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The Insurance Regulatory and Development Authority is the main regulatory organization or agency that supervises the country's insurance industry. It lays down rules and regulations for the operation of the insurance industry. Its sole purpose is to protect the interests of policyholders and promote the development of the entire industry.
IRDA regularly notifies insurance companies when rules and regulations change. Regulators guide the insurance industry to improve the efficiency of insurance business operations while controlling premium rates and other insurance-related expenses.
The Indian government has been the regulator of the insurance industry until 2000. However, to establish an independent supreme institution, IRDA was established in 2000 following the recommendations of the 1999 report of the Malhotra Commission. In August 2000, IRDA began accepting applications for registration by invitation and allowed companies from other countries to invest up to 26% in the market.
IRDA describes a series of rules and regulations based on section 114A of the Insurance Act of 1938. Regulations range from registering insurance companies operating in the country to protecting the interests of policyholders. As of September 2020, 31 general insurance companies and 24 family life insurance companies have registered with IRDA.
The Indian insurance industry dates back to the early 1800s and has grown over the years, focusing on better transparency and protection of policyholder interests. IRDA composes rules and regulations and plays an important role in emphasizing the importance and interests of policyholders.
Below are some important roles performed by IRDA:
The main objective of the Insurance Regulatory and Development Authority of India is to implement the provisions of the Insurance Law. IRDA's mission statement is:
The following are the important functions of IRDA in the Indian insurance industry:
>>Also read New IRDAI Guidelines for Coronavirus Claims
The most important institution in the insurance industry, IRDA ensures that its rules and regulations will not create any ambiguity for any particular insurance company. To ensure the fairness and financial stability of the industry, IRDA's main work revolves around the interests of the policyholders. The main roles in which IRDA participates are the following:
You can say that IRDA is a regulator of the insurance industry that protects the insured's interests to benefit the industry. The Supreme Authority formulated the rules and regulations followed by IRDA as per Section 114A of the Insurance Act of 1938. According to the Insurance Act, IRDA is responsible for issuing registration certificates entrusted to new insurance companies operating in India. It also has to oversee the activities of the insurance industry to ensure the continued development of insurance companies and policyholders.
Disclaimer: The information above is for reference purpose only. Do refer to IRDA guidelines for more information.
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