The regulator has sought industry feedback on proposals to tighten accountability standards for senior management, including sharper monitoring of claims servicing, expense management and customer grievance-related metrics as part of MD and CEOs performance evaluations, said multiple industry executives.
“Earlier the framework said KPIs around claims, customer servicing and expenses should be part of management evaluation. Now discussions are around introducing more specific measurable parameters,” said a person familiar with the matter.
The proposed metrics under discussion could include targets linked to claims settlement turnaround time, reduction in expense of management (EOM) ratios, complaint resolution benchmarks and loss ratios.
The discussions come at a time when the regulator has increased scrutiny of distribution costs and standards, particularly in segments such as where claim-related complaints and hospital disputes have risen.
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Industry executives said the regulator has increasingly been suggesting that governance should move beyond financial growth metrics to include and operational efficiency.
The insurance regulator had earlier tightened norms around expense of management and oversight through revised governance regulations. Insurers are already required to align remuneration structures with long-term policyholder interests.
“The guidelines already have multiple control mechanisms in terms of compensation and outcomes of customer experience. Regulations have moved away from rule-based strict micromanagement to more principle-based frameworks, and we hope it does not go back to that kind of a regime,” a chief executive officer of a large general insurance company said.
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