Presented By:

Sai Reddy
Sravana Karthik
V.B.Rao
 INTRODUCTION OF IRDA
CONSTITUTION OF IRDA
MISSION STATEMENT OF IRDA
OBJECTIVES OF IRDA
FUNCTIONS, DUTIES AND POWERS OF
IRDA
 LAWS AND REGULATIONS
PROCEDURE OF ISSUE OR RENEWAL OF LICENSE
BY IRDA
QUALIFICATION OF THE APPLICANT
In april 1993, the government of India appointed a
committee of Reforms in insurance sector with Shri. R.N.
Malhotra, a former governor of Reserve Bank Government
of India in January 1994.In accordance with the
recommendations of the committee, the government set up
a regulatory body known as “Insurance Regulatory and
Development Authority” and enacted the Act known as
Insurance Regulatory and Development Act, 1999.
IRDA consists of:
i. A chairman
ii. Not more than 5 whole time members
iii. Not more than 4 part time members to be
appointed by central government.
MISSION STATEMENT OF IRDA

To protect the interest of and secure fair

treatment to policyholders.
To bring about speedy and orderly growth
To set, promote monitor , and enforce high
standards of integrity.
To take actions where standards are
inadequate or ineffectively enforced.
To ensure speedy settlement of insured
claims.
OBJECTIVES OF IRDA
i. Take care of the policyholders interest.
ii. Open the insurance sector for private sector.
iii. Ensure continued financial soundness and solvency.
iv. Regulate insurance and reinsurance companies.
v. Eliminate dishonesty and unhealthy competition.
vi. Supervise the activities of intermediaries.
vii. Amend the insurance act 1938 ,the Life Insurance
Corporation Act1956, and the General Business
Act1972.
FUNCTIONS, DUTIES & POWER OF IRDA

To issue certificate of registration.

To protect the interests of the policyholders.
To specify requisite qualifications code of
conduct and training for insurance
intermediaries and agents.
To specify code of conduct for Surveyors/ Loss
Assessors.
Functions Cont...

To promote efficiency in the conduct of

insurance business.
 To supervise the functioning of Tariff
Advisory Committee.
 To regulate investment of funds by the
insurance companies.
 To undertake inspection, conduct enquiries
and investigations.
Functions Cont…

 To specify the percentage of Life and

General Insurance business.
 To promote and regulate professional
organizations connected with the
insurance and reinsurance.
 To specify the form and manner for
maintenance of books of accounts.
Functions Cont…

 To prescribe the manner and form in

which accounts will be maintained
and submitted by insurers and
intermediaries.
 To regulate maintenance of margin of
solvency.
 Functions Cont…
 To levy fees & other charges for carrying out
the purposes of this act.
 To adjudication of disputes between insurers
& intermediaries or insurance intermediaries.
 To specify the percentage of premium income
of the insurer financial schemes for promoting
& regulating professional organization.
LAWS AND REGULATIONS

Insurance Act, 1938

Life Insurance Corporation Act, 1956
Insurance Regulatory and Development
Authority Act,1999
Consumer Protection Act, 1986
Ombudsman
Income Tax Act
Marriage Women’s Property Act, 1874
INSURANCE ACT, 1938

The Insurance Act,1938 came into effect from 1 st July 1939, and was
amended in1950 and in 1999.

It has the following provisions:

Licensing of agents and their remunerations
Probhition of rebates
Protection of policyholder’s interests
Placing the limits on the expenses of insurers use of funds and
patterns of investments
Maintaining solvency levels
Insurance Act Cont…
•Constitution of Insurance Association and Insurance Councils
and the Tariff Advisory Committee for General Insurance

Till 1999 the Controller of Insurance was responsible for the

administration of Insurance Act.
Since 1999, the IRDA has replaced the Controller of Insurance.
The Insurance Act vests the IRDA powers to:
Register insurance companies and also cancel their registrations
Insurance Act Cont…
Monitor and certify the soundness of the terms
of life insurance business.
Make regulation relating to the conduct of the
business of insurance.
Inspect documents of insurer
Appoint additional directors
Issue directions
Takeover the management of an insurer and
appoint administrators.
Insurance Act Cont…
Adjudicate on disputes between insurers and
intermediaries or between intermediaries.
Decide on disputes relating to settlement of
claims of amounts not exceeding Rs.2000.

By the end of December 2006, the IRDA had

issued more than 25 regulations and also issued
several guidelines to insurers on a variety of
matters.
LIFE INSURANCE ACT,1956
Basis for the establishment of LIC:
Members- not more than 16.
One of them being chairman, appointed by
Central Government.
Section 30 gave LIC exclusive privilege to transact
life insurance business in India and ceased as a
result of the amendments made in 1999.
16 insurance companies were registered and had
commenced life insurance business till 31.8.2007
 IRDA ACT, 1999
IRDA is a corporate body which is passed in
December 1999
It was established
a) to protect the interests to holders of insurance
policies,
b)to regulate, promote and ensure orderly growth of
the insurance industry.
It also sought to amend
a) the Insurance Act 1938,
b) the Life Insurance Corporation Act 1956,
c) the General Insurance Business Act,1972.
IRDA Act Cont…
Members –not more than 25
It replaces the ‘Controller of Insurance’ to
administer the provisions of Insurance Act.
It includes:
a)Registration
b)Licensing
c)Laying down regulations
for proper conduct of business.
CONSUMER PROTECTION ACT,1986

A consumer can approach the various forums

prescribed under the act for redress, in case he
is not satisfied with the goods and services
provided.
Consumer redress forums are established in
each district in each state.
Consumer Protection Cont…

complaints upto the value of

At district level-Rs. 20 lakh

At state level-Rs. 1 crore
The national commission will attend matters
beyond state level.
OMBUDSMAN
The governing body of the insurance council is
authorized by law to appoint ombudsman for the
insurance industry.
Function-
to resolve complaints.
Acts as counsel and mediator in matters
Complaints may relate to:
a)Partial or total repudiation of claims
b)Any dispute regarding premium paid or payable
Ombudsman Cont…

Delay in settlement of claims

Non-issue of any insurance documents to
customers after receipts of premium.
HOW OMBUDSMAN DEALS WITH COMPLAINTS

A complain can be made within one year after the insurer had
rejected the representations.
Expected to make the recommendation within one month from
the date of receipt of complains
Accepted-the insurer has to comply within 15 days.
Not accepted:
it will pass a award in writing stated the amount awarded.
Award has to be pass within 3 months.
intimate acceptance-should be within one month by a letter
of acceptance to the insurer.
Not intimate the acceptance- award cannot be implemented.
INCOME TAX ACT 1961
relief from income tax liabilities
Sum received under a life insurance policy exempted from
income tax subjected to the premium not more than 20% of SA.
The income of the assesses is reduced by aggregate amounts
paid towards insurance premiums , up to max. Rs. 1 lakh.
Commuted values of pensions are exempt from income tax.
The wealth tax exempts life insurance policies:
Premium more than 10 years or more
Less than 10 years- proportionate value is deducted.
PROCEDURE Of ISSUE OR RENEWAL OF
LICENSE BY IRDA

Application through designate person.

Fees payable by the applicant to

the Authority.

Designated Person Grant or Renew

Yes

Delay
No
If delayed within 60
License is Granted or Reason for days of receipt of the
Renewed within period refusing application, inform the
of 3 Months applicant for reason.
Qualifications of the applicant

Population 5,000 or Any other place

more

Pass in 12th Std. or Pass in 10th Std. or

equivalent examination. equivalent examination.
`