IRDAI has put a cap of Rs 1.5 crore on the annual salary of Chief Executive, which could be paid from the policyholders’ fund.
“In case the annual remuneration of the MD/ CEO/ Whole Time Directors exceeds Rs 1.50 crore (excluding perquisites plus bonuses etc. by whatsoever names) such excess shall be borne by shareholders’ account,” IRDAI said in the guidelines on Remuneration of Non-executive Directors and Managing Director.
No revision in remuneration shall be permitted till the expiry of one year from the date of earlier approval, it said.
It noted that the need to bring in professionalism to the boards of insurers cannot be overemphasised.
“In order to enable Insurers to attract and retain professional directors it is essential that such directors are appropriately compensated. Accordingly, the Authority has finalised the guidelines on remuneration for non-executive Directors, as under for implementation by the private sector insurers,” it said.