IRDA (Appointed Actuary) Regulations, 2000

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY NOTIFICATION New Delhi, the 14th July, 2000 Insurance Regulatory and Development Authority (Appointed Actuary) Regulations, 2000 F. No. IRDA/Reg./7/2000.- .lu exercise of the powers conferred by clause (zd) of sub-section (2) of section 114A of the Insurance Act, 19l8 (4 of 1938), the Insurance Regulatory and Development Authority, in consultation with the Insurance Advisory Comnuttee, hereby makes the following regulations, namely:- 1. Short title and commencement.- ( I) These regulations may be called the Insurance Regulatory and Development Authonty (Appointed Actuary) Regulations. 2000. (2) They shall come into force from the date of thetr publication in the Official Gazette. 2. Definitions.-( I) In these regulations. unless the context otherwise requires --- (a) "Act" means the Insurance J\c1, 1938 (4 of 1938); (b) ''Actuarial Society .of lnd1u" meuns Ac1uum1I Society of India registered under Societies Registration Act 1860; (21 of 1860). (c) "Appointed Actuary" means an uctuury mennoned in Regulation 3 below; (d) "Authority" means the Insurance Regul:nory and Development Authority established under sub-section (I) of section 3 of the Insurance Regulatory und Development Authority Act, 1999 (41 of 1999); (e) "Professional Standard" means the standard of practice specified, with the eonc~rrence of the Authority, by the Actuarial Society of lndlll by issue of gu1dunce notes ro 11s members. (2) All words and expressions used herein and not defined herein but defined in the Insurance Act, 1938 (4 of I 938 ). or m the l11surance Regulatory and Development Authority Act, 1999 ( 41 of 1999), shall have the meanini;s respecuvely assigned to them m those Acts. 3. Procedure for Appointment ot an Appointed Actuary.---( l) An insurer registered to cany on insurance business m Indra shall. sub,1cct to sub-regulation (2). appoint an actuary, who shall be known as the 'Appointed Actuary' for the purposes of the Act. (2) A person shall be eligible to be appointed as an appointed acruary for an insurer, if he or she shall be-- (1J ordinarily resident in India. (ii) a Fellow Mcmher of 1hc Ae1uurial Society of India; ['tT'TID-~4] (iii) an employee of the hfe insurer. in case of life insurance business; (1v) an employee of the insurer or a consulting actuary, in case of general insurance business; (1v) a person who has not committed any breach of professional conduct; (v) a person against whom no d1c;c1plinary action by the Actuarial Society of India or any other actuanal professional body 1~ pending: (v1) not an appointed actuary of another insurer: (vii) a person who possesses u Cemficate of Pracuce issued by the Ac:tuanal Society of India; and (v11i) not over the ,11:e of seventy years. (3) An insurer shall seek the approval of the Authority for the appointment of appointed actuary, submitting the application in Fonn IRDA-AA-1. (4) The Authority shall. within tluny days from the date of receipt of application, either accept or reject the S8JJ¥: Provided that before the rejecting the apphcahon, the Authonty shall give an opportumty of being heard to the insurer. (5) If an insurer does not receive approval within tht.rty days of the receipt of such applicat10n by the Autbonty, the msurer shall deem that the approval has been granted by the Authority. (6) An insurer, who is unable to appoint an appointed actuary m accordance with sub-regulation (2), shall make an apphcatton to the Authority in wntirfg for relaxation of one or more c,md1tions mentioned in sub-regulation 2. (7) The Authority shall. on receipt of the application referred to in sub-regulation (6), commUDJcate its '1ec1sion to the msurer within tht.rty days of receipt of such apphcation. (8) The appointment of an appointed actuary shall take effect from the date of approval by the Authonty. 4. Effect of rejection of lhe application.-The insurer shaJI, within four weeks of reJection of the application referred to under regulabon 3. apply to the Authority for the appomtment of a person other than the one rejected by 11 under regulation 3 as an appointed actuary, for the purposes of these regulations. S. Life Insurer not to carry on business of insurance without an appointed actuary.- A life insurer shall not carry on business of insurance without an appointed actuary 6. Cessation of Appointment of Appointed Actuary.-{ I) An appointed actuary shall cease to be so. if he or she has been given nouce ol withdrawal of approval by the Authonty on the followmg grounds:- (a) lhll h.: or ~he: cc~~> tu he: chg1hlc tn .icconlancc w11h sub-regulation (2) of regulauon (l), or; , (hi 1ha1 he or she ha,. 1111he opm11111 nl the Authonty. tailed to perform adequately and properly the duucs and obhgauons of an u1111<11nted actuJry under thcs<· 1C!!llla11ons (2) The Authority shall give an appointed actuary a reasonable opportunity of being heard, tfhe or she has been given a notice of withdrawal of approval by it. (3) If a person ceases to be an appointed actuary of an insurer otherwise than on the grounds mentioned in sub- regulation ( 1 ), lhe msun:r and the appomted actuary shall mtimate the Authonty the reasons therefor within fifteen days of such a cessauon. 