In the future, independent directors will play a real role in the management of insurance companies.
While enjoying a series of "privileges", if the independent director causes losses to the company, shareholders or the insured due to dereliction of duty, the independent director will bear the corresponding liability for compensation according to law. A few days ago, the China Insurance Regulatory Commission issued the Interim Measures for the Administration of Independent Directors of Insurance Companies, which will take effect as of the date of promulgation.
Regarding the qualifications of independent directors, the Interim Measures are particularly clear. An independent director may not serve in other insurance companies that operate similar main businesses, and may not serve as an independent director in more than four enterprises at the same time.
Regarding the nomination, election and recall of independent directors, the Interim Measures stipulates that the board of directors of an insurance company shall have a certain proportion of independent directors. Before June 30, 2007, there should be at least two independent directors among the board members of each company. An insurance company with total assets exceeding 5 billion yuan at the end of 2006 shall make independent directors account for more than one third of the board members before June 30, 2007. Other companies should make independent directors account for more than one third of the board members within one year after the total assets exceed 5 billion yuan.
The Interim Measures stipulates that independent directors shall be elected by the shareholders' meeting. Where a shareholder nominates an independent director, the nominating shareholder and other related shareholders shall not participate in the voting on the nominated independent director. The term of office of independent directors is the same as that of other directors of the company, and they may be re-elected at the expiration of their term of office, but the term of office shall not exceed six years. An independent director shall not be dismissed without reason before the expiration of his term of office. In case of loss of independence and I have not resigned, or other circumstances that make it unsuitable to continue as an independent director, the company shall convene a general meeting of shareholders to remove him from his post.
The Interim Measures also clarify that the company shall report the reasons for dismissal, the excuses and statements of independent directors and other relevant information to the China Insurance Regulatory Commission within five working days after the dismissal resolution is made. When China CIRC deems it necessary, it may require independent directors to state their opinions or require insurance companies to make explanations.
Regarding the duties, obligations and guarantees of independent directors, the Interim Measures stipulates that independent directors should not only have the duties of directors as stipulated in the Company Law and other relevant laws and regulations, but also carefully examine the following matters: major related transactions; Nomination, appointment and removal of directors of the Head Office and appointment and removal of senior management personnel; Remuneration of directors and senior managers of the Head Office; Profit distribution plan; Major transactions such as investment, lease, asset sale and guarantee. Not included in the business plan; Other matters that may have a significant impact on the rights and interests of insurance companies, insured persons and minority shareholders.
The Interim Measures also clarify that if more than half and not less than two independent directors think it necessary, they can investigate the company's related affairs or hire independent intermediaries to provide opinions. The investigation fee shall be borne by the insurance company. If the resolution of the board of directors may harm the interests of the insurance company, the insured or minority shareholders, and the board of directors does not accept the opinions of independent directors, more than half and not less than two independent directors may request the board of directors to convene an extraordinary general meeting of shareholders. If the board of directors does not agree to convene an extraordinary shareholders' meeting or the shareholders' meeting does not accept the opinions of independent directors, the independent directors shall report to the China Insurance Regulatory Commission.
Regarding the supervision and punishment of independent directors, the Interim Measures are clear. If an independent director is disqualified or ordered to be replaced, the China Insurance Regulatory Commission will make an announcement in the designated media. If losses are caused to the company, shareholders or the insured due to dereliction of duty, the independent directors shall bear corresponding liability for compensation according to law.
Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.