The document provides information on the Insurance Regulatory and Development Authority of India (IRDA). It discusses that IRDA was established in 1999 by an act of Parliament to regulate and develop the insurance industry in India. IRDA aims to protect policyholders' interests and ensure the orderly growth of the insurance sector for the benefit of the public. It oversees functions like issuing certificates to insurance companies, handling complaints, promoting efficiency, and regulating investment and solvency standards. The document also outlines IRDA's duties and powers under the law.

1. INTRODUCTION
The Insurance Regulatory and Development Authority (IRDA) is a national
agency of the Government of India, based in Hyderabad. It was formed by an
act of IndianParliament known as IRDA Act 1999.The Insurance Regulatory
and Development Authority IRDA was constituted as anautonomous body to
regulate and develop the business of insurance and re-insurance inIndia. The
Authority was constituted on April 19, 2000. The Insurance Regulatory
andDevelopment Authority Act, 1999, were enacted by Parliament. IRDA was
set up in 1996 but it was formally constituted as a regulator of the insurance
industry in April 2000.Theobjectives of IRDA are policyholder protection and
healthy growth of the insurancemarket.IRDA has constituted the Insurance
Advisory Committee and in consultation with thecommittee has brought out
seventeen regulations. A leading consumer activist has also been inducted into
the Insurance Advisory Committee. In addition, representatives of consumers,
industry, insurance agents, women‟s organizations, and other interest groupsare
a part of this committee.Insurance Regulatory and Development Authority
(IRDA, which was constituted by anact of parliament) specify the composition
of Authority.The Authority is a ten member team consisting of:
(a) A Chairman
(b) Five whole-time members;
(c) Four part-time members,all members are appointed by the Government of
India.

2. NEEDFORTHEESTABLISHMENT:
The law of India has the following expectations from IRDA
i. To protect the interest of and secure fair treatment to policyholders.
ii. To bring about speedy and orderly growth of the insurance industry
(including annuity and superannuation payments), for the benefit of the
common man, and to provide long term funds for accelerating growth of
the economy.
iii. To set, promote, monitor and enforce high standards of integrity,
financial soundness, fair dealing and competence of those it regulates.
iv. To ensure that insurance customers receive precise, clear and correct
information about products and services and make them aware of their
responsibilities and duties in this regard.
v. To ensure speedy settlement of genuine claims, to prevent insurance
frauds and other malpractices and put in place effective grievance
redressal machinery.
vi. 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.
vii. To take action where such standards are inadequate or ineffectively
enforced.
viii. To bring about optimum amount of self-regulation in day to day working
of the industry consistent with the requirements of prudential regulation.

3. HISTORY OF INDIAN INSURANCE
In India, insurance has a deep-rooted history. It finds mention in the writings of
Manu ( Manusmrithi ), Yagnavalkya (Dharmasastra ) and Kautilya ( Arthasastra ).
The writings talk in terms of pooling of resources that could be re-distributed in
times of calamities such as fire, floods, epidemics and famine. This was probably a
pre-cursor to modern day insurance. Ancient Indian history has preserved the
earliest traces of insurance in the form of marine trade loans and carriers’
contracts. Insurance in India has evolved over time heavily drawing from other
countries, England in particular.
1818 saw the advent of life insurance business in India with the establishment
of the Oriental Life Insurance Company in Calcutta. This Company however failed
in 1834. In 1829, the Madras Equitable had begun transacting life insurance
business in the Madras Presidency. 1870 saw the enactment of the British
Insurance Act and in the last three decades of the nineteenth century, the Bombay
Mutual (1871), Oriental (1874) and Empire of India (1897) were started in the
Bombay Residency. This era, however, was dominated by foreign insurance offices
which did good business in India, namely Albert Life Assurance, Royal Insurance,
Liverpool and London Globe Insurance and the Indian offices were up for hard
competition from the foreign companies.
In 1914, the Government of India started publishing returns of Insurance
Companies in India. The Indian Life Assurance Companies Act, 1912 was the first
statutory measure to regulate life business. In 1928, the Indian Insurance
Companies Act was enacted to enable the Government to collect statistical
information about both life and non-life business transacted in India by Indian and
foreign insurers including provident insurance societies. In 1938, with a view to
protecting the interest of the Insurance public, the earlier legislation was
consolidated and amended by the Insurance Act, 1938 with comprehensive
provisions for effective control over the activities of insurers.
An Ordinance was issued on 19th
January, 1956 nationalising the Life
Insurance sector and Life Insurance Corporation came into existence in the same
year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75 provident
societies—245 Indian and foreign insurers in all. The LIC had monopoly till the late
90s when the Insurance sector was reopened to the private sector.
The history of general insurance dates back to the Industrial Revolution in the
west and the consequent growth of sea-faring trade and commerce in the
17th
century. It came to India as a legacy of British occupation. General Insurance
in India has its roots in the establishment of Triton Insurance Company Ltd., in the
year 1850 in Calcutta by the British. In 1907, the Indian Mercantile Insurance Ltd,
was set up. This was the first company to transact all classes of general insurance
business.
1957 saw the formation of the General Insurance Council, a wing of the Insurance
Associaton of India. The General Insurance Council framed a code of conduct for
ensuring fair conduct and sound business practices.

