In
exercise of the powers conferred by clause (zd) of sub-section (2)
of section 114A of the Insurance Act, 1938 (4 of 1938), the
Insurance Regulatory and Development Authority, in consultation with
the Insurance Advisory Committee, hereby makes the following
regulations, namely--
1.
Short title and commencement
(1)
These regulations may be called the Insurance Regulatory and
Development Authority (Appointed Actuary) Regulations, 2000.
(2)
They shall come into force from the date of their publication in the
Official Gazette.
2.
Definitions
(1)
In these regulations, unless the context otherwise requires,--
(a)
"Act" means the Insurance Act, 1938 (4 of 1938);
(b)
"Actuarial Society of India" means Actuarial
Society of India registered under Societies Registration Act, 1860
(21 of 1860);
(c)
"Appointed Actuary" means an actuary mentioned in
regulation 3 below;
(d)
"Authority" means the Insurance Regulatory and
Development Authority established under sub-section (1) of section 3
of the Insurance Regulatory and Development Authority Act, 1999 (41
of 1999);
(e)
"Professional Standard" means the standard of
practice specified, with the concurrence of the Authority, by the
Actuarial Society of India by issue of guidance notes to its
members.
(2)
All words and expressions used herein and not defined herein but
defined in the Insurance Act, 1938 (4 of 1938), or in the Insurance
Regulatory and Development Authority Act, 1999 (41 of 1999), shall
have the meanings respectively assigned to them in those Acts.
3.
Procedure for appointment of an Appointed Actuary
(1)
An insurer registered to carry on insurance business in India shall,
subject to sub-regulation (2), appoint an actuary, who shall be
known as the `Appointed Actuary' for the purposes of the Act.
A
person shall be eligible to be appointed as an appointed actuary for
an insurer, if he or she shall be--
(i)
ordinarily resident in India;
(ii)
a Fellow Member of the Actuarial Society of India;
(iii)
an employee of the life insurer, in case of life insurance
business;
(iv) an employee of the insurer or a consulting actuary, in case
of general insurance business;
(v)
a person who has not committed any breach of professional
conduct;
(vi)
a person against whom no disciplinary action by the Actuarial
Society of India or any other actuarial professional
body is
pending;
(vii)
not an appointed actuary of another insurer;
(viii)
a
person who possesses a Certificate of Practice issued by the
Actuarial Society of India; and
(ix) not over the age of seventy years.
(3)
An insurer shall seek the approval of the Authority for the
appointment of appointed actuary, submitting the application in Form
IRDA-AA-1.
(4)
The Authority shall, within thirty days from the date of receipt of
application, either accept or reject the same:
PROVIDED
that before rejecting the application, the Authority shall give an
opportunity of being heard to the insurer.
(5)
If an insurer does not receive approval within thirty days of the
receipt of such application by the Authority, the insurer shall deem
that the approval has been granted by the Authority.
(6)
An insurer, who is unable to appoint an appointed actuary in
accordance with sub-regulation (2), shall make an application to the
Authority in writing for relaxation of one or more conditions
mentioned in sub-regulation (2).
(7)
The Authority shall, on receipt of the application referred to in
sub-regulation (6), communicate its decision to the insurer within
thirty days of receipt of such application.
(8)
The appointment of an appointed actuary shall take effect from the
date of approval by the Authority.
4.
Effect of rejection of the application
The
insurer shall, within four weeks of rejection of the application
referred to under regulation 3, apply to the Authority for the
appointment of a person other than the one rejected by it under
regulation 3 as an appointed actuary, for the purposes of these
regulations.
5.
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
(1)
An appointed actuary shall cease to be so, if he or she has been
given notice of withdrawal of approval by the Authority on the
following grounds--
(a)
That he or she ceases to be eligible in accordance with
sub-regulation (2) of regulation (3), or
(b)
That he or she has, in the opinion of the Authority, failed
to perform adequately and properly the duties and obligations of an
appointed actuary under these regulations.
(2)
The Authority shall give an appointed actuary a reasonable
opportunity of being heard, if he 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), the
insurer and the appointed actuary shall intimate the Authority the
reasons therefor within fifteen days of such a cessation.
7.
Powers of appointed actuary
(1)
An appointed actuary shall have access to all information or
documents in possession, or under control, of the insurer if such
access is necessary for the proper and effective performance of the
functions and duties 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 the insurer.
(3)
The appointed actuary shall be entitled,--
(a) to attend all meetings of the management including the
directors of the insurer;
(b) to speak and discuss on any matter, at such meeting,--
(i)
that relates to the actuarial advice given to the directors,
(ii)
that may affect the solvency of the insurer,
(iii)
that may affect the ability of the insurer to meet the reasonable
expectations of policyholders, or
(iv)
on which actuarial advice is necessary;
(c) to attend--
(i)
any meeting of the shareholders or the policyholders of the insurer;
or
(ii)
any other meeting of members of the insurer at which the insurer's
annual accounts or financial statements are to be considered or at
which any matter in connection with the appointed actuary's duties
is discussed.
