by the Chief Executive Officer, the Chief Financial Officer and the Chief Compliance Officer of the Insurer.
The Return shall be certified by the Statutory Auditor of the Insurer and the certificate duly signed by at least one of the statutory auditors. The Statement of Expenses of Management duly adopted by the Board, shall be filed with the Authority along with other Returns in the manner and within the time specified therein.
