Will the Union Govt Appoint an Independent CVO for IRDAI To Boost Vigilance Mechanism?
Moneylife Digital Team 17 December 2021
With finance minister Nirmala Sitharaman categorically stating that the Insurance Regulatory Authority of India (IRDAI) is not exempted from obtaining approval from the Central Vigilance Commissioner (CVC) while appointing its chief vigilance officer (CVO), the question is: Will the Union government now appoint a CVO for the insurance regulator? Especially over the past several years, IRDAI has neither obtained any permission from the CVC nor framed a separate vigilance policy for dealing with vigilance complaints. 
This also means that, since 1999, IRDAI has been evading the approval process and, thus, its vigilance and regulatory mechanisms have been very weak and ineffective. It is in stark contrast with other regulators like Reserve Bank of India (RBI) and Securities & Exchange Board of India (SEBI) that follow CVC guidelines and have separate policies for vigilance, whistle-blowers and transfers in place.
In a written reply, Ms Sitharaman, the minister, says, "With regard to vigilance policy, IRDAI has informed that it follows the vigilance manual issued by the Central Vigilance Commission (CVC) while dealing with vigilance complaints and, given this, it has not framed a separate vigilance policy."
Curiously, while replying to similar questions raised under Right to Information (RTI), IRDAI  has categorically said the approval of CVC for the appointment of its CVO is not required. 
In fact, in one case, the CVC clearly stated that its approval is required for the appointment of CVO, but it had not cleared the appointment of Lalit Kumar Chandel as CVO of IRDAI. "For the appointment of CVO in IRDAI, a proposal was received in August 2013, which is in abeyance due to decision pending in some jurisdictional issues," Subrata Das, under-secretary and nodal central public information officer (CPIO) of the CVC, had said in an RTI reply on 12 March 2019. 
Mr Chandel was deputed to IRDAI from the ministry of finance. On 15 July 2013, he was appointed as financial adviser in IRDAI and was relieved from his duty as executive director of the insurance regulator on 14 July 2016.
Soon after joining IRDAI, he was made the CVO, although the exact date is not available on records, the RTI reply shows. Mr Chandel was the CVO till 11 January 2015. 
However, IRDAI did not have any office file notings on the transfer order of Mr Chandel, revealing a reply received under the RTI Act. Responding to a query on 15 March 2019, Deepak Gaikwad, deputy general manager for the human resources department (HR) and central public information commissioner (CPIO) of IRDAI, said, "Lalit Kumar Chandel and Shriram Taranikanti were officers on deputation and appointed as CVOs in IRDAI. As informed Mr Chandel was transferred on 12 January 2015. Office notings in this regard are not available."
As per government norms, the post of CVO is a sensitive post and the official must be transferred every three years. 
The issues of sensitive posts in IRDAI started in September 2013 with the CVC issuing a circular (No03/09/13 dated 11 September 2013) that contained instructions for effecting rotational transfers of officials posted on sensitive posts. In the circular, the CVC had asked to identify sensitive posts and staff working in these posts and to ensure that they are strictly rotated after every two-three years to avoid developing vested interests. 
The CVO of IRDAI prepared a note on 16 December 2013, in response to the CVC circular stating that "the nature of our organisation is such that most of the functions are technical in nature and require specialisation, which comes only after continuous exposure to the relevant fields." This is revealed in an office note dated 2 June 2014 prepared by the human resources (HR) department in IRDAI.
Meanwhile, the CVC kept sending reminders to IRDAI and the vigilance department brought it to the notice of the HR department. There were two specific notes dated 16 December 2013 and 20 May 2015, which the vigilance department put forth to the HR department. These notes and the CVC reminder were expected to reach the IRDAI chairman's desk for a decision.
However, instead of a decision, the CVO at that time mentions in an office note that "Discussed with the Chairman. We may have discussions with departments for identifying sensitive positions/ posts." This is revealed in reply to an application filed under RTI. 
After this note, nothing moved in IRDAI and it appeared that this issue would also meet with same fate as the office notes dated 16 December 2013 and 20 May 2015. There was complete silence in IRDAI on this issue and everybody almost forgot about it, till Javed Ali Khan, a member of Parliament (MP) raised questions about this.
In a written reply on 3 December 2019, the then minister of state for finance stated, "IRDAI, in compliance of CVC guidelines (No.18/Misc/02-392171 dated 23/08/2018 vide order dated 26/11/2019) has identified sensitive posts in the departments, which include positions handling registration and renewals of insurance intermediaries viz. corporate agents, insurance brokers, insurance marketing firms, surveyors and loss assessors and third party administrators, and those handling insurance product approvals." (Read: Insurance Regulator Clears 7-year Old Issue In 7 Days after Parliamentary Question!)
FM Sitharaman told the Rajya Sabha that IRDAI does not have a separate whistle-blower policy as it follows the government resolution (GR) published by the department of personnel and training (DoPT) in the matter of probing complaints of corruption or misuse of office while keeping the identity of the complainant secret.
On the question of compulsory leave policy of the insurance regulator, Ms Sitharaman says, "IRDAI has informed that it does not have such a policy, as the apparent rationale for such a policy is to serve as a check on adherence to procedures, guidance, instructions by personnel dealing with operations in the financial markets, and a sizeable amount of cash  whereas IRDAI does not engage in such dealings."
IRDAI has been in existence for more than 21 years, and it is high time its policy is framed to strengthen its vigilance mechanism to stop and prevent corruption. 
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