Insurance companies basically play the role of pulling resources and investing it. They are often looked upon with a lot of expectations and are surrounded by a whole lot of social ideas and various complex economic patterns. The basic requirement expected from such companies by the authorities is reporting. Basically, it is mandatory for them to share the information in order to ensure better governance of the organization.
There are numerous law enforcement for better working of insurance companies. These include the Insurance Act 1938, the Foreign Exchange Management Act 1999. There are numerous other policies that are imposed on the insurance companies to ensure it's smooth working when dealing with complicated business and also to maintain a sort of transparency and accountability in the organization.
In this article, we shall cover all the important points for compliance requirements for insurance companies by IRDA in detail. So, let's get started!
The requirement for reporting under the Insurance Act
The insurance companies are always kept under check by the Insurance Regulatory and Development Authority India who regulates the policies imposed upon them.
- The insurance companies are thereby required to file Quarterly reports, monthly reports as well as annual reports to the respective Authority during the time period allotted to them.
- These reports can be filed either by the means of offline mode or the online mode during the given time period as stated by the Authority and the company should make sure that while filing these reports, they shall strictly follow the rules and regulations as prescribed to them.
- In addition to this, it is mandatory for the insurance company to also file monthly reports business information, policyholder grievances within the given time period. The same method applies to the filing of the quarterly as well as the annual reports.
- The insurance companies are also asked to put forward their overall performance of the company to the Authority which basically include the risks related topics and how they are dealt with, along with the policyholder details, management details as well as details of the claim.
- It is mandatory for the insurance companies to maintain the solvency margin ratio constantly and must also prepare their accounts as per the guidelines prescribed by the Authorities.
- An important requirement of the company is that the annual return must be filed in four copies within a period of six months to the authorities from the end of the financial year. In case if the business is carried outside India, this period is slightly extended by 3 months. It is a must that this annual report contains the signatures of the principal officer, two directors, and the chairman.
Reports of business taking place outside India
- For those insurers who have their business established outside India need to file four certified copies to the Authority in the English language for each of the balance sheet, account, statement, abstract and report
- In addition to this, the statement that is audited by an auditor or by a qualified person under the law of insurer's country should be supplied that indicates the information of all the assets possessed by the insurer in India itself as per the date stated in any of the balance sheets.
- So basically, they have to supply a separate abstract of the valuation report to the Authority before the due date prescribed to them.
Provision of the report under the Companies Act
Under the Companies Act, 2013 it is mandatory for all the insurance companies in India to be registered as a public company under this law. Therefore, these companies should abide by all the formulations and provisions under the Companies Act 2013 for public companies.
- These provisions basically include filing of resolutions to the Ministry of Corporate Affairs, the declaration from directors, appointment of directors and auditors, annual filings, etc. which are expected to be fulfilled by the companies that are registered under the Companies Act, 2013.
- The insurance companies registered under this Act are required to file numerous board resolutions related to topics such as resignation or appointment of directors, an appointment with auditors, problems related to shares, etc. with the ROC.
- The filing of the balance sheet in XBRL is exempted from the insurance company. Also, the annual return which they file in AOC-4 and MGT-7 needs to be filed within a period of 60 days of the AGM.
- Corporate Governance Guidelines is another provision that is issued by the IRDAI for the insurance companies. The company is required to strictly follow the provisions and also should strictly abide by the rules prescribed in these guidelines while forming the committees.
- In addition to this, the company is mandated to present the annual reports with due respect to the provisions in the guidelines and they must supply it to the Authority within the given time period.
Requirements for reporting under the FEMA
These provisions are specially designed and imposed for those insurance companies that possess foreign investments or have foreign promoters. It is mandatory for them to abide by the guidelines as prescribed by the FEMA.
- Under this provision, the foreign flow whether inflow or outflow should be disclosed to the Reserve Bank of India in the form as stated in their provision.
- Also, it is mandatory for the insurance companies coming under FEMA to produce an annual report that is filed in accordance with the provisions prescribed and within the specified time period to the RBI.
Thus, as per the laws formulated for various insurance companies, it is mandatory for these companies to abide by the provisions of these guidelines for smoother working of the organization.
Tags Corporate Law