Insurance Regulatory and Development Authority (IRDA) is an autonomous apex statutory body which regulates and develops the insurance industry in India. It was constituted with the enactment of Insurance Regulatory and Development Authority (IRDA) Act, 1999 and duly passed by the Government of India.
IRDA was constituted as an autonomous body to regulate and develop insurance industry as per the recommendations of Malhotra committee Report in 1999.
The mission of the IRDA as stated in IRDA Act 1999 is as follows:
- To protect the interest of and secure fair treatment to policyholders;
- To bring about speedy and orderly growth of the insurance industry (including annuity and superannuation payments), for the benefit of the common man, and to provide long term funds for accelerating growth of the economy;
- To set, promote, monitor and enforce high standards of integrity, financial soundness, fair dealing and competence of those it regulates;
- To ensure speedy settlement of genuine claims, to prevent insurance frauds and other malpractices and put in place effective grievance redressal machinery;
- To promote fairness, transparency and orderly conduct in financial markets dealing with insurance and build a reliable management information system to enforce high standards of financial soundness amongst market players;
- To take action where such standards are inadequate or ineffectively enforced;
- To bring about optimum amount of self-regulation in the day-to-day working of the industry consistent with the requirements of prudential regulation.
Duties, Powers and Functions of IRDA
Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA. Subject to the provisions of this Act and any other law for the time being in force, the Authority shall have the duty to regulate, promote and ensure orderly growth of the insurance business and re-insurance business.
The powers and functions of the Authority shall include:
- Issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration.
- Protection of the interests of the policyholders in matters concerning assigning of policy, nomination by policyholders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance.
- Specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents.
- Specifying the code of conduct for surveyors and loss assessors.
- Promoting efficiency in the conduct of insurance business.
- Promoting and regulating professional organizations connected with the insurance and re-insurance business.
- Levying fees and other charges for carrying out the purposes of this Act.
- Calling for information from, undertaking inspection of, conducting inquiries and investigations including an audit of the insurers, intermediaries, insurance intermediaries and other organizations connected with the insurance business.
- 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.
- Specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries.
- Regulating investment of funds by insurance companies.
- Regulating maintenance of margin of solvency.
- Adjudication of disputes between insurers and intermediaries or insurance intermediaries.
- Supervising the functioning of the Tariff Advisory Committee.
- Specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organizations referred to in clause (2.6)
- Specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector.
- Exercising such other powers as may be prescribed.
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