IRDAI proposed a revised guidelines for remuneration for non-executive directors and persons in key managerial positions of private insurers to ensure alignment of compensation with prudent risk management.
In an exposure draft, the IRDAI said private sector suggested that insurers should formulate and adopt a comprehensive board-approved remuneration policy covering all the key managerial persons.
“The policy should be formulated such that the performance based variable remuneration shall not encourage key managerial persons to take inappropriate or excessive risks,” it said.
The existing guidelines which came into effect from October, 2016 are the framework for remuneration of non-executive directors and CEO/WTD/MD of private insurers.
The guidelines have been in force for over 6 years and based on the experience of implementation, IRDAI has proposed to “bring remuneration of other key managerial persons (KMPs) also within the ambit of the guidelines”.
