Here is brief profile of Insurance Regulatory
and Development Authority (IRDA)
Insurance Regulatory & Development Authority
Insurance Regulatory & Development Authority is
regulatory and development authority under Government of India in order
to protect the interests of the policyholders and to regulate, promote
and ensure orderly growth of the insurance industry. It is basically a
ten members' team comprising of a Chairman, five full time members and
four part-time members, all appointed by Government of India. This
organization came into being in 1999 after the bill of IRDA was passed
in the Indian parliament.
Powers and Functions of IRDA
- It issues the applicants in insurance arena, a certificate of
registration as well as renewal, modification, withdrawal,
suspension or cancellation of such registrations.
- It protects the interests of the policy holders in any insurance
company in the matters related to the assignment of policy,
nomination by policy holders, insurable interest, and resolution of
insurance claim, submission value of policy and other terms and
proposals in the contract.
- It also specifies obligatory credentials, code of conduct and
practical instructions for mediator as well as the insurance
company. Apart from this, it also defines the code of conduct for
the surveyors and loss assessors involved with the insurance
business.
- One of the major functions of IRDA includes endorsing competence
in the insurance business. Apart from this, upholding and regulating
professional organizations in insurance and re-insurance business is
also a major duty of IRDA.
- IRDA is also entitled to for asking information, undertaking
inspection and investigating the audit of the insurers, mediators,
insurance intermediaries and other organizations related to the
insurance sector.
- It is also concerned with the regulation of the rates, profits,
provisions and conditions that may be offered by insurers in respect
of general insurance business if it is not controlled or regulated
by the Tariff Advisory Committee.
- It is also entitled to supervise the functioning of the Tariff
Advisory Committee.
- IRDA specifies the terms and pattern in which books of accounts
are to be maintained and statement of accounts shall be provided by
insurers and other insurance mediators.
- It also regulates investment of funds by insurance companies as
well as the maintenance of margin of solvency.
- It is also empowered to be involved in the arbitration of
disagreements between insurers and intermediaries or insurance
intermediaries.
- It is meant to specify the proportion of premium income of the
insurer to finance policies.
- IRDA also specifies the share of life insurance business and
general insurance business to be accepted by the insurer in the
rural or social sector.
Impact Of IRDA On Indian Insurance Sector
The creation of IRDA has brought revolutionary changes in the Insurance
sector. In last 10 years of its establishment the insurance sector has
seen tremendous growth. When IRDA came into being; only players in the
insurance industry were Life Insurance Corporation of India (LIC) and
General Insurance Corporation of India (GIC), however in last decade 23
new players have emerged in the filed of insurance. The IRDA also
successfully deals with any discrepancy in the insurance sector.
