November 16th, 2023 | Sterling

What You Should Know About IRDAI’s New Guidelines for The Insurance Industry

The Insurance Regulatory and Development Authority of India (IRDAI) issued new cyber security guidelines in April 2023 for the insurance industry to strengthen their defences and governance mechanism to deal with emerging cyber- threats.

One of the requirements of the updated cyber security guidelines is for Human Resources (HR) to conduct / appoint an external agency to conduct background checks for new candidates and new joiners, to ensure they are fit and proper candidates with verified credentials and reference checks.

The initial guidelines were issued back in 2017 and were applicable to all insurers. In 2022, it was further extended to include insurance intermediaries.

Policy 2.4 section of the guideline defines and outlines “Human Resource Security”:

A) Human resource (HR) security is a part of personnel management, and applies to pre-employment, duration of employment, and termination of employment.

B) Background checks shall be performed on all personnel (including temporary and contract personnel) performing sensitive or critical job roles before they are selected for the position or transferred to the position (As per 3.1 – Prior To Employment).

C) Personnel who are third-party service providers shall have undergone a background check by their respective organisations, and the assurance of the same shall be provided to the organisation. Information provided by the personnel at the time of recruiting shall be subjected to verification procedures.

Please click on the link for more details.

Next Steps

Managing Risk and Due Diligence:

  • Such guidelines emphasise that the background verification process is an essential part of governance framework for organisations to proactively manage risk.
  • Employers who are not conducting background checks (or who have a rudimentary process), need to pay attention to carry out steps to tighten their onboarding process.
  • To consider background verification as a risk management practice and not merely as a task to be completed.
  • Revisit existing background check processes from time to time, with an eye to seeing if they’re outdated. Also, companies should work towards leveraging new resources, tools, and technology to screen applicants thoroughly prior to employment and on an ongoing basis during their employment tenure.

How Can Sterling Help?

Sterling is a leading provider of background checks in India, with operations around the world, deep regional expertise, local service proficiency, and reliable global fulfilment capabilities.

Chat with our team today on our screening solutions, allowing your organisation to make an informed hiring decision to ensure that your governance framework is resilient against cyber threats


Document Detail – IRDAI

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