4. In 1968, the Insurance Act was amended to regulate investments and set
minimum solvency margins. The Tariff Advisory Committee was also set up then.
In 1972 with the passing of the General Insurance Business (Nationalisation)
Act, general insurance business was nationalized with effect from 1st
January,
1973. 107 insurers were amalgamated and grouped into four companies, namely
National Insurance Company Ltd., the New India Assurance Company Ltd., the
Oriental Insurance Company Ltd and the United India Insurance Company Ltd. The
General Insurance Corporation of India was incorporated as a company in 1971
and it commence business on January 1sst 1973.
This millennium has seen insurance come a full circle in a journey extending to
nearly 200 years. The process of re-opening of the sector had begun in the early
1990s and the last decade and more has seen it been opened up substantially. In
1993, the Government set up a committee under the chairmanship of RN Malhotra,
to propose recommendations for reforms in the insurance sector.The objective was
to complement the reforms initiated in the financial sector. The committee
submitted its report in 1994 wherein , among other things, it recommended that the
private sector be permitted to enter the insurance industry. They stated that foreign
companies be allowed to enter by floating Indian companies, preferably a joint
venture with Indian partners.
Following the recommendations of the Malhotra Committee report, in 1999, the
Insurance Regulatory and Development Authority (IRDA) was constituted as an
autonomous body to regulate and develop the insurance industry. The IRDA was
incorporated as a statutory body in April, 2000. The key objectives of the IRDA
include promotion of competition so as to enhance customer satisfaction through
increased consumer choice and lower premiums, while ensuring the financial
security of the insurance market.
The IRDA opened up the market in August 2000 with the invitation for
application for registrations. Foreign companies were allowed ownership of up to
26%. The Authority has the power to frame regulations under Section 114A of the
Insurance Act, 1938 and has from 2000 onwards framed various regulations
ranging from registration of companies for carrying on insurance business to
protection of policyholders’ interests.
Today there are 27 general insurance companies including the ECGC and
Agriculture Insurance Corporation of India and 24 life insurance companies
operating in the country.
The insurance sector is a colossal one and is growing at a speedy rate of 15-
20%. Together with banking services, insurance services add about 7% to the
country’s GDP. A well-developed and evolved insurance sector is a boon for
economic development as it provides long- term funds for infrastructure
development at the same time strengthening the risk taking ability of the country.

5. AIMs and Objectives
The InsuranceRegulatory and Development Authority aims at reducing costs for
policy holders, raise returns, and increases the cover after death.
The objective of creating an insurance repository is to provide policyholders a
facility to keep insurancepolicies in electronic form and to undertake changes,
modifications and revisions in the insurance policywith speed and accuracy in
order to bring about efficiency, transparency and cost reduction in theissuance
andmaintenance ofinsurance policies.The objectives mainly include promotion
of competition so as to enhance customer satisfaction through increased
consumer choice and lower premiums, while ensuring the financial security of
the insurance market.
The following are the objectives of the Insurance Regulatory and Development
Authority:
I. To protect the interest of and secure fair treatment to policyholders.
II. To bring about speedy and orderly growth of the insurance industry
(including annuity and superannuation payments), for the benefit of the
common man, and to provide long term funds for accelerating growth of
the economy.
III. To set, promote, monitor and enforce high standards of integrity,
financial soundness, fair dealing and competence of those it regulates.
IV. To ensure that insurance customers receive precise, clear and
correct informationabout products and services and make them
aware of their responsibilities andduties in this regard.
V. To ensure speedy settlement of genuine claims, to prevent insurance
frauds and other malpractices and put in place effective grievance
redressal machinery.

6. VI. 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.
VII. To take action where such standards are inadequate or ineffectively
enforced.
VIII. To bring about optimum amount of self-regulation in day-to-day working
of the industry consistent with the requirements of prudential
regulation.

