Now, insurers must link pay of senior executives with performance

MUMBAI: The insurance regulator has directed insurers to realign how senior executives are evaluated and paid, linking performance more closely to customer outcomes, transparency, and governance, under a revised framework issued through a circular dated May 25.The Insurance Regulatory and Development Authority of India (Irdai) said insurers must align the performance parameters of key management persons with measurable customer outcomes, while shifting away from a narrow focus on financial and operational metrics. According to the regulator, companies are now required to disclose standardised performance data covering financial soundness, product performance, claims handling, grievance redressal, and customer service quality.The move is aimed at strengthening customer trust, improving transparency, and reinforcing accountability across the sector. The regulator said it also seeks to reduce information asymmetry and enable policyholders to make informed decisions. "Irdai is moving towards removing information asymmetry in the sector and empowering policyholders to make informed decisions," it said.Explaining the rationale, the regulator said evolving customer expectations and economic needs require a shift in focus. "Evolving expectations of customers and needs of the economy require us to place greater emphasis on measurable customer outcomes, transparency in decision-making, responsiveness, and sustainable value creation," said Ajay Seth, chairman, Irdai.