INSURANCE (FIFTH UNIT)

1. INTRODUCTION
•As per insurance act 1938, government appointed controller of
insurance to properly regulate and approve terms and conditions of
various plans.
•After nationalisation of Insurance industry , the supervision and
responsibilities of the controller has been reduced.
•And then with the open up of liberlisation and globalisation, the private
companies are permitted to transact insurance business in India.
•Our government of India in April 1993, appointed the committee for
reforms in insurance sector with shri.R.N.Malhotra, former governor of
RBI.This committee submitted report in january 1994.
•As per committee recommendatons our government setup a regulatory
body known as IRDI.

2. •The recommendations of the Malhotra Committee, in 1999 the
Insurance Regulatory and Development Authority (IRDA) was
constituted to regulate and develop the insurance industry and was
incorporated in April 2000.
•The IRDAI's headquartered in Hyderabad, Telangana, where it
moved from Delhi in 2001.
IRDAACT
Insurance Regulatory and Development Authority (IRDA) Act,
1999 spells out the Mission of IRDAI as: “... 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......”

3. Insurance Advisory committee (IAC)
•Consists of not more than 25 members to represent the
interest of commerce, industry, transport, agriculture ,
consumer , surveyors , agents, intermediaries,
organisations engaged in safety and loss prevention,
research bodies and employees associations in the
insurance sector.
•As per Section 25 of IRDA Act 1999, the IAC advises
IRDA in framing of regulations

4. IRDA(THE INSURANCE REGULATORY
AND DEVELOPMENT AUTHORITY)
•The IRDA bill was passed in December 1999and became an act in April 2000
•The IRDA is a ten member body appointed by the government of India
consisting of
•Chairman
•Five whole time members
•Four part-time members

5. OBJECTIVES OF IRDA
•To take care of the policy holders interest
•To open the insurance sector for private sector
•To ensure continued financial soundness and solvency
•To regulate insurance and reinsurance companies
•To eliminate dishonesty and unhealthy competition.
•To supervise the activity of intermediaries
•To amend the insurance act 1938, the LIC Act 1956 and the General business
nationalisation Act 1972.

6. DUTIES AND POWERS OF IRDA
•To regulate, promote and ensure orderly growth of insurance business.
•To exercise all powers and functions of controller of insurance.
•To promote and regulate proportional organisations connected with
insurance business.
•To call for information from undertake inspection and conduct investigation
including audit of the insurer, intermediaries and other connected
organisations and persons.
•To control and regulate rates and terms and conditions that may be offered
by the insurers in respect of general insurance matters not so controlled by
Traiff Advisory Committee under section 64(U) of the insurance act.
•To prescribe the manner and form in which accounts may be maintained and
submitted by the insurers and intermediaries.
•To regulate margins if solvency
•To regulate investment of funds
•To adjudicate disputes between insurers and intermediaries.
•To protect the interest of policy holders in settlement of claims and terms and
conditions of policies.