WHAT IS INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (IRDA) AND FUNCTION OF IRDA.
After 1991 due to liberalization in the economic policy, many private players started their business in India which has brought with it their own evil of unhealthy competition.
Hence a Malhotra committee was formed to effectively regulate insurance companies.
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.
Section 4 of the IRDAI Act 1999 specifies the authority's composition. It is a ten member body consisting of a chairman, five full-time and four part-time members appointed
by the government of India. At present (1 Sept, 2018), the authority is chaired by Dr. Subhash C. Khuntia and its full-time members are Mrs T.L. Alamelu, K. Ganesh, Pournima Gupte, Praveen Kutumbe and Sujay Banarji.
Functions of IRDA
The functions of the IRDAI are defined in Section 14 of the IRDAI Act, 1999 and
include:
1. Issuing, renewing, modifying, withdrawing, suspending or cancelling registrations
2. Protecting policyholder interests
3. Specifying qualifications, the code of conduct and training for intermediaries and
agents
4. Specifying the code of conduct for surveyors and loss assessors
5. Promoting efficiency in the conduct of insurance businesses
6. Promoting and regulating professional organisations connected with the insurance and
re-insurance industry
7. Levying fees and other charges
8. Inspecting and investigating insurers, intermediaries and other relevant organisations
9. 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)
10. Specifying how books should be kept
11. Regulating company investment of funds
12. Regulating a margin of solvency
13. Adjudicating disputes between insurers and intermediaries or insurance intermediaries
14. Supervising the Tariff Advisory Committee
15. Specifying the percentage of premium income to finance schemes for promoting and
regulating professional organisations
16. Specifying the percentage of life and general-insurance business undertaken in the
rural or social sector
17. 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.
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