On November 23, 2020, the IRDAI has notified the IRDAI (Minimum Information Required for Investigation and Inspection) Regulations, 2020. The Notification will come into force from May 24, 2021.
The objective of the Notification is to specify the minimum information required to be maintained by insurer, intermediary or insurance intermediary, so as to enable the investigating officer to discharge its functions under Section 33 of the Act.
Section 33(1) of the Act empowers IRDAI, if it considers expedient to do so, to direct an investigating officer to investigate the affairs of any insurer or intermediary or insurance intermediary and to submit its report on the investigation made.
Section 33(2) of the Act empowers the investigating officer to cause an inspection to be made of the books of account of any insurer or intermediary or insurance intermediary. Section 33(3) of the Act specifies that it shall be the duty of the “manager”, “managing director” and “other officer” of the insurer including a service provider, contractor of an insurer where services are outsourced by the insurer, or intermediary or insurance intermediary, to furnish all such “books of account”, “registers”, “other documents” and the “database” in its custody, and all such information, as may be sought by the investigating officer.
The investigating officer shall make a report of the investigation and submit the same to the IRDAI. Upon receipt of the report from the investigating officer, the IRDAI, after giving opportunity to give representation, may order in writing: • Require the insurer to take action in respect of any matter arising out of the inspection report; • Cancel the registration of insurer or intermediary or insurance intermediary, as the case maybe; and • Issue direction for winding up the insurer or intermediary or insurance intermediary, as the case maybe.
For the purposes of Section 33 of the Act, the expression “insurer” includes, in the case of an insurer incorporated in India: • all its subsidiaries formed for the purpose of carrying on the business of insurance exclusively outside India; and • all its branches whether situated in India or outside India.
The Notification defines ‘Minimum Information’ to mean the information specified under the Notification that insurers or intermediaries or insurance intermediaries are required to maintain.
The Notification is divided into 3 (three) parts: • Part I stipulates the provisions that are applicable to all insurers; • Part II stipulates the provisions applicable to the intermediaries and insurance intermediaries; and • Part III stipulates the general provisions applicable to the insurers, intermediaries and insurance intermediaries.