7. Powers of Appointed Actuary.--( I) An appointed actuary shall have access to all information or documents m possession. or under control. of the msurer tf such access 1s necessary for the proper and effective performance of the func11ons and duttes of the appointed actuary. (2) The appointed actuary may seek any information for the purpose of sub-regulation ( 1) of this regulation from any officer or employee of 1he insurer. (3) The appointed actuary shall be entitled. -- (a) 10 attend all meetings of the management including the directors of the insurer; . - 7 8 THE GAZETTE OF INDIA : EXTRAORDINARY (b) ~ speak and discuss on any maner. at such meeting,-- (,, 111.11 rd~•~ 111 the :idu:m:il :idvrcc Ffvcn tu the threctors; Cul 1hat n,;iy alltct the -,nlvency 111 the msu1cr; (in) thllt may allcc1 the ah1h1y ol lhc- insurer 10 meet the reasonahlc expectations of policyholders; or 11vJ on 11.h1ch actuarial :i.tv1ce 1s nc~cssory; (c) to attend,-- 111 illly meeting or 1hc \l~rchol<.lcrsor the pohcyholder.. of the insurer; or [P ARI' lli-SBC. 4] (i1) any ,ithcr mcc11n11 ol mc,nbcr,; nt the insurer at which 1he •n~un:f's 111nual accounts or linanc1al statements arc to be c0tmden:d or ar ..., h1ch ;iny mane, 1n conncctton with the appointed :ictuary's duties 1s discussed. II. Duties and obligations.- In particular and without prejudice to the generality of the foregomg matters, and m the interests of the insurance mdustry and the policyholders, the duties and obligations of an appomted actuary of an msurcr shall include; - (a) rcndenng acru,mal advice to the management of the insurer, in particular in the areas of product design and pncmg. insurance contract wording, investments and reinsurance; (b) c:nsunng the solvency ol tl1e insurer :u all times: (c) complying \\llh the prov1s1ons of the section MV of the Act in regard to cernfication of the assets and liabilities that have heen valued in tbe manner required under the said section; ( d) complying with the provisions of the c;ection 64 VA of the Act in regard to maintenance of reqmred· solvency maq;m in the manner required under the said section; (e) drawing the attention of management of the insurer, to any matter on which he or she thmks that action 1s required to be taken by the msurer to :ivo1d- (i) any contr-Jventton ul lhc Act: or (111 pre1ud1ce 10 thl' m1cres1s ofpoh.:)'holders: (I) complying with the Authority's direcuons from lime to ttme; (g) in the case of the insurer carrying on life msurance business,- ( i) 10 ccmfy rhe actuunal repon and abstract and other returns as required under sectron 13 of the Act; (1i) to comply wuh the provisions of section 21 of the Act m regard to funher information required by the Authority. ( 1 i 1) to comply w11h the prov1s1ons ol sectron 40-B of the Act 1n regard 10 the bases of premium; ( 1v) to comp I} w,rh the pro, isions of the section 112 of the Act in regard to recommendation of interim bonus or bonuses payable by life insurer to policyholders whose polrcres mature for payment by reason of death or lllherw1se dunng the mter-v.ilua11on period. (v) to ensure that all the rcqu,slle records have been made available to hrm or her for the purpose of conducting actuarial valuatron of ltJbilttres und assets of the insurer; (, r) ro ensure that the premium rate~ of the msurJnce products are fair; (v11) to cemfy that tile m..tthcmaucal resef\es have been determined taking into account the guidance notes issued J by the Ac1uanal Socretv of Indra and any d1rec11ons grven by the Authority: (vm) to ensure that rhc poltcvholde1s' reasonable expec1a11ons have been considered m the maner ofvaluauon of lrab1l111cs .ind d1stnhu11on ol surplus to the pa11ic1patmg policyholders who are enmled for a share of surplus; ( •~) to subn111 the :ictu:inal ad nee m 1he interests of the insurance industry and the policyholders; (h) in the case of the insurer carrying on general insurance business to ensure, - ( 1) that the rates :m: f:ur m respect ol 1hose contracts th.st are governed by the insurer's m-house tariff; ( 1i) that the actuan ... l pnncrples. in the de1erm1na11on of lrab1h11cs. ha\'e been used in lhe calculatron of reserves for incurred but not reported claims (IONR) and other reserves where actuarial advice 1s sought by the Authority; (1) informing the Authority rn writing of his or her opm1on, within a reasonable time, whether,- (1) the insurer hJs contravened the Act or any other Acts, ( 11) the contravcnllon 1s of such a nature that rt may affect s1gmficantly the interests of the owners or beneficrarrcs of policies issued by the insurer. (111) rhc directors ot the insurer have h11lcd to take such ac11on as is reasonably necessary to enable hrm to exercise hrs or her duties and obltgauons under this regulauon; or (1v) an officer or cmplo~ce olthe insurer has engaged rn conduct calculated to prevent him or her exercrsmg hrs or her dulres and obltgattons under this regulation