The Insurance Regulatory and Development Authority of India (IRDAI) is an autonomous body established by the Indian government in 1999. It is a statutory body responsible for regulating and developing the insurance sector in India.
IRDAI has played an instrumental role in bringing a wide range of insurance products to the general public, ensuring that the Indian insurance market is conducive to fair competition and that the policyholders are given a fair deal.
The authority's primary objectives are to protect the interests of policyholders, promote the growth of the insurance sector, and ensure the availability of insurance products at competitive prices.
What are the major functions of IRDAI?
The IRDAI has been set up to protect the interests of policyholders and to promote and ensure the orderly growth of the insurance industry. Let us discuss its functions one by one.
Licensing and registration
The IRDAI regulates the licensing and registration of insurance companies and insurance intermediaries. To obtain an insurance licence, applicants must meet certain criteria, including having a minimum net worth of Rs.100 crores, having adequate resources and infrastructure, and having a sound business plan. The IRDAI also regulates the registration of insurance intermediaries such as agents, brokers and surveyors.
Supervision of insurance companies
The IRDAI monitors and supervises the activities of insurers and ensures that they comply with the act and regulations made thereunder. It also reviews their financial performance, investment and reinsurance activities, and other matters related to their operations.
Protection of policyholders
The IRDAI ensures that the interests of policyholders are protected. It has issued guidelines on the sale of insurance products, which include the disclosure of product features, the provision of a free-look period, and the provision of clear and concise information to policyholders.
Solvency requirements
The IRDAI has issued guidelines on solvency requirements for insurers. These requirements include the maintenance of a minimum net worth, the maintenance of a certain level of assets, and the filing of regular returns.
Insurance education and training
The IRDAI has launched various initiatives to promote insurance education and training. It has established the Insurance Institute of India, which provides certification courses and training programmes for insurance professionals.
Consumer grievance redressal
IRDAI has set up the insurance ombudsman scheme to provide a mechanism for the consumer grievance redressal. The ombudsman can resolve disputes between insurers and policyholders, including disputes relating to claims and policy servicing.
IRDAI plays an important role in regulating and developing the insurance sector in India. Its functions are designed to ensure that the interests of policyholders are safeguarded and that the insurance market is competitive and fair.
