Rashmi Saluja, non-executive chairperson cum director, Care Health Insurance
The issuance of stock options of Care Health Insurance to Rashmi Saluja in her capacity as the chairperson of Raligare Enterprises Ltd(REL), the holding company Care Health Insurance, is in violation of the IRDAI Act 1999, said the IRDAI
Hyderabad: In significant development, finding flagrant violations of its norms in allotting stock options to Rashmi Saluja, non-executive chairperson cum director, Care Health Insurance(CHIL), insurance regulator IRDAI has slapped a fine of Rs 1 crore on the health insurer and has asked it to buy back all her exercised stock options at the same price of Rs 45.32 per share earlier granted to Saluja.
The regulator on Tuesday has instructed CHIL to cancel all the rest of the stock options which have not been exercised by Saluja yet within 30 days from today.
CHIL had informed IRDAI that it had granted 2,27,11, 327 ESOPs of which 75,69,685 have been exercised by Saluja, .
The issuance of stock options of CHIL to Saluja in her capacity as the chairperson of Raligare Enterprises Ltd(REL ), the holding company CHIL, is in violation of the IRDAI Act 1999, said the IRDAI.
The IRDA has said on 10th June 2022 had directed CHIL to refrain from issuance of stock options of the insurer to Saluja but the company hadn’t complied with that.
However, CHIL, in its response to the IRDAI’s show cause notice, had maintained that Saluja has been granted ESOPs in her capacity as executive chairperson REL and not as non-executive chairperson of CHIL, an argument flatly rejected by the IRDAI.
The payment of remuneration(other than sitting fees) to Saluja who is a non-executive director(NED) and chairperson of CHIL and also common director with an insurance intermediary, in any event, required the prior approval of the IRDAI, said the regulator.
“The fact that Saluja held the position of the executive chairperson of the REL doesn’t dilute the requirement of complying with directions of the IRDAI and provisions of the regulations,’’ asserted the IRDAI.
The requirement to procure prior approval of the IRDAI for providing remuneration to NEDs of insurers, who are common director in insurance intermediaries (other than in relation to sitting fees)can’t be avoided on the grounds of such common director receiving stock options of the insurer, in his/her capacity as a director/employer of any other company, said the IRDAI in its final order.