8.
Duties and obligations
In
particular and without prejudice to the generality of the foregoing
matters, and in the interests of the insurance industry and the
policyholders, the duties and obligations of an appointed actuary of
an insurer shall include:--
(a)
rendering actuarial advice to the management of the insurer,
in particular in the areas of product design and pricing, insurance
contract wording, investments and reinsurance;
(b) ensuring the solvency of the insurer at all times;
(c)
complying with the provisions of the section 64V of the Act
in regard to certification of the assets and liabilities that have
been valued in the manner required under the said section;
(d)
complying with the provisions of the section 64VA of the Act
in regard to maintenance of required solvency margin 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 thinks that action is required to be taken
by the insurer to avoid--
(i)
any contravention of the Act; or
(ii)
prejudice to the interests of policyholders;
(f) complying with the Authority's directions from time to time;
(g) in the case of the insurer carrying on life insurance
business,--
(i)
to certify the actuarial report and abstract and other
returns as required under section 13 of the Act;
(ii)
to comply with the provisions of section 21 of the Act in
regard to further information required by the Authority;
(iii)
to comply with the provisions of section 40B of the Act in
regard to the bases of premium;
(iv)
to comply with the provisions of the section 112 of the Act
in regard to recommendation of interim bonus or bonuses payable by
life insurer to policyholders whose policies mature for payment by
reason of death or otherwise during the inter-valuation period;
(v)
to ensure that all the requisite records have been made
available to him or her for the purpose of conducting actuarial
valuation of liabilities and assets of the insurer;
(vi)
to ensure that the premium rates of the insurance products
are fair.
(vii)
to certify that the mathematical reserves have been
determined taking into account the guidance notes issued by the
Actuarial Society of India and any directions given by the
Authority;
(viii)
to ensure that the policyholders' reasonable expectations have been
considered in the matter of valuation of liabilities and
distribution of surplus to the participating policyholders who are
entitled for a share of surplus;
(ix)
to submit the actuarial advice in the interests of the
insurance industry and the policyholders;
(h)
in the case of the insurer carrying on general insurance
business to ensure,--
(i)
that the rates are fair in respect of those contracts that
are governed by the insurer's in-house tariff;
(ii)
that the actuarial principles, in the determination of
liabilities, have been used in the calculation of reserves for
incurred but not reported claims (IBNR) and other reserves where
actuarial advice is sought by the Authority;
(i)
informing the Authority in writing of his or her opinion,
within a reasonable time, whether,--
(i)
the insurer has contravened the Act or any other Acts,
(ii)
the contravention is of such a nature that it may affect
significantly the interests of the owners or beneficiaries of
policies issued by the insurer,
(iii)
the directors of the insurer have failed to take such action
as is reasonably necessary to enable him to exercise his or her
duties and obligations under this regulation, or
(iv)
an officer or employee of the insurer has engaged in conduct
calculated to prevent him or her exercising his or her duties and
obligations under this regulation.
9.
Absolute privilege of appointed actuary
(1)
An appointed actuary shall enjoy absolute privilege to make any
statement, oral or written, for the purpose of the performance of
his functions as appointed actuary. This is in addition to any other
privilege conferred upon an appointed actuary under any other
regulations.
(2)
Any provision of the letter of appointment of the appointed actuary,
which restricts or prevents his duties, obligations and privileges
under these regulations, shall be of no effect.
10.
Applicability to reinsurance business
These
regulations shall apply to reinsurers carrying on reinsurance
business in India.
FORM
IRDA-AA-l
PARTICULARS
OF APPOINTED ACTUARY
1.
Name of Insurer:
2.
Name of Actuary:
3.
Residential Address with telephone number:
[Residential
addresses during the last five years have to be furnished]
4.
Official Address with telephone number:
5.
Date of Appointment:
6.
Date and Place of Birth:
7.
Annual Remuneration and Fringe Benefits:
8.
Shareholding (in per cent of shareholding) in the Indian
Insurance Company (for which the applicant is the Appointed Actuary)
and also in the promoter's companies, if any:
9.
Professional Qualifications:
10.
Working Experience (give also particulars of previous
experience as Appointed Actuary in India or elsewhere):
11.
Achievements and special positions held presently or
previously:
12.
Names, countries of incorporation, addresses and principal
activities of any other firms or companies in which the applicant
was a director, partner, proprietor or employee:
13.
Particulars of any criminal conviction for offences in India
or elsewhere:
14.
Has the applicant been adjudicated bankrupt during the last
ten years ? If so, give details:
15.
Has the applicant been disciplined by any professional bodies
or any insurance regulator? If so, give details:
CERTIFICATION
I
hereby certify that the information given in this form is complete,
true and correct, and also enclose the Certificate of Practice
issued by the Actuarial Society of India.
Place:
...............
Date:............................
Signature
of Actuary
Counter-signed
by the principal officer of the insurer:
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