Date:13/08/2004 URL: http://www.thehindubusinessline.com/2004/08/13/stories/2004081302500800.htm

Back Corporate governance norms for insurers soon

Our Bureau

Kolkata , Aug. 12

THE Insurance Regulatory and Development Authority (IRDA) has proposed to come out with a set of corporate governance norms that insurance companies, both life and non-life, must follow. The norms will be separate, but not dissimilar, from what are prescribed by the Securities and Exchange Board f India.

The insurance regulator has decided to set up a high-level committee, which will possibly be headed by a prominent personality, to work out the corporate governance practices that insurers and re-insurers must follow in the days ahead.

IRDA, said Mr T.K. Banerjee, Member (Life), will ensure that insurance sector players follow certain best practices in the interests of everybody concerned.

Multi-level marketing, for instance, is not permitted in India; the model prescribed by the likes of Amway, therefore, will not be relevant in the local context. The corporate governance code is likely to cover such issues as well.

"The responsibilities of a director of an insurance company will also be covered," Mr Banerjee said in response to a question. He was addressing a CII seminar on insurance in Kolkata on Thursday.

"Life Council, of which Mr Banerjee is Chairman, is expected to play a greater role in the days ahead. It is currently trying to establish a separate set-up aimed at insurance agents