In Conversation with Narendra Gangan | Executive VP, CS & Head Legal and Compliance | HDFC Life Insurance

Please allow us a peek into your illustrious journey in law. Where did this journey begin, who were your mentors, and what keeps you busy when you’re not working (hobbies)? 

My career span exceeds 26 years. I started my career in 1994 with Godrej Agrovet as a management trainee. Thereafter, worked with 20th Century Finance Corporation (TCFC), Baskin Robbins, IL&FS.  

In 2005, I moved to DSP Merrill Lynch and as part of the core team launched several lines of businesses in India. In a short span of 6 months, I was given an opportunity to be a part of the Operating Committee for Asia Pacific Region.  

In 2008, I joined IDFC Limited and was part of various group initiatives including a banking license, setting up subsidiaries in the US and Singapore. As a Senior Director, Legal & Compliance my role was to work with multiple regulators like RBI, SEBI, Stock Exchanges, Monetary Authority of Singapore, SEC & FINRA (U.S). I was also inducted as a Partner with IDFC.  

My current journey with HDFC Life as EVP, Company Secretary & Head - Compliance & Legal began in 2017 and as part of the core team on the IPO project, we listed HDFC Life in November 2017. HDFC Life, a Nifty 50 Company, has AUM of over INR. 1.65 lac crores as of December 2020. At HDFC Life, I also cover the subsidiaries, HDFC International, which is a Dubai based re-insurance entity and HDFC Pension Company which is the largest private pension company in India.  Across HDFC Life and its subsidiaries, I oversee all legal advisory to business, contractual documentation, advising on strategic projects, policy documentation, litigation, implementing listing compliances with Stock Exchanges, policy framework and Corporate governance responsibilities. Majority of my responsibility includes policy advocacy across multiple regulators, 

 In my career journey, I have worked with wonderful professionals and industry stalwarts and some of my mentors have been Mr Arun Saha at IL&FS, Mr Vikram Limaye at IDFC Ltd and Ms. Vibha Padalkar at HDFC Life. 

In my free time besides reading, I thoroughly enjoy travelling, sports and music. 

What does a day in your shoes look like in your current role? 

There is constant action in my daily routine, and never a dull moment as I work for one of the most valuable life insurance companies in India where there is constant innovation, ideation, drive to provide excellent service to our stakeholders. My team looks after Legal, Compliance, Secretarial areas collaborating together to deliver as a cohesive department. Given the retail business,  approx 6.95 lakh shareholders and 20,000 employees, there is enough challenging work to cater every day. 

While the business as usual consumes substantial time, the innovation and experimentation require a lot of attention on creating an enabling framework towards strategic and futuristic plans of the company. 

What are your thoughts on the evolving life insurance distribution model? 

India remains vastly under-insured both in terms of penetration and density. There is a huge opportunity to penetrate the under-serviced segments, with the evolution of the life insurance distribution model.  

India's insurable population is growing and the elderly population is expected to double by 2035 (as compared to 2015). The emergence of nuclear families and advancement in healthcare facilities has lead to an increase in life expectancy thus facilitating the need for pension and protection based products. However, the awareness of Life Insurance, especially for protection and retiral corpus still remains low. 

India has the highest protection gap in the region, as growth in savings and life insurance coverage has lagged behind economic and wage growth. The protection gap growth rate is predicted to grow at 4% per annum  

Globally, the pandemic has impacted the economy on the whole. There were two things that gained significance during this period – the need for financial protection and health. Life and Health insurance have emerged as vehicles to protect one’s family and realise their long term financial goals.  

Are lean legal departments the future of in-house teams? Would you please share your thoughts and vision of CLDs of the future. 

It’s an interesting question. 

 We are one of the largest private life insurers in India and we have a team across legal, secretarial and compliance department consisting of lawyers, MBAs, CS and support staff.  

The size of the department depends upon the sector, size, sector, scale of operations, geographical spread. This could be managed well with extensive use of technology to optimize the resources thereby improving productivity and efficiency.  

It is important to focus on building a long-term and sustainable business, have an unwavering deep commitment to customers’ interests, create customer-friendly products, sustained investment in technology for customers and distributors alike, as well as implement policies for operational and sales efficiencies. 

The legal and compliance department needs to be strategic and be the driving engine for corporations and at the same time act as guardian of corporate governance principles. It should be able to anticipate issues and estimate risks, including, reputational, business, regulatory and legal risks. The key objective is to proactively identify issues, provide solutions, balance risk and growth, and create a governing framework to seamlessly operate and ensure compliance with the regulations applicable to the company. 

