Refraining from directly appointing statutory auditors, insurance regulator Irda has retained the practice of prescribing eligibility criteria for appointment of auditors by insurers.
Irda would not have a panel of auditors and would not appoint auditors, as demanded by accounting regulator ICAI.
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, 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
These stipulations also said the firm should have a minimum of five partners of whom at least two should have been in practice for a minimum period of 10 years. Also, at least two other partnership have in continuous practice for a minimum period of five years.
Alternatively, firm could have at least seven CAs and at least two partners have to be in continuous practice as partners for a minimum period of 10 years. Also at least three CAs have to be in continuous practice for a minimum period of five years.