The IRDA (Insurance regulatory and development authority) of India is a type of statutory body to regulate and develop all the insurance industries set up in India. The IRDA is established in 1999 through an act passed by the Indian parliament. Headquartered in Hyderabad,
IRDA promotes all the insurance businesses in India. All the activities like monitoring the market and ensuring the financial stability of insurances are carried out from the head office in Hyderabad.
IRDA aims to carry forward in the interest of the policyholder; it ensures the fastest resolution of claims. prevent frauds and malpractices; ensure fair conduct in the financial market when dealing with insurance.
Following the recommendations of the Malhotra Committee report. In 1999, IRDA the insurance regulatory development authority was mainly constituted as an autonomous body for regulating and developing the insurance industry. it was incorporated as a kind of statutory body in April 2000.
Insurance regulatory and development authority (IRDA) is the national regulatory body for the insurance industry ( mostly both life and non-life insurance companies comes under the government of India, situated in Hyderabad.
Composition of authority under IRDA act,1999
As we know the section 4 of the IRDA act’ 1999, the insurance regulatory and the development authority (IRDA, which was constituted by one of the acts of parliament ) specifies the main composition of the authority.
The authority is a ten-member team consisting of
- A chairman;
- Five whole-time members;
- Four part-time members,
(Mainly all are appointed by the Government of India)
The office of the controller was established to implement this act. Again was amended in 1950 as per the need of the hour, but given growing malpractices in the life insurance business and also due to the illiteracy level being high and lack of will of the spread of life insurance business, it was nationalized by the Government of India.
LIC was passed in June; 1956, and this act came into force on 1st September 1956.
In the early ’90s, with the world market forces plying with full strength; growing literacy level; better regulatory systems, and need for fast growth in this sector.
MISSION OF IRDA
- To protect the interest and to provide secure fair treatment to all the policyholders.
- for bringing the fastest and orderly growth of all insurance industries, mainly for the benefit of the common persons, and to provide the long-term funds for accelerating the growth of the economy.
- To make ensure that insurance customers receive accurate, clear, and correct information about all the products and services and make them aware of their responsibilities and duties in this regard.
- For promoting the higher standards.
- To provide the customers with the right advice and proper advice.
- It promotes fairness and transparency.
- Customer service/ grievance redressal.
OBJECTIVES OF IRDA
- To promote and ensure the growth of the insurance industry.
- For promoting the rights of policyholders.
- For making ensure speedy settlement of genuine claims and to prevent frauds.
- For bringing the transparency and orderly in conduction in financial markets and dealing with insurance.
- To open up the insurance sector for the private sector.
- For making ensure of continued financial soundness and solvency.
- To eliminate dishonesty and unhealthy competition.
- To supervise the activities of intermediaries in the insurance sector.
DUTIES, POWERS, AND FUNCTIONS OF IRDA
As section 14 of IRDA ACT, 1999 lays down all duties, powers, and functions of IRDA without any prejudice to the generality of all the provisions contained in sub-section (1), the powers and functions of the authority shall include the following are ;
Issues to the applicant a certificate of registration; for modifying, renewing, modifying, withdrawing, suspend or canceling some such registration; preference in registration to be given to companies providing with health insurance.
Protection of interests of policyholders in matters concerning assigning of policy, nomination by the policyholder, insurable interest, settlement of insurance claim, surrender value of the policy, and other terms and conditions of contracts of insurance.
Specifying requisite qualifications and practical training for insurance agents and intermediaries.
Specifying the code of conduct for surveyors and loss assessors.
For Promoting the efficiency in the type of conduct of insurance business.
To regulate the professional organizations which are connected with the type of insurance and reinsurance business for carrying out the purpose of the IRDA act.
Calling for information from, undertaking inspection of conducting inquiries and investigations, including audit of the insurer, insurance intermediaries, and other organizations connected with the insurance business.
Control and regulations of rates, terms, and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the tariff advisory committee section 64U of the insurance act, 1938.
It formulates the regulations and enforcement of discipline.
It provides consumers well education and assistance.
It regulates and oversees all the premium rates and terms of non-life insurance covers.
It promotes supervision of the functioning of the companies and intermediaries including all reviews of company annual statements.
In conclusion, after a deep study on the topic of Insurance regulatory and development authority (IRDA) and functions, it covers the objectives which I have set ( complete information of IRDA, its history, mission, objectives, duties, powers, and mainly its functions.)
I have observed that IRDA (Insurance regulatory and development authority) is very important for policyholders, as we all know that insurance is a very important part of the economy which requires to change from time to time accordingly as per the needs of the people. Every individual has the authority and rights to be aware of the opportunities that are mainly available to them in the form of life and health insurance.
The Insurance regulatory and development authority plays a significant role in ensuring that the interests of the policyholders remain secured.it regularly issues advisories to all the insurance companies about all the changes in any rule and regulations. Here I have learned from the functions, duties, powers of IRDA is how to protect the interest of policyholders.
You may refer to this video if you want the explanation in Hindi