IRDA - Insurance Regulatory Development and Authority is the statutory, independent and apex body that governs and supervise the Insurance Industry in India.
- It was constituted by Parliament of India Act called Insurance Regulatory and Development Authority of India (IRDA of India) after the formal declaration of Insurance Laws (Amendment) Ordinance 2014, by the President of India Pranab Mukherjee on December 26,2014.
Establishment:
- IRDA Act was passed upon the recommendations of Malhotra Committee report (7 Jan,1994), headed by Mr R.N. Malhotra (Retired Governor, RBI)
- Main Recommendations - Entrance of Private Sector Companies and Foreign promoters & An independent regulatory authority for Insurance Sector in India
- In April,2000, it was set up as statutory body, with its headquarters at New Delhi.
- The headquarters of the agency were shifted to Hyderabad, Telangana in 2001.
Objectives of IRDA:
- To promote the interest and rights of policy holders.
- To promote and ensure the growth of Insurance Industry.
- To ensure speedy settlement of genuine claims and to prevent frauds and malpractices
- To bring transparency and orderly conduct of in financial markets dealing with insurance.
Organisational Setup of IRDA:
IRDA is a ten member body consists of :- One Chairman (For 5 Years & Maximum Age - 60 years )
- Five whole-time Members (For 5 Years and Maximum Age- 62 years)
- Four part-time Members (Not more than 5 years)
The present Chairman of IRDAI is Subhash Chandra Khuntia.
Functions And Duties of IRDA:
Section 14 of IRDA Act,1999 lays down the duties and functions of IRDA:- It issues the registration certificates to insurance companies and regulates them.
- It protects the interest of policy holders.
- It provides license to insurance intermediaries such as agents and brokers after specifying the required qualifications and set norms/code of conduct for them.
- It promotes and regulates the professional organisations related with insurance business to promote efficiency in insurance sector.
- It regulates and supervise the premium rates and terms of insurance covers.
- It specifies the conditions and manners, according to which the insurance companies and other intermediaries have to make their financial reports.
- It regulates the investment of policyholder's funds by insurance companies.
- It also ensures the maintenance of solvency margin (company's ability to pay out claims) by insurance companies.
Related News:
- FDI limit in Insurance Sector has been increased to 49% from 26%, approved by The Union Cabinet. The proposal was made by Finance Minister Arun Jaitley.
- IRDAI has celebrated 19th April,2015 as Insurance Awareness Day at Hyderabad. (came into existence in 2000)
- IRDAI has imposed a fine of Rs.10 lakh on TATA AIA Life Insurance for violation of excess payment to corporate agents. TATA AIA Life Insurance is joint venture company formed by Tata Sons Ltd. and AIA Group Ltd. CEO and MD of the company is Mr Naveen Tahilyani.
- IRDAI has changed the norms related to cancellation and change of name of nominee. The insurer will charge fee for any such modification. The fee is up to Rs. 50 for policies obtained online and up to Rs.100 for others.
- IRDAI has imposed a fine of Rs.20 lakh on APPOLO MUNICH HEALTH INSURANCE COMPANY for selling its policies through non-authorised insurance selling website makemytrip.com. The CEO of APPOLO MUNICH HEALTH INSURANCE COMPANY is Antony Jacob and the Chairman and CEO of makemytrip.com is Deep Kalra.
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