PRESENTED BY

YASHASVINI
THARANI
RASHMI
VANDANA
DEVI PRIYA
 LEARNING INDEX
IRDAI

Organizatio Insurance
INTRODU Supervisor Prudential
HISTORY nal Structure Regulatory
CTION of IRDAI Framework: y Role approach
INTRODUCTION
Insurance Regulatory and Development Authority Act, 1999
objectives of the IRDAI include promotion of competition 
IRDAI’s Head Office is at Hyderabad
IRDAI’s Regional Offices are at New Delhi & Mumbai
What Is Insurance?

Insurance is a contract, represented by a policy, in which an individual or

entity receives financial protection or reimbursement against losses from

an insurance company. The company pools clients' risks to make

payments more affordable for the insured.

Financial system
 Establishment of IRDAI

In1993: Government setup a committee

Headed by: RN Malhotra (Former governor of RBI)

In 1994: Malhotra committee Submitted report

Recommendations

 Private Sector Entry to Insurance Market

 Foreign Company Should Enter

 Recommendation of Malhotra committee was Independent Regulatory

Authority for Insurance Sector.

Constitution of IRDAI

In1999: IRDAI Act was constituted

In April 2000: IRDAI Come into existence

H.Q: Delhi(2000), Hyderabad(2001)

Chairman: Subhash Chandra Khuntia.

Meaning of IRDAI
IRDA or Insurance Regulatory and Development Authority of India is

the apex body that supervises and regulates the insurance sector in

India. The primary purpose of IRDA is to safeguard the interest of the

policyholders and ensure the growth of insurance in the country. When

it comes to regulating the insurance industry, IRDA not only looks over

the life insurance, but also general insurance companies operating

within the country.

Mission of IRDA
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 super annuation payments) for the benefit of the
common man, and to promote long term funds for accelerating growth
and 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 and transparency and orderly conduct in financial
markets dealing with insurance and build a reliable management
information system to enforce high standards of financial soundness
among market players.
To take action where such standards are inadequate or ineffectively
enforced.
To bring about optimum amount of self-regulation in day to day
working of the industry consistent with the requirements of prudential
regulation .
Composition of authority
Definitions (section 2)
Authority
“Authority “ means the insurance regulatory and development authority
established u/s 3(1) of the insurance regulatory and development authority
act 1999.
Intermediary or Insurance Intermediary includes insurance brokers,
reinsurance brokers, insurance consultants, surveyors and loss assessors.
“Member “ means a whole time or a part time member of the authority
and includes the chairperson
Establishment of Authority (section 3)

Characteristics of the authority(section 3(2))

A body corporate having perpetual succession and common seal with
power to acquire, hold and dispose of property ,both movable and
immovable and to contract and shall, by the said name, sue or be sued.
 Structure of IRDAI
(Sec4 IRDAI) Act 1999
10 Members Body

1 Chairman 4 Part time

(5years)
5 Whole time Members
members (<5years)
(5years)

They all are appointed by Government of

Composition of authority (section 4)
Chairperson and members (section 4(1))
A chairperson not more than 5 whole time members, not more than 4
part time members to be appointed by CG.
Requirement as to specialized areas (section 4(2))
Chairperson can only be the person who is an expert in life insurance.
General Insurance and actuarial science.
Terms of office of chairperson and members of authority
(section 5)
Term of office of chairperson and whole time members (section 5(1))
Term for chairperson and every WTM -5 years and shall be eligible for
reappointment.
Maximum age of chairperson-65 years.
Maximum age of whole time members-62 years.
Time of office of part time members(section 5(2)) maximum 5 years
Removal and resignation (section 5(3))
A member may relinquish his office by giving notice in writing to CG of
not less than 3 months or be removed from his office.
Removal from office of chairperson and other members
(section 6)
CG may remove from office any member who is insolvent physically or
mentally incapable has been convicted of an offence involving moral
turpitude, has acquired financial or other interest which is likely to affect
prejudicially his functions as member or has abused his postion.
 FUNCTIONS OF IRDA

As defined by the IRDA act, 1999 IRDA performs the following broad function.