7. Duties,Powers and Functions of IRDA
Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of
IRDA:
1. Subject to the provisions of this 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 re-insurance business.
2. Without prejudice to the generality of the provisions contained in sub-section
(1), the powers and functions of the Authority shall include,
 issue to the applicant a certificate of registration, renew, modify,
withdraw, suspend or cancel such registration;
 protection of the interests 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;
 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 re-insurance business;
 levying fees and other charges for carrying out the purposes of this
Act;
 calling for information from, undertaking inspection of, conducting
enquiries and investigations including audit of the insurers,
intermediaries, insurance intermediaries and other organizations
connected with the insurance business;
 control and regulation of the rates, advantages, terms and conditions
that may be offered by insurers in respect of general insurance
business not so controlled and regulated by the Tariff Advisory
Committee under section 64U of the Insurance Act, 1938 (4 of 1938);
 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;
 regulating investment of funds by insurance companies;
 regulating maintenance of margin of solvency;

8.  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 organisations
referred to in clause (f);
 specifying the percentage of life insurance business and general
insurancebusiness to be undertaken by the insurer in the rural or social
sector; and exercising such other powers as may be prescribed from
time to time.
Regularity provisions under insurance Act, 1938.
Role of the Insurance Regulatory and Development Authority (IRDA)

9. The Insurance Regulatory and Development Authority (IRDA) were constituted
to regulate and develop insurance business in India. As a key part of its role, it
is responsible to protect the rights of policyholders. In order to create awareness
about IRDA, its role, duties and responsibilities are stated here under:
 IRDA provides a certificate of registration to a life insurance company
 IRDA is responsible for the renewal, modification, withdrawal,
suspension or cancellation of this certificate of registration.
 IRDA frames regulations on protection of policyholders' interests.
 It offers policyholders the right to voice their complaints against insurers
or insurance companies.
 The IRDA has set up the grievance redressal cell to take up the
complaints of the policyholder.
 It specifies the requisite qualifications, code of conduct and practical
training for intermediaries or insurance intermediaries and agents.
 It specifies the code of conduct for surveyors and loss assessors;
 It promotes efficiency in the conduct of insurance businesses;
 It promotes and regulates activities of professional organizations
connected with life insurance;
 It levies fees and other charges to carry out the purposes of the IRDA
Act;
 It can call for information from, undertake the inspection of, conduct
enquiries and investigations including the auditing of insurers,
intermediaries, insurance intermediaries and other organizations
connected with the business of life insurance;
 It specifies the form and manner in which books of account should be
maintained and statements of accounts should be rendered by insurers and
other insurance intermediaries;
 It regulates the investment of funds by insurance companies;
 It regulates the maintenance of margins of solvency;
 It adjudicates disputes between insurers and intermediaries or insurance
intermediaries;
 It specifies the percentage of premium income of the insurer to finance
schemes for the promotion and regulation of certain specified
professional organizations;
 It specifies the percentage of life insurance business to be undertaken by
an insurer in the rural or social sector; and
 It exercises any other powers as may be prescribe
PRODUcts& Services offered

10. The main Aim of IRDA is„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.‟
The IRDA does not offer any products on its own but promotes and regulates
the companies which do offer such as ICICI Life Prudential, SBI, LIC, GIC,
Bharti Axa Life Insurance,etc.
However there are many services the IRDA offers. One may say that IRDA is
like the RBI of insurance. The services offered are as follows:
o grant of registration, licences and renewals to regulated entities such
as insurance companies, TPAs, brokers, agents, insurance repositories,
web aggregators, referral entities and surveyors.
o The Integrated Grievance Management System(IGMS) facilitates
online registration of policyholders‟ complaints and helps track their
status.
o Life Insurance Council and General Insurance Council are a forum
that connects the various stakeholders of the sector. It develops and
coordinates all discussions between the Government, Regulatory
Board(IRDA) and the Public.
Ombudsman:
The institution of Insurance Ombudsman was created by a Government of India
Notification dated 11th November, 1998 with the purpose of quick disposal of
the grievances of the insured customers and to mitigate their problems involved
in redressal of those grievances. This institution is of great importance and
relevance for the protection of interests of policy holders and also in building
their confidence in the system. The institution has helped to generate and
sustain the faith and confidence amongst the consumers and insurers.
Appointment of Insurance Ombudsman
The governing body of insurance council issues orders of appointment of the
insurance Ombudsman on the recommendations of the committee comprising of
Chairman, IRDA, Chairman, LIC, Chairman, GIC and a representative of the
Central Government. Insurance council comprises of members of the Life
Insurance council and general insurance council formed under Section 40 C of
the Insurance Act, 1938. The governing body of insurance council consists of
representatives of insurance companies.

