IRDA

The Insurance Regulatory and Development Authority of India (IRDAI) is a regulatory body under the jurisdiction of the Ministry of Finance, Government of India, and is tasked with regulating and licensing the insurance and re-insurance industries in India. It was constituted by the Insurance Regulatory and Development Authority Act, 1999, an Act of Parliament passed by the Government of India. The agency's headquarters are in Hyderabad, Telangana, where it moved from Delhi in 2001.

Purpose

Insurance in India dates back to the year 1850 with the first General Insurance company established in Calcutta. Soon, with the passage of years, the market became competitive as many insurers started emerging both in life and non-life sectors.

Each company practiced business on its rates and rules. It made customers insecure which brought the credibility of the insurance market at stake. As early as the government realized this fact, they thought of securing the customer’s interest first and hence established an independent regulatory body called IRDA.

Over time, new demands rolled and the market got flooded with several insurance products. As a responsible head of the family would act to prevent the family from any damage, IRDA monitors the development of the insurance industry and other related activities.

IRDA on the same lines of industrial practice plays a vital role like

• Ensures and encourages the systematic growth of the insurance industry just to benefit the common people who invest in policies to look for safety.

• Protects the interest of the policyholders so that they trust the system.

• Promote high standards of integrity and fair dealings in the market.

• Resolve disputes of all kinds and speed up claim settlement.

• Set standards and conduct vigilance to check for scams or frauds.

The Indian economy is growing which further promotes the entrance of new insurance players into the market. To keep the pace of growth even-handed, IRDA needs to maintain standards of quality. It will further contribute to strengthening the financial capacity of a country as a whole.

Functions

The functions of the IRDAI are defined in Section 14 of the IRDAI Act, 1999, and include:

• Issuing, renewing, modifying, withdrawing, suspending, or canceling registrations

• Protecting policyholder interests

• Specifying qualifications, the code of conduct, and training for intermediaries and agents

• Specifying the code of conduct for surveyors and loss assessors

• Promoting efficiency in the conduct of insurance businesses

• Promoting and regulating professional organizations connected with the insurance and reinsurance industry

• Leaving fees and other charges

• Inspecting and investigating insurers, intermediaries, and other relevant organizations

• Regulating rates, advantages, terms, and conditions which may be offered by insurers not covered by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938)

• Specifying how books should be kept

• Regulating company investment of funds

• Regulating a margin of solvency

• Adjudicating disputes between insurers and intermediaries or insurance intermediaries

• Supervising the Tariff Advisory Committee

• Specifying the percentage of premium income to finance schemes for promoting and regulating professional organizations

• Specifying the percentage of life- and general insurance business undertaken in the rural or social sector

• Specifying the form and how books of accounts shall be maintained, and statement of accounts shall be rendered by insurers and other insurer intermediaries.