What Are The Disclosures Required To Be Filed By Insurance Companies?

by Enterslice ITES Pvt. Ltd. Start and Manage Business

An Insurance company being a service providing an institution to the general public, it has many mandatory norms and regulation to follow. The purpose and objective for such norms are to safeguard the public interest and bring transparency in its business.

As per the provisions of Section 88 of the Insurance Order, 2006 the registered insurance companies (now referred to as “insurers”) to disclose to the public relevant, comprehensive and sufficient information on yearly basis, in order to show a clear view of its business activities, performance and financial position of the company.

As per this regulation, an insurer has to disclose to the public quantitative and qualitative information related to its profile, governance and controls, financial position, technical performance and the risks to which it is exposed to. This will help to enhance market discipline and understanding of the risks to which an insurer is subject to and the process of risk management adopted by the company.

What are the Requirements on the Public Disclosure?

Insurers are required to prepare audited financial statements on an annual basis as per the provision of the Insurance Order, 2006 along with other required disclosures under this regulation. This must be made available to the public on its official website or on any other electronic media as approved by the Regulator.

It must disclose this within 30 days from 31st March, (from the adoption of final accounts) as being the deadline for submission of final accounts to the regulator.

What are the Principles of the Public Disclosures?

The disclosures shall show the information to the public which is useful, timely, comprehensive, meaningful and reliable for decision making by the person reading the information.

Such information shall be comparable to that furnished by other insurers working in the same market to enable the reader to understand relevant trends.

An insurer must consider the nature, scale, and complexity of the information when considering the disclosure of information to the public.

An insurer shall disclose various information related to its company profile, the nature of its business, a broad description of its key products, its objectives and its general strategies to achieve its stipulated objectives.

It must disclose the main features of its corporate governance framework, management controls and information on the execution of the framework and controls.

Quantitative and qualitative information on all its reasonable, foreseeable and relevant material insurance risk exposures, and further the management of such risk exposures, which includes:

Its objectives, policies, models, techniques for the management of insurance risk exposures and its control of the underwriting process
The details about the nature, scale, and complexity of risks arising from insurance contracts;
The use of reinsurance other forms of risk transfer adopted by the insurer;
The relationship between capital adequacy and risk;
A description of risk concentrations; and the use of derivative instruments to manage material risks.
Quantitative and qualitative information about the calculation of actuarial liabilities of the insurer;
Quantitative and qualitative information related to its enterprise-wide risk management framework which includes its asset-liability management (ALM);
Quantitative and qualitative information about capital adequacy to assess the insurer’s objectives, policies, and processes for managing capital and its capital adequacy.
The insurer shall disclose its financial stability requirements as required by the regulator for the company.
Quantitative and qualitative information about its financial instruments held and other investments and its investment objectives;

When any information is considered to be either proprietary or confidential in nature then it may not be disclosed except general information about the subject matter or the requirement. For more information regarding public disclosure visit us at Enterslice.