IRDA or The Insurance Regulatory and Development Authority Of India is an autonomous statutory body that is responsible for regulating, protecting and promoting Insurance and re-insurance industries in India. It was constituted under The Insurance Regulatory and Development Authority Act, 1999 an Act of The Parliament of India.
As per the section 4 of IRDA Act 1999, specifies the composition of the Authority. The Authority is a 10 member team consisting of
Five whole time members
Four Part-time members
IRDA’s head office is at Hyderabad where all the major activities including ensuring the financial stability of insurers and monitoring market conduct of various regulated entities is carried out from the Head office. IRDA’s regional offices are at Mumbai and New Delhi.
The New Delhi regional office focuses on spreading consumer awareness and handling of insurance grievances besides providing the required support for inspection of Insurance companies. The office is also responsible for licensing of surveyors. The Mumbai regional office functions in the same manner but in the Western region.
The Insurance Act, 1938 is the chief Act overseeing the Insurance sector in India. It gives the forces to IRDAI to outline guidelines which set out the administrative structure for the management of the entities working in the division. Further, there are sure different Acts which administer explicit lines of Insurance business and capacities, for example, Marine Insurance Act, 1963 and Public Liability Insurance Act, 1991.
To protect the interest and ensure fair treatment to policyholders.
To realize quick and efficient development of the Insurance business (counting annuity and superannuation instalments), to support the normal man, and to give long term assets to quickening development of the economy.
To set, advance, screen and implement expectations of integrity, money related adequacy, reasonable dealing of those it directs.
To guarantee rapid settlement of real cases, to prevent Insurance cheats and different acts of malpractices and set up viable complaint redressal cell.
To advance decency, straightforwardness and systematic procedure in money related markets managing Insurance and construct a solid administration data framework to uphold elevated requirements of budgetary sufficiency among showcase players.
To make a move where such measures are insufficient or inadequately implemented.
To achieve the ideal measure of self-regulation in the everyday working of the business steady with the necessities of the prudential guideline.
Segment 14 of the IRDAI Act,1999 indicates the Duties, Powers and elements of the Authority. These incorporate the accompanying:
To give licenses to (re) Insurance organizations and Insurance intermediaries
To secure the interests of policyholders.
To control speculation of assets by Insurance organizations, proficient associations associated with the (re)Insurance business; support margin of solvency.
To call for data from, undertaking assessment of, leading enquiries and examinations of the elements associated with the Insurance business.
To determine essential capabilities, set of accepted rules for the middle person or Insurance delegates, specialists and surveyors.
To recommend the structure and way in which books of record will be kept up and articulation of records will be rendered by safety net providers and other Insurance delegates.
Solvency of Insurers: So as to screen and control solvency necessities, it has been made necessary to submit solvency reports on quarterly premises. If there should arise an occurrence of any deviation, the Supervisor starts important and appropriate advances in order to guarantee that the Insurer makes prompt remedial moves to reestablish the solvency position at the base legal level. Calculation of solvency margin considers the characteristic hazard that individual line of business postures to the guarantor. Higher prerequisites are set for hazardous lines of business contrasted with others presenting less hazard to the safety net providers.
Asset Liability Management: Under Asset-Liability Management reporting, Insurers must give the year wise anticipated incomes, in regard of the two resources and liabilities. Safety net providers must keep up confounding stores if there should arise an occurrence of any bungle among resources and liabilities as a piece of the worldwide stores. Further, Life safety net providers are required to present a report on affectability and situation testing exercise in the endorsed position. Non-life guarantors must present a report on 'Money related Condition' covering the affectability examination of the monetary sufficiency in meeting the policyholders' liabilities.
Micro Insurance and Rural sector obligations: The IRDA had given smaller scale Insurance guidelines for the security of low salary individuals with reasonable Insurance items to help adapt to and recuperate from common risks. These guidelines have permitted Non-Governmental Organizations (NGOs), Self Help Groups (SHGs) and other allowed entities to go about as specialists to Insurance organizations in showcasing the smaller scale Insurance items and have likewise permitted both life and non-life guarantors to promote combi-micro Insurance items.
1. What is the IRDA Act?
IRDA Act is the foundation of this institution that is under the IRDA Act 1999, which protects the interests of policyholders, regulates, promotes and ensures orderly growth of insurance industries in India.
2. Why is IRDA Important?
To govern delicate issues that involve public money a separate institution is required to oversee the rights of the public and maintain transparency in transactions.