The document provides an overview of insurance regulations in India set by the Insurance Regulatory and Development Authority (IRDA). It discusses IRDA's history, mission, powers and duties in regulating the insurance industry. It also outlines various IRDA regulations for life insurance companies regarding capital requirements, investments, rural policies, agent commissions and more. The document concludes with sections on claims processing, types of claims, claim documentation and preventing insurance fraud.

1. Presented By
• Manpreet
• Sat veer
• Manveer
• Sat veer
• Rupinder
• Rajni
• Gur saman

2. ACKNOWLEDGEMENT
 We wish to express our profound gratitude to Baba Farid of
College for giving us as an opportunity to be part of their
esteem organization and enhance our knowledge by granting
permission to do our project on “RULES AND
REGULATIONS OF IRDA” under their guidance.
 We would like to thank Ms. Abhiruchi for giving us the
opportunity to work on a insurance. She gave us a good chance
to learn a lot of things while doing this project. We are grateful
for this opportunity.
 I would also like to thank my group members too for helping
me in this project and shared their views related to our project.

3. TODAY’S AGENDA
 Insurance
 IrDA
 History of IrDA
 Mission of IrDA
 Duties and powers of IrDA
 IrDA regulations
 Claim
 Types of claim
 Settlement of claim

4. WHAT IS INSURANCE?
 In simple words it means it’s a contract
between two parties first party is insurer
(insurance company) and other party is insured
(policy holder).
 Insurance is a form of risk management
primarily used to hedge against the risk of a
contingent, uncertain loss. Insurance is
defined as the equitable transfer of the risk of
a loss, from one entity to another, in exchange
for payment.
 An insurer is a company selling the insurance;
the insured, or policyholder, is the person or
entity buying the insurance policy. The amount
to be charged for a certain amount of
insurance coverage is called the premium.

5. FUNTIONS OF INSURANCE
 Insurance provides certainty
 Insurance provides protection
 Risk-Sharing
 Prevention of Loss
 Provides Capital
 Improves Efficiency
 Helps in Economic Progress

6. INTRODUCTION OF IRDA
 The IRDA (Insurance Regulatory and Development
Authority) is the national regulatory body for Insurance
industry. It regulates and develops the insurance
industry in India.

7.  Conti……
Mr. J S. Hari
Narayana
CHAIRMAN,
IRDA
• 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.
• The agency operates its headquarters at Hyderabad,
Andhra Pradesh where it shifted from Delhi in 2001.

8. HISTORY OF IRDA
 The IRDA Act, 1999 was passed as per the major
recommendation of the Malhotra Committee report (1994)
which recommended establishment of an independent
regulatory authority for insurance sector in India. Later, it was
incorporated as a statutory body in April, 2000. The IRDAAct,
1999 also allows private players to enter the insurance sector
in India besides a maximum foreign equity of 26 per cent in a
private insurance company having operations in India. It
serves as an Authority to protect the interests of holders of
insurance policies, to regulate, promote and ensure orderly
growth of the insurance industry and for matters connected
therewith.

9. MI S S I O N O F I R D A
Conduction of insurance
businesses across India in an
ethical manner
To promote, regulate and ensure
orderly growth of the insurance
industry and for matters
connected therewith or incidental
thereto
To protect the insurance industry
and made rules and regulations

10. DUTIES OF IRDA
 Control
 Protect
 Regulate
 Direction
 Monitoring
 Coordinate

11. POWERS OF IRDA
 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
 promoting efficiency in the conduct of insurance business;
 promoting and regulating professional organizations
connected with the insurance and re-insurance business
 supervising the functioning of the Tariff Advisory
Committee

12. CONTI.....
 specifying the percentage of life insurance business and
general insurance business to be undertaken by the insurer
in the rural or social sector
 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)
 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

13. Insurance Regulatory and Development
Authori ty (Regi s trat ion of Indian Insurance
Companies ) Regulat ions , 2000
 Requirement as to capital - No insurer carrying on the business of life
insurance, general insurance or re-insurance in India on or after the
commencement of the Insurance Regulatory and Development Authority
Act, 1999, shall be registered unless he has, -
 1. A paid-up equity capital of rupees one hundred crores, in case of a
person carrying on the business of life insurance or general insurance

