IRDA tells insurance cos to undergo investment audit

Insurance companies will now have to undertake an investment specific concurrent audit. That's the IRDA's mandate to them. CNBC-TV18's Avni Raja reports this step was undertaken to ensure uniformity in the audit process. CNBC-TV18 also learns that one company/ firm cannot be concurrent auditors of more than two companies.

Here is a verbatim transcript of Avni Raja's comments on CNBC-TV18. Also watch the accompanying video.

Currently they is no uniformity in the audit process for insurance companies. Some companies have both external and internal auditors while other companies do not have any internal auditor. So this move will really bring some sort of uniformity in the process. Statutory Audit which is currently being used looks only into the financial transactions of companies and a concurrent audit is much more exhaustive and it will also ensure that companies comply with Insurance Regulatory and Development Authority (IRDA) investment guidelines and will look into the risk management issues.

R Kannan, Member, IRDA said, "The positioning of concurrent auditor will ensure the availability of suitable process in the company and this will enable the company to ensure the availability of all risk management principles. Hence from risk management view point, this is an important step."

We also learn that one company/one firm cannot be concurrent auditors of more than two companies.

Also Read: IRDA prohibits insurers from investing in IDRs