The Insurance Regulatory and Development Authority will soon come out with guidelines on the issue of management control in insurance companies in order to remove the prevailing confusion in the sector.
“The Act clearly says that being a major shareholder, the management control should be with the Indian partner. However, we are working on it and the final guidelines will come up shortly on the same. We will bring the guidelines under corporate governance structure,” IRDA Chairman TS Vijayan said. After foreign direct investment (FDI) limit was hiked to 49 per cent from the previous 26 per cent, there was confusion whether foreign partners can take control of the management. The management control and day-to-day affairs of some some joint venture insurance firms operating in India are now with the foreign partners.
“The regulations on the management control will now come under the corporate governance structure,” Vijayan said on the sidelines of the CII insurance summit. IRDA is currently working on around 40 new regulations for the sector.