14. 2. A paid-up equity capital of rupees two hundred crores, in
case of a person carrying on exclusively the business as a
re-insurer :
 Joint venture: 26% foreign, 74% Indian
 Manner of payment of fee for registration.- The fee of
rupees fifty thousand for each class of business for
registration shall be remitted by a bank draft issued by
any scheduled bank in favour of the Insurance Regulatory
and Development Authority payable at New Delhi

15. THE RULES & REGULATIONS
FOR THE LIFE INSURANCE
INDUSTRY IN INDIA
 Coverage
 Life insurance companies are required to allocate, over the first five
years of operation, 7 to 16 percent of their written policies in the
rural sector, which is defined as an area with a population less than
5,000 and where more than 25 percent of males work in agriculture.
 Riders
 Riders, which are additions to insurance policies, should be clear
with respect to benefits. In the case of term or group products, the
premium related to health or critical illness riders shall not exceed
100 percent of the basic premium.

16. CONTI….
 Investments Life insurance companies are required to allocate
their investment assets in the following manner: Government
securities, at least 25 percent; government securities and
other approved securities, at least 50%; approved investments
should not exceed 35 percent; and investments in mortgage
backed securities should be at least 15 percent.
 Composite Insurance Current IRDA regulations don't favor
composite insurance, which is the combination of life and non-life
insurance products sold through the same company. Recognizing the
uniqueness of micro-insurance in rural areas, the IRDA relaxed its
policy to enable "tie-up" relationships between life and non-life
insurance companies to offer consumers an integrated product.
Insurers were also permitted to issue policies with a maximum cover
of Rs 50,000 for general and life insurance under these new IRDA
regulations

17. CONTI….
 Agent Commissions A wide range of life insurance products is
available as of 2011. Yet existing barriers, such as a cumbersome
claims-settlement process and a commission structure that favors
new business over existing ones, limit their penetration in rural
areas. The IRDA Micro Insurance Guidelines of 2005 sought to
overcome this dilemma with a more equitable commission program
that encouraged agents to service existing policyholders. Another
IRDA breakthrough embraced NGOs, SHGs, MFIs and other
organizations into the distribution channel with appropriate
compensation.
 IRDA Training Requirements:- In August 2004, the IRDA published a
document entitled the "Concept Paper on Need for Regulations on
Micro-Insurance in India." This paper discussed product design and
collaboration of intermediaries with life and general insurance
providers. However, it also raised quality-control concerns with its
recommendation to reduce the training requirements of NGO life-insurance
agents from 50 hours to 25 hours.

18. CONTI…
 IRDA Policy Quotas:- In 2002, the passage of a central regulation, referred
to as "The Obligation of Insurers to Rural Social Sectors," imposed a quota
system on private insurers entering the Indian market after it was
liberalized. The quota applied to rural areas with a population density of
less than 400 people per square kilometer. It stipulated that life insurance
policies amount to 5 percent of the total number sold in the first year and
increased to 16 percent by year 5. The quota system placed considerable
pressure on insurers to meet their targets to avoid IRDA fines. As a result,
a few insurers have developed innovative products and delivery channels
while others have not been as successful.
 ULIP Regulation:- Under IRDA guidelines, traditional plans must invest at
least 85 percent of their funds in low-yielding debt instruments. The
popularity of ULIPs lies in their potential for higher returns and flexible
investment choices. The IRDA, and market watchdog, SEBI, recently vied
to become the official ULIP-regulating body in India. The Indian
government ended the rivalry in 2010 with an ordinance declaring that
ULIPs would be regulated by the IRDA.

19. FOR LIFE INSURANCE
COMPANIES
 Capital Reserves All life insurance companies must
have capital reserves. A capital reserve is a financial
requirement that insurance companies keep cash
reserves in place to pay claims as they arise. Each
state's capital reserve requirements vary and some
states use mathematical as well as non-mathematical
formulas and rules to determine how
reserve requirements should be met.
 Guarantee Corporation A guarantee corporation in
every state guarantees a minimum benefit amount
that is payable to every policy holder in the event
that an insurer cannot pay claims and the
reinsurance system fails. The guarantee amount
varies by state, but is typically between $300,000
and $500,000 per insured individual.

