Irda(the insurance regulatory and development authority)

INSURANCE (FIFTH UNIT)

1. Introduction As per insurance act 1938, government appointed controller of insurance to properly regulate and approve terms and conditions of various plans. After nationalisation of Insurance industry , the supervision and responsibilities of the controller has been reduced. And then with the open up of liberlisation and globalisation, the private companies are permitted to transact insurance business in India. Our government of India in April 1993, appointed the committee for reforms in insurance sector with shri.R.N.Malhotra , former governor of RBI. This committee submitted report in january 1994. As per committee recommendatons our government setup a regulatory body known as IRDI.

2. 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. The IRDAI's headquartered in Hyderabad, Telangana , where it moved from Delhi in 2001. IRDA ACT Insurance Regulatory and Development Authority ( IRDA )  Act , 1999 spells out the Mission of IRDAI as: “... to protect the interests of the policyholders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto......”

3. Insurance Advisory committee (IAC) Consists of not more than 25 members to represent the interest of commerce, industry, transport, agriculture , consumer , surveyors , agents, intermediaries, organisations engaged in safety and loss prevention, research bodies and employees associations in the insurance sector. As per Section 25 of IRDA Act 1999, the IAC advises IRDA in framing of regulations

4. IRDA(The Insurance Regulatory and Development Authority) The IRDA bill was passed in December 1999and became an act in April 2000 The IRDA is a ten member body appointed by the government of India consisting of Chairman Five whole time members Four part-time members

5. Objectives of IRDA To take care of the policy holders interest To open the insurance sector for private sector To ensure continued financial soundness and solvency To regulate insurance and reinsurance companies To eliminate dishonesty and unhealthy competition. To supervise the activity of intermediaries To amend the insurance act 1938, the LIC Act 1956 and the General business nationalisation Act 1972.

6. Duties and Powers of IRDA To regulate, promote and ensure orderly growth of insurance business. To exercise all powers and functions of controller of insurance. To promote and regulate proportional organisations connected with insurance business. To call for information from undertake inspection and conduct investigation including audit of the insurer, intermediaries and other connected organisations and persons. To control and regulate rates and terms and conditions that may be offered by the insurers in respect of general insurance matters not so controlled by Traiff Advisory Committee under section 64(U) of the insurance act. To prescribe the manner and form in which accounts may be maintained and submitted by the insurers and intermediaries. To regulate margins if solvency To regulate investment of funds To adjudicate disputes between insurers and intermediaries. To protect the interest of policy holders in settlement of claims and terms and conditions of policies.