In exercise of the powers conferred by clauses (a), (db) and (zd) of sub-section 2 of section 114A read with Section 3 and 6A of the Insurance Act, 1938 (4 of 1938) and sections 14 and 26 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999), the Authority hereby makes the following regulations, namely: –
Objective: The objective of these regulations is to harmonize the provisions of various regulations applicable to insurance companies with Insurance (Amendment) Act, 2021 read with Indian Insurance Companies (Foreign Investment) Rules, 2015 by amending the corresponding regulations which are mentioned herein.
1. Short Title and commencement:
i. These regulations may be called the Insurance Regulatory and Development Authority of India (Indian Insurance Companies) (Amendment) Regulations, 2021.
ii. These Regulations shall come into force on the date of their publication in the Official Gazette.
CHAPTER I
Amendment to Insurance Regulatory and Development Authority (Registration of Indian Insurance Companies) Regulations, 2000
2. After regulation 5, the following regulations shall be inserted, namely: –
“Requirement of Resident Indian citizenship for Directors, Key Management Persons, etc.
5A. In an Indian Insurance Company having foreign investment, —
(a) a majority of its directors,
(b) a majority of its Key Management Persons, and
(c) at least one among the chairperson of its Board, its managing director and its Chief Executive Officer, shall be Resident Indian Citizens.
Explanation: For the purpose of this regulation, the expression “Resident Indian Citizen” shall have the same meaning as assigned to it in clause (o) of sub-rule (1) of rule 2 of Indian Insurance Companies (Foreign Investment) Rules, 2015.
Requirements for foreign investment exceeding forty-nine percent
5B. In an Indian Insurance Company having foreign investment exceeding forty-nine per cent. ,—
(a) for a financial year for which dividend is paid on equity shares and for which at any time the solvency margin is less than 1.2 times the control level of solvency, not less than fifty percent of the net profit for the financial year shall be retained in general reserve; and
(b) not less than fifty per cent of its directors shall be independent directors, unless the chairperson of its Board is an independent director, in which case at least one-third of its Board shall comprise of independent directors.”.
3. In Regulation 10,
a. In clause (e) of sub-regulation (2), the words “forty-nine percent” shall be substituted with words “seventy-four percent”.
b. In sub-regulation (2), clauses (f) and (g) shall be omitted.
c. In sub-regulation (2), after clause (f), the following clause shall be inserted, namely: –
“(fa) In case the applicant has foreign investment, an affidavit by the managing director, chief executive officer or whole-time director and the promoters of the applicant certifying that the requirement of regulation 5A shall be complied with.”
d. In sub-regulation (2), after clause (g), the following clause shall be inserted, namely:
“(ga) In case, the applicant has foreign investment exceeding forty-nine percent, an affidavit by the managing director, chief executive officer or whole-time director and the promoters of the applicant certifying that the requirement of regulation 5B shall be compiled with.
4. Regulations 29, 30 and 31 shall be omitted.
5. After regulation 31, the following regulation shall be inserted, namely: –
“31A. (1) Every Indian Insurance Company having foreign investment, existing on or before the date of commencement of the Indian Insurance Companies (Foreign Investment) Amendment Rules, 2021, shall within one year from the commencement of the rules, comply with the requirements of the provisions of regulation 5A of these regulations.
(2) An undertaking confirming compliance with provisions of Regulation 5A shall be filed by the Indian Insurance Company duly signed by the Chief Executive Officer and Chief Compliance Officer within 45 days from the date of the meeting of the Board of Directors, whereat such compliance has been confirmed.
(3) Every undertaking shall be accompanied by:
(i) A certified copy of resolution passed by the Board of Directors confirming the compliance of sub-regulation (1);
(ii) Where applicable, certified copy of the agreement / Joint venture Agreement where amendments to the agreement / joint venture agreement have been carried out to give effect to the provisions of these regulations.
(4) An existing Indian Insurance Company with foreign investment exceeding 49 percent shall ensure compliance with regulation 5B of these regulations.”.
CHAPTER-II
Amendment to Insurance Regulatory and Development Authority of India (Transfer of Equity Shares of Insurance Companies) Regulations, 2015
6. In Form B
a. In the row 16, the following shall be substituted:
“16. Where the Indian Insurance Company has Foreign investment, status of compliance of regulation 5A of Insurance Regulatory and Development Authority (Registration of Indian Insurance Companies) Regulations, 2000. (please attach a brief note on the same)”.
b. In row 17, the following shall be substituted:
“17. Where the Foreign investment in an Indian Insurance Company exceeds or shall exceed 49 percent, status of compliance of regulation 5B of Insurance Regulatory and Development Authority (Registration of Indian Insurance Companies) Regulations, 2000. (please attach a brief note on the same)”.
CHAPTER-III
Amendment to Insurance Regulatory and Development Authority of India (Issuance of Capital by Indian Insurance Companies Transacting Life Insurance Business) Regulations, 2015
7. Clause (vi) of sub-regulation (2) of regulation 5 shall be substituted with the following, namely: –
“Compliance with the Indian Insurance Companies (Foreign Investment) Rules, 2015 and any guidelines issued by the Authority in this regard;”.
8. Clause (b) of regulation 7 shall be substituted with the following, namely: –
“Consequent upon the dilution of shareholding by the promoter(s) and / or Investor (s) or issue of fresh capital, the applicant company shall not be compliant to the Regulation 5A and / or 5B of Insurance Regulatory and Development Authority (Registration of Indian Insurance Companies) Regulations, 2000”.
9. In form A, para 13 of the annexure to Application shall be substituted with the following, namely:-
“Confirmation of compliance with Indian Insurance Companies (Foreign Investment) Rules, 2015:
M/s …………………………. hereby confirms that it is compliant with the requirements of Section 2 (7A) (b) of the Act read with Indian Insurance Companies (Foreign Investment) Rules, 2015 and Regulations and any guideline issued by the Authority and shall continue to be compliant after the issue of capital in accordance with this application.”.
CHAPTER-IV
Amendment to Insurance Regulatory and Development Authority of India (Issuance of Capital by Indian Insurance Companies Transacting other than Life Insurance Business) Regulations, 2015
10. Clause (vi) of sub-regulation (2) of regulation 5 shall be substituted with the following, namely: –
“Compliance with the Indian Insurance Companies (Foreign Investment) Rules, 2015 and any guidelines issued by the Authority in this regard;”.
11. Clause (b) of regulation 7 shall be substituted with the following, namely: –
“Consequent upon the dilution of shareholding by the promoter(s) and / or Investor (s) or issue of fresh capital, the applicant company shall not be compliant to the Regulation 5A and / or 5B of Insurance Regulatory and Development Authority (Registration of Indian Insurance Companies) Regulations, 2000.”.
12. In form A, in annexure to Application, para 13 shall be substituted with the following, namely:-
“Confirmation of compliance with Indian Insurance Companies (Foreign Investment) Rules, 2015:
M/s …………………………. hereby confirms that it is compliant with the requirements of Section 2 (7A) (b) of the Act read with Indian Insurance Companies (Foreign Investment) Rules, 2015 and Regulations and any guideline issued by the Authority and shall continue to be compliant after the issue of capital in accordance with this application.”.