The legal team, in this era of fast-paced technological advancement, needs to be extremely agile, receptive to new ideas and changes, should be able to collaborate with the business, while ensuring compliance with the extant regulatory provisions. 

As companies become more and more cost-conscious, has business automation found more acceptance with in-house legal departments? How does your organisation leverage AI and LegalTech within the legal function? 

As a company, we understood the importance of technology to create a seamless customer experience and journeys several years back. Automation and use of technology play a very important role in my circle of influence. We constantly collaborate with our Business Service and Excellence team and our technology team to create technology solutions that bring in operational efficiencies and agility. 

Our department uses a mix of internally developed technology solutions and external applications to improve performance and drive efficiency. Some of the key aspects where technology is applied to a large extent are as under: 

Litigation management: With more than 400 branches, this tool acts as a case repository for effective monitoring of the life cycle of a legal case, drive controls, ascertain and report legal exposure. We also use technology systems to monitor the life cycle of cases on a real-time basis. This helps in real-time monitoring of our legal exposure and assists in preparation, review and prioritizing for important legal matters. We also use analytical tools to study co-relation between legal cases, repudiation of claims and customer complaints, and work towards legal solutions in reducing pendency of cases, customer complaints etc.  

Knowledge management: We use advanced legal tools in the market for knowledge management, legal alerts, subject matter legal opinions, judgement trackers to continuously update ourselves on the latest legal precedents impacting our industry and business. 

Contract management: We are working on migrating to new legal technology solution which will allow us to track renewals, the expiry of contracts, trigger key actionable alerts, key clauses library, auto-generation of standard templates, version controls, effective repository and monitoring of life cycle of contracts.  

Secretarial compliances – As a listed company, HDFC Life is required to comply with various rules/regulations prescribed by Securities and Exchange Board of India and listing regulations by Stock Exchanges. Among the various applicable regulations, the Company is required to comply with SEBI (Prohibition of Insider Trading) Regulations, 2015 ("PIT Regulations"). The compliances under PIT Regulations inter alia includes seeking pre-clearance by employees before entering into a trade-in company's securities, checking compliance with code of conduct, communicating closing and opening of the trading window, submission of disclosures to Stock Exchanges and many such related compliances. In this regard, HDFC Life has implemented a online system through which all the compliances are automated with minimal manual intervention. The system has enabled the employees and the organisation to comply with various requirements promptly and with ease. 

Core Compliance: In today's time, technology has to be leveraged to bring it to our advantage in our day to day activities. Compliance is a very important governance function in any organisation and with diverse business platforms and models, it is imperative that necessary controls are put in place to ensure compliance of all extant regulatory provisions and nothing falls between the cracks.  

With this objective, we have implemented a comprehensive Anti-Money Laundering solution which aides in Sanctions Screening, Transaction Monitoring as well as reporting of transactions under PMLA.  

Alongside, PMLA related compliances, it is equally important to ensure that sectoral compliances are also ensured as per the prescribed timelines. In order to do so, the Company has put in place a comprehensive solution to ensure all regulatory notifications are tracked and disseminated to the concerned teams who would have the primary responsibility to act upon them. Further, this workflow solution is capable of setting up triggers for seeking confirmation from various departments at predefined intervals, capture internal notes and comments for ease of reference and interpretation and also act as a repository for future reference. Further, this workflow based solution is capable to function both on internet and intranet based network protocols thereby coming to a huge help and assistance in this new normal of working environments. 

Your message to the new crop of lawyers wanting to make a mark for themselves in this industry. What other than hard work is a mantra to success? 

I believe that apart from hard work, there are other key traits like high integrity, ethics, sound legal judgment, developing regulatory expertise, domain knowledge, executive presence, delivering under pressure, one has to have holistic business approach and understanding to ensure value-added legal and compliance support.  

The approach to “think out of the box” and “what got you here might not get you there” also applies extensively and legal professionals need to calibrate working style and enhance knowledge curve accordingly to be perceived as business partners. 

As a final note, would you please recommend to our readers your favourite book or movie/series that left a lasting impression on you. 

The internationally acclaimed American legal drama TV series “Suits” highlighted the challenges in the life of a high profile corporate attorney and I believe most of the lawyers will relate to the hardworking high profile lawyer, Harvey Specter in the series, also perceived as the “Problem Solver” in the series. One of my favourites take away and quote from the series is ‘The only time success comes before work is in the dictionary’ so essentially everyone has to go through the grind to achieve success. 

I was highly motivated during the early days in my career with the book” What they don’t teach at Harvard business school” by Mark.H.McCormack. I would always rely more on real practical experience than the textbook and classroom training. The intensity of real-life stress and business requirement of “now and here” teaches you a lot more.