11. Power of Ombudsman
Insurance Ombudsman has two types of functions to perform (1) conciliation,
(2) Award making. The insurance Ombudsman is empowered to receive and
consider complaints in respect of personal lines of insurance from any person
who has any grievance against an insurer. The complaint may relate to any
grievance against the insurer i.e. (a) any partial or total repudiation of claims by
the insurance companies, (b) dispute with regard to premium paid or payable in
terms of the policy, (c) dispute on the legal construction of the policy wordings
in case such dispute relates to claims; (d) delay in settlement of claims and (e)
non-issuance of any insurance document to customers after receipt of premium.
Ombudsman's powers are restricted to insurance contracts of value not
exceeding Rs. 20 lakhs. The insurance companies are required to honour the
awards passed by an Insurance Ombudsman within three months.
Public awareness about the role of the institution (IRDA)
Insurance Regulatory and Development Authority (IRDA) is
an autonomous apex statutory body which regulates and develops the

12. insurance industry in India. It was constituted by a Parliament of India act
called Insurance Regulatory and Development Authority Act, 1999 and duly
passed by the Government of India.
Its mission is 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.
But not many people in our country are aware of the institution and its roles, so
the institution itself has taken many initiatives to make the public aware about
their roles and the importance.
Some of them are:
BimaBemisaal
 'BimaBemisaal' is the brand name for IRDA's insurance awareness
campaign.
 It is a consumer education initiative and has the tagline "Promoting
Insurance. Protecting Insured"
 BimaBemisaal educates policyholders about their rights and obligations
and informs them about the complaints resolution methods available to
them. It also creates awareness about insurance among the general public.
 The BimaBemisaal campaign uses various media like print, radio and
television. This website is also part of the BimaBemisaal initiative.
JagoGrahakJago
 IRDA has participated in the “JAGO GRAHAK JAGO” programme of
Ministry of Consumer Affairs, Food and Public Distribution, Government
of India, which aims to educate consumers.

13.  As part of this initiative, print advertisements for consumer information
and education about initiatives like Insurance Ombudsman channel for
dispute resolution have been published and also telecast.
IRDA annual seminars
2013 (taken in this case)
 IRDA conducts a series of Annual Seminars on Policyholder Protection.
As a part of this series, the 4th Seminar on "Policyholder Protection and
Welfare" was held in Mumbai on 27th November, 2013.
 The seminar was inaugurated by Shri T.S. Vijayan, Chairman, Insurance
Regulatory and Development Authority.
 He launched the following during the seminar:
a. Consumer Affairs Department's Annual Booklet 2012-13
b. Handbook on Surveyors and Loss Assessors
c. Documentary Film on IRDA Initiatives
d. Animation Films of Comic Book Series - Volume -3
e. Mobile version of Consumer Education Website
f. Indian Non-Life Insurance Industry Year Book 2012-13 by General
Insurance Council and
g. A Report on Spread of Life Insurance Agents in India of Insurance
Information Bureau.
Insurance Awareness Survey
Insurance Regulatory and Development Authority (IRDA) engaged the National
Council of Applied Economic Research (NCAER) to carry out a pan-India

14. survey to assess the levels of insurance awareness in the country. The survey
was undertaken in 29 states/union territories.
The survey shows that most of the insured are salaried, regular wage earners or
self-employed. Insured households possess a high level of education as
opposed to uninsured households which are mostly illiterate.
a. Geographic Analysis: The report contains a geographical analysis of the
parameters and it is interesting to study the patterns in various states. (this
requires more info from the survey or we can drop it in this position)
b. Purpose of insurance: A higher percentage of insured households, as
compared to uninsured households, are aware that the purpose of
insurance is to compensate for losses due to unforeseen events.
c. Source of Information: The major source of any information for both
the insured and uninsured is television. But when it comes to insurance
the major source is insurance agents.
d. Of the insured households 97% feel that insurance is relevant for them.
Even among the uninsured, 57% feel that insurance is relevant for them.
e. Relevance of Insurance: The fear of accidents and untimely death makes
them think of insurance. Among those who did not think that insurance is
relevant, the attitude is that they would rather enjoy the present than think
of securing the future. There is a general feeling that insurance simply
takes away hard-earned money.
f. Perceptions of Insurance: More than half of the insured households
think that insurance is both a savings and a protection tool.
g. Decision to take insurance: The decision is majorly influenced by
agents, friends and relatives. There are certain regional variations as to
whose influence predominates and this is brought out in the report.
h. Life and Non-life Insurance: For purposes of identifying the universe of
insured, the survey considered those who held life insurance. Among
them, it was noted that only 31% had motor insurance and 6% health
insurance.

