Refraining from directly appointing statutory auditors, insurance regulator IRDA has retained the practice of prescribing eligibility criteria for appointment of auditors by insurers.
Insurance Research and Development Authority would not have a panel of auditors and would not appoint auditors, as demanded by accounting regulator Institute of Chartered Accountants of India.
The regulator has not been maintaining panel of auditors since 2005 and instead prescribing the requirements for their appointment by insurers.
In the backdrop of inflated balance sheet of Satyam Computer Services, chartered accountant body ICAI had pitched for the appointment of statutory auditors for insurance firms by IRDA.
In a circular, IRDA asked insurers to ensure that statutory auditors appointed by them should meet the criteria like existence of such a firm for at least 15 years.
". . .all insurers while appointing/reappointing the statutory auditors must ensure compliance with stipulations. . .," the circular stated.
Stipulations provide that auditor appointed by an insurance company will have to be from a firm which has been in existence for a period of 15 years.