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IRDA : Insurance Regulatory and Development Authority

The Insurance Regulatory and Development Authority of India (IRDAI) is an autonomous, statutory body tasked with regulating and promoting 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.

Headquarters are in Hyderabad, Telangana, where it moved from Delhi in 2001.

IRDAI Regional Offices are at New Delhi & Mumbai.

History :

Following the recommendations of the Malhotra Committee, in 1999 the Insurance Regulatory and Development Authority (IRDA) was constituted to regulate and develop the insurance industry and was incorporated in April 2000.

Objectives of the IRDA include promoting competition to enhance customer satisfaction with increased consumer choice and lower premiums while ensuring the financial security of the insurance market.

The IRDA opened up the market in August 2000 with an invitation for registration applications; foreign companies were allowed ownership up to 26 percent.

The authority, with the power to frame regulations under Section 114A of the Insurance Act, 1938, has framed regulations ranging from company registrations to the protection of policyholder interests since 2000.

In December 2000, the subsidiaries of the General Insurance Corporation of India were restructured as independent companies and the GIC was converted into a national re-insurer.

Parliament passed a bill de-linking the four subsidiaries from the GIC in July 2002. There are 28 general insurance companies, including the Export Credit Guarantee Corporation of India and the Agriculture Insurance Corporation of India, and 24 life-insurance companies operating in the country.

With banking services, insurance services add about seven percent to India’s GDP.

In 2013 the IRDAI attempted to raise the foreign direct investment (FDI) limit in the insurance sector to 49 percent from its current 26 percent.

The FDI limit in the sector was raised to 100 percent according budget 2019.

Structure :

Section 4 of the IRDAI Act 1999 specifies the authority's composition.

 It is a ten-member body, appointed by the government of India.

 It is a ten-member body consisting of a chairman, five full-time and four part-time members.

 At present (1 Sept, 2018), the authority is chaired by Dr. Subhash Chandra Khuntia

 Its full-time members are Mrs T.L.Alamelu, K.Ganesh, Pournima Gupte, Praveen Kutumbe and Sujay Banarji.

Functions :

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

 Issuing, renewing, modifying, withdrawing, suspending or cancelling 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 organisations connected with the insurance and re-insurance industry.

 Levying fees and other charges.

 Inspecting and investigating insurers, intermediaries and other relevant organisations.

 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 organisations.

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

 Specifying the form and the manner in which books of accounts shall be maintained, and statement of accounts shall be rendered by insurers and other insurer intermediaries.

Last updated on: 02/10/2019


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