30 July 2024
The insurance sector regulator, IRDAI, has directed Care Health Insurance Ltd (CHIL) to buy back ESOPs granted to its non-executive chairperson, Rashmi Saluja, and has imposed a fine of Rs 1 crore on the insurer for violating its norms. According to the 2016 Remuneration Guidelines, insurers must ensure that non-executive directors are not provided any remuneration other than profit-related commission and sitting fees, as stated by IRDAI in its order.
Regarding CHIL's claim that several employees of Religare Enterprise were granted ESOPs of CHIL since the inception of the ESOP scheme, the authority found no merit in the claim, given that CHIL failed to provide any details about whether any of those employees were non-executive directors of CHIL at the time the ESOPs were granted.
CHIL is a subsidiary of Religare Enterprises, with Saluja serving as the executive chairperson of Religare Enterprises and non-executive chairperson of CHIL.
The issuance of ESOPs to Saluja in her capacity as the executive chairperson of Religare Enterprises violates the law, as noted in the order dated July 23. This action is non-compliant with the conditions or restrictions imposed by IRDAI while granting permission to be a common director.
The law prohibits payment to non-executive directors in forms other than 'profit-related commission' and 'sitting fees'. IRDAI has directed CHIL to facilitate a buyback of 75,69,685 shares allotted to Rashmi Saluja at the same price per share as the exercise price (Rs 45.32 per share), in compliance with applicable laws, including the provisions of the Companies Act, 2013.
The insurance sector regulator, IRDAI, has directed Care Health Insurance Ltd (CHIL) to buy back ESOPs granted to its non-executive chairperson, Rashmi Saluja, and has imposed a fine of Rs 1 crore on the insurer for violating its norms. According to the 2016 Remuneration Guidelines, insurers must ensure that non-executive directors are not provided any remuneration other than profit-related commission and sitting fees, as stated by IRDAI in its order.
Regarding CHIL's claim that several employees of Religare Enterprise were granted ESOPs of CHIL since the inception of the ESOP scheme, the authority found no merit in the claim, given that CHIL failed to provide any details about whether any of those employees were non-executive directors of CHIL at the time the ESOPs were granted.
CHIL is a subsidiary of Religare Enterprises, with Saluja serving as the executive chairperson of Religare Enterprises and non-executive chairperson of CHIL.
The issuance of ESOPs to Saluja in her capacity as the executive chairperson of Religare Enterprises violates the law, as noted in the order dated July 23. This action is non-compliant with the conditions or restrictions imposed by IRDAI while granting permission to be a common director.
The law prohibits payment to non-executive directors in forms other than 'profit-related commission' and 'sitting fees'. IRDAI has directed CHIL to facilitate a buyback of 75,69,685 shares allotted to Rashmi Saluja at the same price per share as the exercise price (Rs 45.32 per share), in compliance with applicable laws, including the provisions of the Companies Act, 2013.
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