Hyderabad, May 1 The Insurance Regulatory and Development Authority (IRDA) has asked insurance companies to keep the authority updated on all appointments/ reappointment of statutory auditors.

The Authority had asked the Chief Executive Officers (CEOs) of all insurance and reinsurance companies to inform of any changes in the statutory auditors within a week (from such change).

The CEOs have also been asked to send a certificate stating that all the stipulations of IRDA were adhered to in the appointment along with the details of new appointment and the record of statutory auditors for the last five years.

Further, the insurers should also file a return on an annual basis with details of chartered accountant firms engaged in various other capacities such internal auditors, concurrent auditors, tax auditors and others.

Satyam episode

“Of late, there has been an increased focus on corporate governance aspects of the insurance companies due to the bad precedent set by the Satyam fraud. Going forward, there will be closer monitoring of accounting practices to ensure transparency,” a senior IRDA official told Business Line.

Investment patterns

The authority is also monitoring the investment patterns of the company.

“We are now obtaining details of scrip-wise investments supporting various categories of assets such as approved securities, investments, deposits, non-mandated investments and other assets,” he said.

The authority is also of the opinion that sustaining expenditure (to get new business and operations expenses) would be a tough task for the insurance companies in the current context of economic slowdown.

It also cautioned “some” companies which had undertaken massive expansion in the last two years about the burden of growing expenditure due to decrease in the new business.

Transparency

“IRDA's target is to ensure complete transparency in the management of finances and accounts of insurers (especially in life segment). We are examining the expenditure management by companies,” he added.