IRDAI asks insurers to disclose voting policy

( Times News Network ) Mumbai : Insurance companies, including LIC, will now have to publicly disclose their voting policy on resolutions in companies, where they hold stakes. The insurance regulator has asked companies to exercise their "independent judgement" and not to automatically support the proposals made by the board of the investee company. The directives notified on Wednesday are part of the Insurance Regulatory and Development Authority of India's guidelines on 'stewardship code' for insurance companies. The code is aimed at providing insurance companies a framework for using their power as institutional investors. The new directive is significant considering that the LIC played a significant role in recent boardroom battle involving the Tatas and former group chairman Cyrus Mistry. Market regulator Sebi has also been nudging IRDAI to get insurance companies to publicly disclose their voting resolutions, with the objective of improving corporate governance. One of the key guidelines of the code requires all insurance companies to publicly disclose their policy for maintaining conflict of interest in a way that policyholder interest is always given priority. " The company's policy should identify scenarios of likely conflict of interest as envisaged by the board, and should also address how matters handled when the interest of clients or beneficiaries diverge from each other," IRDAI said. While insurance companies are not expected to interfere in management, they are required to state publicly and in advance, at what stage they will intervene in running of a company -- to protect policyholder interest. ( The Times of India, Madurai, Thursday, March 23, 2017 ) Courtesy : MPS