The Insurance Regulatory and Development Authority of India (IRDAI) notified the Minimum Information Required for Investigation and Inspection Regulations, 2020 which will come into action from May 24, 2021, onwards. This notification deals with the minimum information that insurers, brokers, or insurance intermediaries are required to maintain on a continuous basis.
The ‘Minimum Information’ notification is divided into 3 (three) parts:
- Part I deals with the provisions that are applicable to all insurers
- Part II deals with the provisions applicable to the intermediaries and insurance intermediaries
- Part III deals with the general provisions applicable to the insurers, intermediaries, and insurance intermediaries.
To detail the minimum information required to be maintained by insurer, intermediary, or insurance 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.
Implications to brokers/other insurance intermediaries
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. Section 33(3) of the Act specifies that it shall be the duty of the broker or insurance intermediary, to hand over 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.
These records and information can be used by the investigating officer to draft his/her investigation report which should be submitted to the IRDAI.
With respect to this report given by the investigating officer, the IRDAI, after giving opportunity to give representation, may order in writing:
- Require the broker to take action in respect of any matter arising out of the inspection report
- If needed, cancel the registration of insurer, broker or other insurance intermediary
- Take actions and issue directions for winding up the insurer, broker, or insurance intermediary
Provisions applicable to brokers/other insurance intermediaries
As per Regulation 17, every intermediary and insurance intermediary is required to maintain all records, information, data, documents, books, or registers required to be maintained by it.
Following are the records that every insurance intermediary shall maintain:
- Record of all your employees
- Record of policies – new and renewal businesses
- Record of claims you processed
- Record of your reinsurance businesses
- Record of grievances and complaints
- All agreements entered with third parties
- Obtain and maintain a receipt for every payment made and issue a receipt for every payment received
- Maintain records with respect to the organization and its activities including correspondences with Government and tax authorities
- The information can be maintained in physical or electronic form
- ·The insurer, brokers, and other insurance intermediary must maintain a systematic and an “appropriate policy” of records
- The records are to be maintained for a minimum of 10 years from the date of the last transaction of the respective records