MCA Compliance for Insurance Companies |

MCA Compliance for Insurance Companies

Insurance companies in India are registered as public companies under the Companies Act 2013. As public companies, they must adhere to the rules set by the Ministry of Corporate Affairs (MCA) and the Registrar of Companies (ROC). Compliance with MCA regulations is vital for the successful operation of an insurance company.

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Our services include comprehensive advice on MCA compliance related to your insurance business. We also provide guidance on the procedural aspects of MCA compliance. Additionally, we offer regular follow-up with IRDAI and MCA to ensure ongoing adherence to compliance requirements.

MCA Compliance Checklist for Insurance Companies

Statements Related to Finance
Insurance companies must file the following financial statements in the XBRL format: Balance Sheet, Directors Report, Auditors Report, and Consolidated Financial Statement. This compliance must be completed within 30 days after the Annual General Meeting.
Annual General Meeting
Insurance companies are required to hold an Annual General Meeting within 30 days of incorporation.
Annual Return
Insurance companies must file an annual return within 60 days after the Annual General Meeting.
Income Tax Return
Insurance companies must file their income tax returns before the 30th of September every financial year.
Directors Reports
Insurance companies must hold four meetings within 30 days of incorporation, with a maximum gap of 120 days between meetings.
Audit and Secretarial Report
If an insurance company's paid-up capital exceeds Rs 50 Crore or its annual turnover exceeds Rs. 250 crore, it must publish secretarial and audit reports. This compliance must be carried out by the Company Secretary.
SEBI Compliance
Insurance companies must comply with the listing regulations of SEBI(LODR) 2015.
Corporate Social Responsibility Compliance
Insurance companies with a net worth of 500 Crore, turnover of 1000 Crore, or a net profit of 5 Crore must have a Corporate Social Responsibility Committee (CSR Committee). The committee must conduct four meetings every year.
CEO and CFO Appointment
Insurance companies must appoint their CEO and CFO within 30 days after the annual general meeting.
Declaration of Dividend
Dividends must be declared after the first annual general meeting, which is held nine months after the company is formed.
Special Resolution
Special resolutions, which require 75% majority votes, must be passed at the annual general meeting. This must be done within 30 days of passing the resolution.
Disclosure of Financial Interest
Directors must disclose any financial interest they have in contracts or special transactions with the company after their first appointment at the meeting.

Appointment of Cost Accountant
The company must appoint a cost accountant who is different from the chartered accountant. This appointment must be made within 30 days after the meeting or 180 days of the financial year, whichever is earlier.

Non-Compliance with Company's Act 2013 and Eligibility Criteria for MCA Compliance
Insurance companies that fail to comply with the provisions set forth under the Company's Act 2013 may face penalties.

Eligibility Criteria for MCA Compliance

Insurance companies registered as public companies are eligible to comply with the above norms.
Required Documentation
The following documents are required for MCA compliance:
Statements related to Finance – Form AOC-4.
Annual General Meeting – Form MGT 15.
Annual Return by the Insurance Company – MGT-7.
Income Tax Return – Form ITR-6.
Director's Report – Form MGT-14.
Audit and Secretarial Report – Form MR-3.
Compliance with Listing Rules under SEBI – Business Responsibility Report as prescribed by SEBI.
Corporate Social Responsibility – Board Report on compliance or non-compliance.
Selection of CEO and CFO – Form DIR-12 and Form MGT-12.
Director's Disclosure – Form MBP 1.
Appointment of Cost Accountant/Cost Auditor – Form CRA-2.
Declaration before the commencement of business or exercising borrowing powers – Form No INC-21.

FAQ

What is XBRL and is it required for insurance companies?

XBRL stands for Extensible Business Reporting Language, which is an electronic communication system used to share business data. Previously, XBRL reporting was only required for listed entities and other companies, but now it is mandatory for insurance companies as well.

What are the penalties for non-compliance with the CSR report?

Under the Companies Act 2013, companies that disclose profits are required to file a CSR Report by the CSR Committee. The report should specify the activities conducted and the amount of finance spent on CSR. Failure to comply may result in penalties.

Is a Corporate Governance Committee mandatory for insurance companies?

Yes, according to the Companies Act 2013 and MCA compliance, insurance companies are required to have a Corporate Governance Committee.

Who is the regulatory authority for insurance compliance?

The primary regulatory authority for insurance compliance is the Insurance Regulatory and Development Authority of India (IRDAI). Additionally, the Registrar of Companies and the Ministry of Corporate Affairs oversee corporate compliance for insurance companies.

Are insurance companies required to follow all compliances?

Yes, insurance companies, being registered as public companies under the Companies Act 2013, must adhere to all compliances applicable to public companies.

Who would be liable in case of non-compliance with the provisions?

In case of non-compliance, the insurance company itself, along with key management personnel such as directors, shareholders, CEO, and CFO, would be held liable.

What are the necessary documents for MCA compliance in insurance companies?

Insurance companies need to submit several documents for MCA compliance, including Finance Statements (Form AOC-4), Annual General Meeting (Form MGT 15), Annual Return (MGT-7), Income Tax Return (Form ITR-6), Director’s Report (Form MGT-14), Audit and Secretarial Report (Form MR-3), and more.

Is it mandatory to appoint a Cost Accountant or Cost Auditor for insurance companies?

Yes, insurance companies are required to appoint a Cost Accountant or Cost Auditor in accordance with the Companies Act 2013 (Form CRA-2).

Can insurance companies commence business or borrow funds without declaration?

Insurance companies must make a declaration (Form No INC-21) before commencing business or exercising borrowing powers.

What are the eligibility criteria for MCA compliance in insurance companies?

Insurance companies registered as public companies are eligible for MCA compliance. They need to ensure adherence to the specified norms and regulations.
These answers provide an overview of MCA compliance for insurance companies, but it’s essential to consult legal and regulatory experts for specific guidance.

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