Insurance Regulatory and Development Authority is the full form of IRDA. This report provides an analysis of the Insurance Regulatory and Development Authority (i.e. IRDA) of India. This research report covers IRDA’s role and functions, significant aspects, latest developments on IRDA, regulatory frameworks, issues and concerns, and other aspects related to the authority.
IRDA is a statutory body established by a separate act i.e. IRDA Act, 1999 that was enacted on 29th April 2000. It started functioning with effect from 8th October 2000 after receiving the certificate of commencement of business under Section 3(IV) of the Companies Act, 1956 from the Registrar of Companies, New Delhi.
The headquarter of IRDA is situated in Hyderabad, Telangana. And it’s functions with constitutional, legal, and institutional support under the chairmanship of Dr. J. S. Deepak, which is funded by fees and internal resources. The main aim of the IRDA is to protect and secure the interest of the policyholders regarding any unfair treatments or frauds, and to maintain fair and transparent growth in the finance market that deals with insurance.
The Insurance Regulatory and Development Authority (IRDA) was set up in the year 2000, to create more competition in the insurance market and enhance the growth of general insurance products. In the process, IRDA has established the regulatory framework for running the insurance business in India.
Table of Contents
HISTORY OF IRDA
Insurance Regulatory and Development Authority (IRDA) was established in the country in the year 2000 as an administrative authority. This organization aims to provide a regulatory regime for the development of the insurance industry in India through the implementation and monitoring of various acts, rules, and regulations related to the insurance business.
Ordinance no. LII of 2014 (presently Act no. XXX of 2015) passed by our Former President Late Pranab Mukerjee, commonly known as the Insurance Regulatory and Development Authority (IRDA) Act, later became law and governed the insurances in India. It establishes IRDA(authority), which is responsible for policy supervision and regulation for the insurance sector, as well as development, arbitral mediation, and promotion of the insurance sector in India.
OBJECTIVES AND MOTIVES OF IRDA
The IRDA was formed with the main motive of providing statutory insurance regulatory mechanisms free from political interference for effective and efficient regulation of insurance in India through a separate and independent authority. The IRDA frequently reviews the existing regulations to ensure the healthy growth of the insurance industry in India.
With a vision to be the world’s best statutory body that regulates all the insurance companies and seeks to have an open market where there is no monopoly and all the policies are available that bring affordable health coverage and security to the insurance buyers or the policyholders.
RULES AND GUIDELINES OF IRDA
MEMBERS OF IRDA
As per rules, this authority contains a total of 10 members, including one chairman and 9 other employees, all appointed by the government of India, out of which there are five full-time members and the rest are part-time members.
POWER AND FUNCTIONS OF IRDA
Section 14 of the IRDA Act specifies the authority’s functions and powers. Here are the powers and functions as follows:
- The IRDA has the authority to issue and register certificates for insurance companies. The IRDA can also withdraw, suspend, or cancel a certificate of registration.
- In terms of transferring or assigning policies, nominations, claim settlements, surrender values, or any other terms and conditions related to insurance contracts, the IRDA always protects the interests of their policyholders.
- Insurance agents and intermediaries must meet the required qualifications, training, and conduct regulations set by IRDA.
- Promotes the efficiancy of counduct in the insurance business
- Imposing fines and charges for carrying this act.
EFFECTS OF IRDA
TYPES OF INSURANCE THAT REGULATED BY IRDA
LIST OF LIFE INSURERS COMES UNDER IRDA
LIST OF NON-LIFE INSURANCE COMPANIES THAT DOESN’T FALL UNDER IRDA
DIFFERNCE BETWEEN IRDA AND SEBI
RECENT VIEWS ON IRDA
- In recent years, due to the rise of mental health problems in India, the Supreme Court ordered IRDA to cover mental health treatment under health coverage and make it mandatory for all their policyholders.
- Also, IRDA hasn’t issued any fresh licenses for over four years due to the complexities arising in the market. To keep the market afloat, new investors and IPO companies had to pass through a complicated process, which took over six months.
CONCLUSION
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