IRDARole,ObjectivesandFunctions

PublishedonThursday,September24,2015

IRDAInsuranceRegulatoryDevelopmentandAuthorityisthestatutory,independentand
apexbodythatgovernsandsupervisetheInsuranceIndustryinIndia.
ItwasconstitutedbyParliamentofIndiaActcalledInsuranceRegulatoryandDevelopment
AuthorityofIndia(IRDAofIndia)aftertheformaldeclarationofInsuranceLaws
(Amendment)Ordinance2014,bythePresidentofIndiaPranabMukherjeeonDecember
26,2014.

Establishment:
IRDAActwaspassedupontherecommendationsofMalhotraCommitteereport(7
Jan,1994),headedbyMrR.N.Malhotra(RetiredGovernor,RBI)
MainRecommendationsEntranceofPrivateSectorCompaniesandForeign
promoters&AnindependentregulatoryauthorityforInsuranceSectorin
India
InApril,2000,itwassetupasstatutorybody,withitsheadquartersatNewDelhi.
TheheadquartersoftheagencywereshiftedtoHyderabad,Telanganain2001.

ObjectivesofIRDA:
Topromotetheinterestandrightsofpolicyholders.
TopromoteandensurethegrowthofInsuranceIndustry.
Toensurespeedysettlementofgenuineclaimsandtopreventfraudsandmalpractices

Tobringtransparencyandorderlyconductofinfinancialmarketsdealingwithinsurance.

OrganisationalSetupofIRDA:
IRDAisatenmemberbodyconsistsof:
OneChairman(For5Years&MaximumAge60years)
FivewholetimeMembers(For5YearsandMaximumAge62years)
FourparttimeMembers(Notmorethan5years)
ThechairmanandmembersofIRDAIareappointedbyGovernmentofIndia.
ThepresentChairmanofIRDAIisMrT.SVijayan.

FunctionsAndDutiesofIRDA:
Section14ofIRDAAct,1999laysdownthedutiesandfunctionsofIRDA:
Itissuestheregistrationcertificatestoinsurancecompaniesandregulatesthem.
Itprotectstheinterestofpolicyholders.
Itprovideslicensetoinsuranceintermediariessuchasagentsandbrokersafter
specifyingtherequiredqualificationsandsetnorms/codeofconductforthem.
Itpromotesandregulatestheprofessionalorganisationsrelatedwithinsurancebusiness
topromoteefficiencyininsurancesector.
Itregulatesandsupervisethepremiumratesandtermsofinsurancecovers.
Itspecifiestheconditionsandmanners,accordingtowhichtheinsurancecompaniesand
otherintermediarieshavetomaketheirfinancialreports.
Itregulatestheinvestmentofpolicyholder'sfundsbyinsurancecompanies.
Italsoensuresthemaintenanceofsolvencymargin(company'sabilitytopayout
claims)byinsurancecompanies.

RelatedNews:
FDIlimitinInsuranceSectorhasbeenincreasedto49%from26%,approvedby
TheUnionCabinet.TheproposalwasmadebyFinanceMinisterArunJaitley.
IRDAIhascelebrated19thApril,2015asInsuranceAwareness
DayatHyderabad.(cameintoexistencein2000)
IRDAIhasimposedafineofRs.10lakhonTATAAIALifeInsuranceforviolation
ofexcesspaymenttocorporateagents.TATAAIALifeInsuranceisjointventure
companyformedbyTataSonsLtd.andAIAGroupLtd.CEOandMDofthecompanyisMr
NaveenTahilyani.

IRDAIhaschangedthenormsrelatedtocancellationandchangeofnameof
nominee.Theinsurerwillchargefeeforanysuchmodification.ThefeeisuptoRs.
50forpoliciesobtainedonlineanduptoRs.100forothers.
IRDAIhasimposedafineofRs.20lakhonAPPOLOMUNICHHEALTH
INSURANCECOMPANYforsellingitspoliciesthroughnonauthorisedinsuranceselling
websitemakemytrip.com.TheCEOofAPPOLOMUNICHHEALTHINSURANCECOMPANYis
AntonyJacobandtheChairmanandCEOofmakemytrip.comisDeepKalra