15. IRDA Documentary Film
In order to sensitize general public about IRDA, its role and initiatives in
insurance sector regulation and development as well as policyholder protection
and welfare, a documentary film has been prepared for extensive use which has
been recently launched by IRDA. This documentary film not only disseminates
generic information about insurance but also highlights various initiatives taken
by IRDA in the field of educating customers and redressal of grievances.
Apart from these initiatives the institution has taken many other fun and
interactive measures like essay writing competition, comic strips, vernacular
comic stories, t.v commercials, jingles, radio jingles, newspaper articles and
many more to add on to increase the awareness in a large scale manner.
Recent developments and other news on irda
IRDA Expands and therefore creates awareness

16. Insurance sector regulator Irda opened a regional office at Delhi on January
24th 2014. upgrading its exsiting establishment.
The new set-up located at Parliament Street will focus on spreading consumer
awareness and handling grievances. It will also provide support for inspection
of insurance companies located in the northern region.
Irda Chairman T S Vijayan inaugurated the office that will be headed by a joint
director and have 10 other officers and employees.
"Some of the functions of Consumer Affairs Department, Inspection
Department and Surveyors Department of Irda will be handled from this office,"
Irda said in a release.
The office will also be responsible for granting/renewal/ modification of
licenses of surveyors and loss assessors.
"With the above functions at Delhi, Irda will be able to work more closely with
the policyholders and to better position the Irda to supervise the regulated
entities in the area," the release said.
One more regional office will be opened shortly in Mumbai, Irda said.
IRDA forms committee on FDI in insurance intermediaries,
TPAs
As per the existing norms, the aggregate shareholding of a foreign company
cannot exceed 26 per cent in an insurance company.
No such stipulation limits the foreign shareholding in cases of insurance
intermediaries.
However, the Insurance Regulatory and Development Authority (IRDA),
keeping in mind that the insurance industry is in nascent stage, has limited the
holdings of a foreign company to 26 per cent in the case of insurance brokers
and TPAs
IRDA said that it was receiving references from various stakeholders requesting
it to consider increasing the foreign shareholding in insurance brokers from the
existing 26 per cent to 100 per cent as it would not require any change in the

17. Insurance Act.
But in cases of increasing foreign shareholding in an insurance intermediary or
TPA, the Authority would need to undergo amendments in the Insurance Act.
Also, there is a long pending Insurance Bill which seeks to raise the FDI cap in
the sector to 49 per cent from existing 26 per cent.
The Insurance Bill that seeks to raise FDI in insurance sector to 49 per cent has
been pending in Rajya Sabha since 2008.
Service Tax Applicable to its companies for its services w.e.f.
1st
Jan 14: IRDA
Going by the provisions of the Finance Bill, 2012, the Insurance Regulatory and
Development Authority (IRDA) will collect service tax from January 1. The
regulator will collect the tax on several services, according to a release by IRDA
on Wednesday.
The IRDA is required to collect the tax for services such as grant of registration,
licences and renewals to regulated entities such as insurance companies, TPAs,
brokers, agents, insurance repositories, web aggregators, referral entities and
surveyors. The authority, at its meeting held on December 31, 2013, has
approved the collection of applicable service tax on the services rendered by the
IRDA.
The receivers of the above mentioned services are expected to add the service
tax component while making the remittances to the authority, the release stated.
in the insurance sector, IRDA (the insurance regulator) has prohibited service
providers such as TPAs from trading in information. The IRDA has permitted
insurers to purchase customer databases only from IRDA-licensed referral
companies.
IRDA to bring Common Service Centres to sell policies
In six months time, CSCs may come in full-fledged manner, Vijayan said

18. The Insurance Regulatory and Development Authority (IRDA) Chairman TS
Vijayan said that the regulator is bringing in Common Service Centres (CSCs)
as insurance brokers to sell policies in rural areas.
CSCs offers web-enabled e-governance services in rural areas. In six months
time, CSCs may come in full-fledged manner, Vijayan said.
Mr Vijayan was speaking at an interactive session organised by the Federation
of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI) on Friday.
Vijayan said the aim of the project is to ensure that insurance penetration goes
up in rural areas.
CSCs will be selling simple insurance products such as tractor insurance,
vehicle insurance, he said.