Insurance in law and economics is a form of
risk management primarily used to hedge
against the risk of contingent loss.
Insurance is defined as the equitable transfer
of the risk of a potential loss from one entity
to another, in exchange to premium.
An insurer, or insurance carrier, is a company
selling the insurance.
The insured, or policyholder, is the person or
entity buying the insurance policy.
1818-Oriental Life Insurance Company-1st
1870-Bombay Mutual life Assurance society-
1st life insurance company.
1912-The Indian life assurance Companies act
enacted the 1st law to regulate the Life
1928-The Indian life assurance Companies act
enacted to enable the Government to collect
statistical information about both Life and
Non-Life insurance businesses.
The Act was passed in 1999.
"To Protect the interests of the
policyholders, to regulate, promote and
ensure orderly growth of the insurance
industry and for matters connected
therewith or incidental thereto. "
a)To protect the interests of
the policy holders
b)To promote ,regulate and ensure orderly
growth of the insurance industry and four
matters connected there with or incidental
c)Conduction of insurance
businesses across India in an
As per the section 4 of IRDA Act 1999,
IRDA specify the composition of authority as
a ten member team consisting of,
Not more than five whole – time members.
Not more than four part – time members.
(All appointed by the Govt. Of India)
The Authority shall have the duty to
regulate, promote and ensure orderly growth of
the insurance business and re-insurance
1. Registration (licensing) including renewal of
registration of insurance companies.
2. Licensing of insurance intermediaries such as
agents, surveyors and loss assessors, third
party administrators, brokers, etc.
3. Official approval of agent’s training
According to the Section 14 of IRDA Act of 1999
there are certain duties:
To regulate, promote and ensure orderly growth of
the insurance business and re-insurance business.
To issue a certificate of registration and powers to
renew, modify, withdraw, suspend or cancel the
Protection of the interests of the policy holders.
To specify qualifications, code of conduct and
practical training for intermediaries.
To specify the code of conduct for surveyors and
The Insurance Advisory Committee shall
consist of not more than twenty-five
members excluding ex-officio members to
represent the interests of commerce,
industry, transport, agriculture.
The Chairperson and the members of the
Authority shall be the ex officio Chairperson
and ex officio members of the Insurance
Insurers have a freedom to specify max. renewal age.
Insurer has to now give a min. 30 days grace period for
All health policies will now give policyholder a free-look
period of 15 days.
Every proposal for health insurance product shall provide
for “nomination”. Though as per Section 39 of Insurance
Act, “nomination” is optional – however, it is highly
Insurers may provide coverage for non-allopathic
treatments provided they are taken at recognized
Insurer has to settle claim within 30 days, cannot asked for
document in one go.
Identification card within 30days.
products with a term of 1 year of less, at least 50% of the
cost of proposal will be borne by Insurer