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Insurance Regulatory
Insurance Regulatory & Development Authority isregulatory
and development authority underGovernment of India in order to
protect theinterests of the policyholders and to regulate,promote
and ensure orderly growth of theinsurance industry. It is basically
a ten members'team comprising of a Chairman, five full timemembers
and four part-time members, all
appointed by Government of India. Thisorganization came into
being in 1999 after the billof IRDA was passed in the Indian
parliament.
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Powers and Functions of IRDA
It issues the applicants in insurance arena, a certificate of
registration as well as renewal,modification, withdrawal,
suspension or cancellation of such registrations.It protects the
interests of the policy holders in any insurance company in the
matters related to theassignment of policy, nomination by policy
holders, insurable interest, and resolution of insuranceclaim,
submission value of policy and other terms and proposals in the
contract.It also specifies obligatory credentials, code of conduct
and practical instructions for mediator aswell as the insurance
company. Apart from this, it also defines the code of conduct for
thesurveyors and loss assessors involved with the insurance
business.One of the major functions of IRDA includes endorsing
competence in the insurance business.Apart from this, upholding and
regulating professional organizations in insurance and
re-insurancebusiness is also a major duty of IRDA.IRDA is also
entitled to for asking information, undertaking inspection and
investigating the audit of the insurers, mediators, insurance
intermediaries and other organizations related to the
insurancesector.It is also concerned with the regulation of the
rates, profits, provisions and conditions that may be
offered by insurers in respect of general insurance business if
it is not controlled or regulated by theTariff Advisory
Committee.
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Con .
It is also entitled to supervise the functioning of the Tariff
AdvisoryCommittee.IRDA specifies the terms and pattern in which
books of accounts areto be maintained and statement of accounts
shall be provided byinsurers and other insurance mediators.It also
regulates investment of funds by insurance companies aswell as the
maintenance of margin of solvency.It is also empowered to be
involved in the arbitration of disagreements between insurers and
intermediaries or insuranceintermediaries.
It is meant to specify the proportion of premium income of
theinsurer to finance policies.IRDA also specifies the share of
life insurance business and generalinsurance business to be
accepted by the insurer in the rural orsocial sector.
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Impact Of IRDA On Indian InsuranceSector
The creation of IRDA has brought revolutionarychanges in the
Insurance sector. In last 10 yearsof its establishment the
insurance sector has seentremendous growth. When IRDA came into
being;only players in the insurance industry were LifeInsurance
Corporation of India (LIC) and GeneralInsurance Corporation of
India (GIC), however inlast decade 23 new players have emerged in
the
filed of insurance. The IRDA also successfullydeals with any
discrepancy in the insurancesector.
