DFS may take final call on tenure of IRDAI whole-time members

The department of financial services (DFS) under the Ministry of Finance may take a final call on the tenure of the whole-time members at Insurance Regulatory and Development Authority of India (IRDAI).

While the age of retirement is 62 years at IRDAI, that in Securities and Exchange Board of India (Sebi) is 65 years. The matter was taken up in the IRDAI board meeting held two months ago. The insurance regulator has agreed to refer the matter to DFS.

“This matter came up in the board meeting. Since the markets regulator has a higher age of retirement, there was a view among some members that the tenures at IRDAI should be brought on par with that,” said a senior IRDAI official.

According to the IRDA Act 1999, whole-time members have a tenure of 5 years provided that they should not continue after they have attained the age of 62 years. As per the SEBI Act 1992, whole time members have a tenure of 5 years or till they attained the age of 65 years whichever was earlier.

In order to bringing uniformity/parity in respective provisions of IRDA Act 1999 and SEBI Act 1992, IRDAI has decided to refer the matter be referred to DFS, Ministry of Finance along with any other substantive amendments required in any other provisions of the IRDA Act.

The Financial Sector Legislative Reforms Commission (FSLRC) had recommended that Sebi, IRDAI, Pension Fund Regulatory and Development Authority of India (PFRDA) and Forward Markets Commission (FMC). FMC has already been merged with Sebi.

Sources said that while having a unified financial regulator was some time away, the idea was to have a uniform mechanism of appointments and tenure among the regulators. This could just be the first step and many more gaps could be bridged in terms of rules to bring both regulators on an equal footing.

IRDAI has had situations in the past where many positions of whole time members have been vacant after the former official retired from the post. If 65 years is made the age of retirement, they will be allowed to continue for a few more years.