Cooling Period In Insurance Implemented
March 25, 2021 | Investopaper
The chairman and chief executive officer (CEO) of an insurance company have to wait four more years if they want to assume responsibility for more than two consecutive terms, that is, for more than eight years. A meeting of the Finance Committee under the House of Representatives on Wednesday amended the bill to amend and consolidate the insurance law proposed by the government. This made it impossible for the chairman and chief executive officer of an insurance company to hold office for more than eight consecutive years.
However, a director who has completed two consecutive terms can be re-appointed or reinstated after four years. The term of office of the Chairman and Chief Executive Officer of an insurance company shall be four years. Their tenure is being directed in accordance with the Banking and Financial Institutions Act (BAFIA).
Similarly, provision has been made that an independent director cannot be the chairman and can be appointed only for one term. Earlier, the proposed bill had made provision for an independent director to be the chairperson.
Likewise, to be appointed as the Chief Executive Director (CEO) of an insurance company, one must have at least a master’s degree in subjects such as insurance, monetary, banking, finance, commerce, management, public administration, statistics, mathematics, economics or commercial law. Earlier, one could be appointed as a CEO even if he has a master’s degree in law.
Similarly, the bill has been amended to allow only person with at least 5 years of experience in the insurance sector, 8 years in banks and financial institutions and at least 7 years of experience in both sectors to be appointed as Chief Executive Officer. Earlier, one should have at least 12 years of experience to become a CEO in insurance company.
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