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IRD A

Presented By: Sachin S. Nadkarni Hitesh Patel Raghavendra T Krutika K. Smita Patil

I NTRODUCTIO
N

The

IRDA

(Insurance

Regulatory

and

Development Authority) is the national regulatory body for Insurance industry (both Life and Non-Life Insurance Companies) under the auspices of Government of India, situated at Hyderabad.

IRDA was established by an act enacted in Indian Parliament known as IRDA Act 1999 and was amended in 2002 to incorporate some emerging requirements as well as to overcome some deficiencies in the entire process.

Mr. J S. Hari Narayana CHAIRMAN, IRDA

MISSION
Conduction of insurance businesses across India in an ethical manner

Conduct insurance businesses across India in an ethical manner

To promote, regulate and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto

B A S I C P R I N C I P L E S R E L AT I N G TO INSURANCE

i. Utmost good faith - Duty of Disclosure, Material facts, Representations, Breaches of utmost good faith, Void, voidable and unenforceable contracts, case laws and court decisions ii. Insurable Interest - Importance of insurable interest, conditions fulfilling requirements of an insurable interest, persons having insurable interest (and nature of relationship), mandatory requirements for insurance in certain types of relationship. case laws and court decisions.

C ONTINUED .

iii. Principle of Indemnity - Definition, Principles, only one indemnity for a single incident, prohibition of more than a single indemnity, case laws and court decisions iv. Subrogation & Contribution - Importance, how, when it arises and operates, case laws and court decisions v. Proximate / probable cause of loss - Doctrine of proximate cause, application of the doctrine, case laws and court decisions

Insurance Regulatory and Development Authority (Registration of Indian Insurance Companies) Regulations, 2000

Requirement as to capital - No insurer carrying on the business of life insurance, general insurance or re-insurance in India on or after the commencement of the Insurance Regulatory and Development Authority Act, 1999, shall be registered unless he has, 1. A paid-up equity capital of rupees one hundred crores, in case of a person carrying on the business of life insurance or general insurance; or

2. A paid-up equity capital of rupees two hundred crores, in case of a person carrying on exclusively the business as a re-insurer :

Joint venture: 26% foreign, 74% Indian Manner of payment of fee for registration.- The fee of rupees fifty thousand for each class of business for registration shall be remitted by a bank draft issued by any scheduled bank in favour of the Insurance Regulatory and Development Authority payable at New Delhi

I N S U R A N C E R E G U L AT I O N S ( R E G U L AT I O N S ISSUED BY IRDA)

IRDA Actuarial Report and Abstract 2000 IRDA Registration of Indian Insurance Companies 2000 IRDA Insurance Advertisement and Disclosure 2000 IRDA The IRDA (Meetings) 2000 IRDA Investments (Life and General) 2000 IRDA Statements of Accounts 2000

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IRDA The Insurance Advisory Committee (Meetings) Regulations, 2000 IRDA Assets, Liabilities, and Solvency Margin of Insurers Regulations, 2000 IRDA Obligations of Insurers to Rural Social Sectors Regulations, 2000 IRDA Licensing of Insurance Agents Regulations, 2000 IRDA Appointed Actuary 2000

S UPERVISORY
Crit. a. Contents

REGULATIONS OF

IRDA

Compliance Insurance Regulatory and Development Authority Act, 1999. The Insurance Act, 1938 and the Regulations framed there under lay down the regulatory framework for supervision Key objective is enshrined in the mission statement which is To protect policyholders interest To regulate, promote and ensure the orderly growth of insurance and reinsurance business.

Legislation or regulation clearly defines the objectives of insurance supervision. Key objectives of supervision promote the maintenance of efficient, fair, safe and stable insurance markets for the benefit and protection of policyholders. Where there are multiple objectives, Supervisor discloses and explains how each objective will be applied Supervisor gives reasons for and explains any deviations from its objectives. Correction in law/Regulation initiated where objectives are contradictory

b.

c.

Objective of the supervisor are cohesive and not mutually exclusive.

d.

There are no instances of deviations from the stated objectives. There are no contradictions in the objectives of the supervisor

e.

ICP LICENSING REGULATIONS L


ICP No. & Details Essential Criteria Corresponding Act/ Regulations Compliance Status

An insurer must be licensed before it can operate within a jurisdiction. The requirements for licensing are clear, objective and public. a. The insurance legislation: includes a definition of insurers requires licensing of insurers, and prohibits unauthorized insurance activities Defines the permissible legal forms of insurers allocates the responsibility for issuing licences Sec 2(7A) of the Insurance Act, 1938 defines an Indian insurance company. Sec 3 stipulates grant of certificate of registration by the IRDA and Sec 2C of the Act prohibits unauthorized insurance activities. Sec 2(7A) and Sec 8 defines the permissible forms of insurers namely a company formed under Companies Act, 1956 or a Cooperative Society registered under Cooperative Societies Act, 1912 or under Multi-State Cooperative Societies Act, 1984 Sec 2C of the Insurance Act and Section 14(2) of the IRDA Act, 1999 gives powers to Authority to issue certificate of registration. All these requirements are clear, objective and public. Observed

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