20. CLAIM
 A claim is a demand that the insurer redeem
the promise made in the contract.
Maturity
claims
Rider
benefits
Death
claims
TYPES OF CLAIMS

21. MATURITY CLAIM
 A maturity claim is the sum insured, plus any
accumulated bonuses. It is paid to insurer at the
end/maturity of the plan.
 A terminal or final additional bonus may be paid.

22. MODES OF PAYMENT OF
CLAIM TO INSURED PERSON
 Survival benefit payments
 Reduced sum insured (paid-up value)
 Discounted claims
 Commutation of installments

23. DEATH CLAIM
 A death claim is
where the life
insurance company
pays the sum
insured to the
nominee/beneficiary
on the death of the
insured during the
term of the plan.

24. RIDER BENEFITS
 A payment under a rider is made by the insurance
company on the occurrence of a specified event
according to the rider terms and conditions.
 For example
 Accidental death benefit
 Critical illness
 Hospital care

25. VALID CLAIM
 Was the insurance policy in force when the event occurred?
 Have the original policy document, a completed claim form
and all the other required documents been submitted?
 Has the policy holder performed their part with regards to
age admission and the disclosure of the material facts
relevant to the policy?
 Did the claim demand come from the right person, i.e. the
person who is entitled to receive the claim amount?
 Have all the other formalities that are required for a valid
claim to be valid been fulfilled?

26. WHY CLAIM MAY BE INVALID
The policy is not in force
• If the policy was not in force when event
occurred, the insurance company will reject the
claim
Excluded conditions apply
• If the death is caused by something excluded from
the cover under the policy, the claim will not be met
The claim is fraudulent
•If during the investigations, the company finds out that
a material fact was deliberately suppressed by insured
then it will reject claim

27. DUTIES AFTER DEATH AND
DOCUMENTARY EVIDENCE
 After the death of the life insured, is for insurance
company to be advised that the death has taken place.
Death notification may be sent by nominee, relative or
insurance agent.
 Documents required…….
 The policy document
 Proof of age( if age is not already admitted)
 Death certificate
 Legal evidence of title, if the policy is not assigned or
nominated.

28. EARLY DEATH CLAIMS
 If the claim occurs with in 3 years from the date of
risk, insurance company classify it as an early
death.
 A statement from the last medical attendant to attend the
deceased before death, giving details of their last illness and
the treatment given
 A statement from the hospital, if the deceased had been
admitted to hospital
 A statement from the person who attended the last rites and
had seen the dead body
 A statement from the employer showing details of leave
taken.

29. CONTINUE….
 If the life insured had an unnatural death,
such as an accident, by suicide or by unknown
cause.
Then additional documents required…
 Police first information report (FIR)
 Forensic report
 Post mortem report

30. IRDA GUIDELINES FOR CLAIM
SETTLEMENT
 A life insurance policy shall state the primary
documents which are normally required to be
submitted by a claimant in support of a claim.
 A life insurance company, upon receiving claim,
shall process the claim without delay.
 A claim under a life policy shall be paid or be
disputed giving all relevant reasons, with in 30
days from the date of receipt of all relevant
papers and clarification required.
 In the case of fraud the case is forward to court

31. PROCESS OF MATURITY
CLAIM
The original policy has been handed in
The identify of the policyholder has been proved
The discharge form has been duly completed
The correct age was admitted & supporting age proof document
supplied
All the premiums have been paid and are up to date
There are no assignments

32. PROCESS OF DEATH CLAIM

33. FRAUDULENT CLAIMS
 Insurance fraud is a deliberate attempt to use insurance
for unjustified financial gain. Insurance fraud include
misrepresentation of facts.
 In the case of fraud the case is forward to court

34. SUGGESTIONS
 Every insured person has to give the right and
proper information to the insurance company while
taking insurance.
 Every insurance company has to give the proper
information to their clients about the terns and
condition of the policy.
 IrDA has to search the fraud parties.
 Consumer forum has to taken the strict action
against fraud.

35. THANK YOU