Rules and regulations for the functioning of the insurance industry are set by the IRDA. Advisories are issued to insurance companies regularly by the IRDAI or the IRDA in the case of any changes to the rules and regulations. The insurance industry is guided by the regulator guides to promote the efficiency of conduct of insurance business all the while controlling the rates and other such changes that are related to insurance.
Until the year 2000, the regulator for the insurance industry was the government of India itself. However, the IRDA was established in 2000 in order to institute a stand-alone apex body, following the recommendation of the Malhotra Committee report in 1999. Through invites, registrations were starting to be accepted by the IRDA in August 2000, and they allowed companies that were from other countries to invest 26% in the market. Under Section 114A of the Insurance act, the IRDA has outlined several riles and regulations. Registration of insurance companies for operating in the country, protecting policyholder’s interests and everything in between are the regulations. There are 24 life insurance companies, and 31 general insurance companies who are registered with the IRDA.
Enforcing the provisions under the Insurance act is the main objective of the Insurance Regulatory and Development authority of India. IRDA’s mission statement is –
- To protect he fair treatment and interest of the policyholder.
- To ensure the financial soundness of the industry by regulating the insurance industry.
- To ensure that the industry operates without any ambiguity by regularly framing regulations.
We can date the insurance industry in India back to the early 1800’s, and it has only grown over the years with more focus and transparency in protecting the policyholder’s interests. An important role in emphasizing the importance of policyholders and their interests is played by the IRDA while framing the rules and regulations. Give below are the important roles of the IRDA –
- Protecting the interests of the policyholder.
- For the benefit of the common man, helping to speed up the growth of the industry in an orderly fashion.
- Promoting, enforcing, monitoring, and setting high standards of fail dealing, integrity, financial soundness, and competence of the insurance providers.
- Ensuring claims that are genuine be settled efficiently and fast.
- Preventing fraud and malpractice, they do this by setting up a gradience redress forum in order to ensure the policyholder is protected.
- Promoting fairness, transparency and systematic conduct of insurance.
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