Abstract

The initiative of Liberalization, Privatisation and Globalization (“LPG”) policy by the then government of P.V. Narasimha Rao in 1991 has widened the scope of corporate governance mechanism in India. In a short span of time, after the introduction of the LPG policy, the Indian economy faced several corporate scams, (the Satyam Computer Scam, Sahara Scam, Harshad Mehta Scam, ILFS Scam etc) and to deal with such issues, the government has taken pivotal steps with help of Statutory Framework of Corporate Governance mechanism. The paper aims to deal with the legislative steps taken by the government to improvision the corporate governance system in India’s Insurance Companies. The paper analysis the execution effect of the legislative framework introduced by the government for a strong corporate governance mechanism: i. Insurance Regulatory and Development Authority of India Act, 1999. ii. Insurance Regulatory and Development Authority of India (“IRDAI”). iii. Comprehensive Guideline on Corporate Governance issued in 2016 by IRDAI. iv. Brief Discussion on the Insurance Act, 1938. The paper aims to analyse the execution of the corporate governance statutory framework introduced for insurance companies, how they helped in enhancing corporate governance, to what extent able to deal with the problems of scams and what corporate compliance is required under these statutory frameworks. The paper first outline the meaning and the scope of corporate governance, and what it means. The paper further deals with the imposition of penalties, liabilities arising, or any punishment if prescribed under the Act in the event of non-compliance with the statutory requirements. The paper covers all or every incidental and allied topic to justify the title of the paper i.e., “Corporate Governance and Insurance Companies”.

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