The Insurance Regulatory and Development Authority of India (IRDAI) is the controlling body of the Indian insurance and reinsurance industries. It is the lawful authority which regulates and promotes healthy insurance business in India. It works to protect the interest of the policyholders and ensures orderly growth. It is also entitled to ensure speedy settlement of claims while preventing fraud and abuse at the same time. The IRDAI maintain the orderly conduct in the insurance part of the financial market by bringing transparency.
The headquarters of IRDAI is situated in Hyderabad, Telangana. Previously the headquarters were in Delhi and was shifted in the year 2011. Shri T.S. Vijayan is the present chairman of IRDA.
Mission statement of IRDAI consists the following points:
- 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 the prudential regulation.
The Insurance Regulatory and Development Authority of India was formed in the year 1999. The government of India passed the Insurance Regulatory and Development Authority Act, 1999 after the recommendation of the Malhotra Committee report. The aim of forming IRDAI was to regulate and develop the insurance industry. It was associated with the goal of increasing consumer power and satisfaction and lowering the price of premiums.
Structure of the organization
According to the IRDAI act, the authority is a ten member body constituting of one chairman, 5 full-time members, and 5 part-time members. The Government of India appoints all the members of IRDA and the members.
Duties and Powers of IRDAI
As per the Section 14 of IRDAI Act, 1999 the following are the functions and authorities vested in the institution.
- Issuing Power: Issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration.
- Protecting Body: Protection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, settlement of insurance claim, surrender value of the policy and other terms and conditions of contracts of insurance.
- Training and Quality Control: Specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents. It also specifies 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. The functioning of the Tariff Advisory Committee is under the jurisdiction of the IRDAI.
- Regulatory Powers: Specifying the code of conduct for surveyors and loss assessors and promoting efficiency in the conduct of insurance business. It also regulates the professional organizations connected with the insurance and re-insurance business. IRDAI also deals with 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 (4 of 1938). The investment of funds by insurance companies and maintenance of margin of solvency is regulated by IRDAI.
- Summoning Powers: Calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organizations connected with the insurance business.
- Dispute resolution: Adjudication of disputes between insurers and intermediaries or insurance intermediaries;