IRDAI proposes out-sourcing norms for insurance firms

IRDAI has proposed outsourcing norms for insurance companies under which they can take services of individuals for activities like medical examination, claim investigation, and recovery. As per the exposure draft, every insurer should put in place a comprehensive board approved outsourcing policy.

In considering or renewing an outsourcing arrangement, an insurer should subject the agency to appropriate due diligence, IRDAI said in the proposed IRDAI (Outsourcing of Activities by Indian Insurers) Regulations, 2016.

“The insurer shall satisfy itself that the outsourcing agency’s security policies, procedures and controls will enable the insurer to protect confidentiality and security of policyholder information,” the draft said. It also stresses that “core activities” like underwriting, product design, actuarial functions, reinsurance, policyholder grievances redressal, and compliance with AML, KYC Norms, should not be outsourced.