Irda

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Here I explained IRDA

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Irda

  1. 1. •The IRDA was setup in 1996. but it was formally constituted as a regulator of insurance industry in April 2000. •The regulatory was initially known as the Insurance Regulory Authority. •But was subsequently renamed as Insurance Regulatory and Development Authority as it was provided that it had a broder role to perform in the Indian insurance market.
  2. 2.  It has not only to frame and issue statutory regulatory stipulations, guidelines and clarification but it has also to perform a developmental and promotional role.  The developmental and promotional role of the regulator include facilitating the growth of the market by attracting a large number of players integrating of the insurance market with the domestic financial services market, and synchronizing the Indian insurance market with that of global insurance market
  3. 3.  Objectives of IRDA:  1. policy holder protection.  2. Healthy growth of the insurance market. 
  4. 4.  The IRDA has a chairman and four full time and four     part time members. the IRDA has constituted the insurance advisory committee has brought out seventeen regulations. In addition, representatives of consumers, industry, insurance agents, women’s organization, and other interest groups are a part of this committee. It has also formed a consumer advisory committee and surveyor and loss assessors committee. It has a panel of eligible charted accountants to carry out investigation, inspection and so on.
  5. 5.  Mission statement of the IRDA:  To protect the interest Of and secure fair treatment to policy holders.  To bring about speedy and orderly growth of the insurance industry for the benefit of the common man, and to provide long-term funds for accelerating growth of the economy.  To set promote, monitor and enforce high standards of integrity, financial soundness, fair dealing, and competence of those it regulates.
  6. 6.  To ensure that insurance customer receive precise, clear, and correct information about products and services and make them aware of their responsibilities and duties in this regard.  To ensure speedy settlement of genuine claims to prevent insurance frauds, and other malpractices and put n place effective grievance redressal machinery.
  7. 7.  To promote fairness, transparency and orderly conduct in financial markets dealing with insurance and build a reliable management information system to enforce high standards of financial soundness amongst market players.  To take action where such standards are inadequate or in effectively enforced.  To bring about optimum amount of self-regulation I day-to-day working of industry consistent with the requirements of prudential(acting in a cautious and sensible way) regulations.
  8. 8. Duties powers and functions of the IRDA  Section 14 of the IRDA act 1999, lays down the duties, powers, and functions of the IRDA.  Subject to the provision of the act and any other law for the time being in force, the authority shall have the duty to regulate, promote and ensure orderly growth of the insurance business and reinsurance business.
  9. 9.  The power and functions of the authority shall include the following:  Issuing to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration.  protection of the interest of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance.
  10. 10.  Specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents.  Specifying the code of conduct for surveyors and loss assessors.  Promoting efficiency in the conduct of insurance business.  Promoting and regulating professional organizations connected with the insurance and reinsurance business.
  11. 11.  Control and regulation of the rate, advantages, terms and conditions that may be offered by insurers in respect of general insurance business.  Specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries.  Specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries.
  12. 12.  Regulating investment of funds by insurance companies.  Regulating maintenance of margin of solvency.  Adjudication of disputes between insurers and intermediaries or insurance intermediaries. Supervising the functioning of the tariff advisory committee.  Specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organization referred in clause (f)
  13. 13.  Specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector, and exercising such order power as may be prescribed.
  14. 14. Operation of the IRDA  The IRDA has developed its internal parameters to assess the promoters’ credential.  The parameters long-term commitment to stay in the market, their ability to bring in new techniques in insurance underwriting and administration are some of the parameters, which are assessed in the first phase.  Subsequent to this preliminary assessment, the IRDA conducts as in depth assessment of the business plans submitted by the promoter.
  15. 15.  The IRDA is the sole authority for awarding licenses, there     is no restriction in the number of license . There is no restriction in the number of licenses it can issue, but licenses for life and non-life business are to be issued separately. Licenses are issued only on a national basic. the new players should commence business within 15 to 18 months of getting he license. The new applicant has to pay a registration fee of 50,000. At the time of renewal of registration every year, a fee of 0.20 percent of one percent of the gross premium or 50,000 whichever is higher, is levied on the insurers carrying out insurance business in India.
  16. 16.  The IRDA ha prescribed a file and use procedure, according to which copies of standard terms, conditions, and literature.  In case of tariff products, the tariff advisory committee is required to file product and pricing details with the IRDA like any other insurance company.  All insurance intermediaries, such as agents and corporate agents, have to undergo compulsory training prior to their obtaining a license.  The IRDA also specified the minimum educational qualifications for these intermediaries.
  17. 17.  It conducts examination and then issues licenses to     these agents. It believes that well trained and informed intermediaries can service the consumers better. The IRDA insured or renewed, 1,18,154 agents license by the end of march 2000. The licensing of insurance agents regulations have specified the qualifications for an insurance agent: Hundred hours relicensing training, followed by an examination.
  18. 18.  In addition, for new agents 25 hours training to keep knowledge updated has also been prescribed at the time of renewal of license.  The insurance association and life insurances and general insurance councils have been o vivid and they are responsible for setting the norms for market conduct, ethical behavior of the insurers, and breach of regulations.  Continuous training has been stipulated to enhance the efficiency of the intermediaries.
  19. 19.  New players have set up call centers which are functioning on a 24/7 basis.  The IRDA has recognized the actuarial society of India and insurance institute of India as nodal organizations responsible for insurance education.  IRDA has drafted separate bills of the society of India and the institute of surveyors and loss assessors in order to grant their statutory status.
  20. 20.  The IRDA has also entered into an MOU with the Indian Institute of Management, Bangalore, to further its objective of insurance research and education. It has set up a risk management resource center in Bangalore.  The IRDA has come out with the Insurance advertisement and disclosure regulations to ensure that the insurance companies adhere to fair trade practices and transparent disclosure norms while addressing the policy holders or the prospects.

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