1. Issuing certificate of registration

2. Protect interest of policy holder
3. Issue consumer protection guidelines to insurance companies
4. Issuing license to agent
5. Specifying code of conduct
6. Promoting insurance business
7. Inspection enquires on insurance companies
8. Provide information about rates, terms and conditions
9. Adjudication of disputes
10.Enhancing insurance business in rural.
 DUTIES AND POWERS OF IRDA

According to the section 14 of IRDA act of 1999 there are certain duties

1. Compulsory registration with IRDA

2. Under take only insurance business
3. Protection of the interests of the policy holders
4. Capital structure determined by IRDA
5. Deposit with RBI stipulated by IRDA
6. All accounts , financial reports submitted to IRDA
7. Investments or securities prescribed by IRDA
8. Natures of general insurance business prescribed by IRDA
9. Agents must obtain license from IRDA
10. Appointment of CEO requires permission by IRDA
11. Powers to levying penalty.
 REMOVAL FROM OFFICE

The central government may remove from office any member who

1. Is act as an insolvent
2. Has become physically or mentally incapable of acting as a member
3. Has been convicted of any offence which in the opinion of the central government,
involves moral turpitude.
4. Has acquired such financial or other interest as is likely to affect prejudicially his
functions as a member
5. Has so abused his position as to render his continuation in office detrimental to the
public interest
6. No such member shall be removed under clause (d) or clause (e) of sub- section (1)
unless he has been given a reasonable opportunity of being heard in the matter.
 DIFFERENCE BETWEEN IRDAI AND SEBI
IRDAI SEBI

Regulation of the Insurance industry Regulation of security and commodity sectors

Estalishment: 1999 Establishment: 1992

Protects policyholder’s interests Protects investor’s security interests

Grant Registration Certificates to the new insurance Grant Registration Certificate to the stockbrokers, sub-
companies brokers, bankers to issue deeds.

Shaping of rules & regulations under IRDAI Act of India Shaping of rules & regulations under SEBI Act of India.
IRDAI GUIDELINES FOR HEALTH AND MEDICLAIM
INSURANCES

Claim rejection
Telemedicine inclusions
Claims settlement
INSURANCE OMBUDSMAN
The Governing Body of Insurance Council (GBIC) has been established under
Redressal of Public Grievances Rules 1998.
Appointed by Governing body
The Insurance Ombudsman scheme was created by the Government of India
for individual policyholders.
There are at present 17 Insurance Ombudsman in different locations.  each
covering different regions. You can file your complaint without paying
anything at an office that covers your jurisdiction.
Policyholders can approach with the complaint of :
They have not resolved it
Not resolved it to your satisfaction or
 Not responded to it at all for 30 days
Expenses should not exceed 30 lakhs

Your complaint to the Ombudsman can be about:

• Any partial or total repudiation of claims by an insurer.
• Any dispute in regard to premium paid or payable in terms of the policy.
• Misrepresentation of policy terms and conditions at any time in policy terms
• Delay in settlement of claims.
Regulation making process:
 Section 26 (1) of IRDAI Act, 1999 and 114A of Insurance Act, 1938  frame
regulations,
Section 25 of IRDAI Act, 1999 lays down for establishment of Insurance Advisory
Committee 
advise the Authority on matters relating to making of regulations under Section
26.
draft regulations 
 notified in the Gazette of India.
submitted to the Ministry for placing the same before the Parliament.
Authority has issued regulations and circulars on various aspects of operations
various aspects of operations of the Insurance companies 
Protection of policyholders’ interest
Procedures for registration of insurers or licensing of intermediaries, agents, surveyors and
Third Party Administrators;
Fit and proper assessment of the promoters and the management
Clearance /filing of products before being introduced in the market
Preparation of accounts and submission of accounts returns to the Authority.
Actuarial valuation of the liabilities of life Insurance business and forms for filing of the
actuarial report;
Provisioning for liabilities in case of non-life Insurance companies
Manner of investment of funds and periodic reports on investments
Maintenance of solvency
Market conduct issues
 

 Reporting Requirements:
Prudential approach: Reporting, Risk monitoring and intervention:

 Solvency of Insurers:
 Asset-Liability Management:
 Reinsurance

 On and off site Supervision:

Onsite Inspections:
Off-site Inspection:
 inspection conducted by analyzing periodic statements, returns, reports, policies,
business performance, investment of funds, remuneration details, expenses of
management, business statistics, auditor certificates