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Based on the recommendations of the Malhotra Committee, the IRDA Act, 1999 was legislated and the authority

so established under this Act has made regulations for the smooth conduct of the insurance business. The Regulatory Authority is appointed by the Central Government by a notification in the Official Gazette.

The Authority is a corporate body having perpetual succession with a power to hold the property and to do all the acts of the insurance business.

The IRDA has made a number of regulations for the appointment and licensing of agents, surveyors and loss assessors, advertisements and disclosures, and other matters relating to the insurance business.

An effort is made to explore the important provisions of law and regulations of the insurance business in a simple way to enable the customer of insurance service, understand the legalities of the insurance business.

Mr N Rangachari was the first Chairman. Mr C S Rao was the second Chairman of IRDA. Mr Hari Narayana is the third Chairman of IRDA . The Insurance Regulatory and Development Authority (IRDA) is a national agency of the Government of India, based in Hyderabad. It was formed by an act of Indian Parliament known as IRDA Act 1999, which was amended in 2002 to incorporate some emerging requirements.

Mission of IRDA as stated in the act is "to protect the interests of the policyholders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected there with or incidental thereto. The main objective of legislating this Insurance Law is to design rules and procedures to administer justice for the benefit of the insurance business.

Section 14 of IRDA Act, 1999 laysdown the duties,powers and functions of IRDA . Subject to the provisions of this Act and any other law for the time being in force, the Authority shall have the duty to regulate, promote and ensure orderly growth of the insurance business and re-insurance business. Without prejudice to the generality of the provisions contained in sub-section (1), the powers and functions of the Authority includes from (a) (q)

(a) issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration; (b) 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 policy and other terms and conditions of contracts of insurance;

(c) specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents;
(d) specifying the code of conduct for surveyors and loss assessors;

(e) promoting efficiency in the conduct of insurance business;

(f) promoting and regulating professional organizations connected with the insurance and re-insurance business;

(g) levying fees and other charges for carrying out the purposes of this Act;

(h) 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;
(i) control and regulation of 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);

(j) specifying 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;

(k) regulating investment of funds by insurance companies;

(l) regulating maintenance of margin of solvency;


(m) adjudication of disputes between insurers and intermediaries or insurance intermediaries; (n) supervising the functioning of the Tariff Advisory Committee; (o) specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organizations referred to in clause (f); (p) specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector; and (q) exercising such other powers as may be prescribed

The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and General Insurance Business (Nationalisation) Act, 1972, Insurance Regulatory and Development Authority (IRDA) Act, 1999 and other related Acts. It was due to this immense growth that the regulations were introduced in the insurance sector and in continuation Malhotra Committee was constituted by the government in 1993 to examine the various aspects of the industry. The key element of the reform process was Participation of overseas insurance companies with 26% capital.

Today it stands as a business growing at the rate of 15-20 per cent annually. Together with banking services, it adds about 7 per cent to the countrys GDP. Since the liberalization of the industry the insurance industry has never looked back and today stand as the one of the most competitive and exploring industry in India.

The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. General Insurance was however a comparatively late entrant in 1850 when Triton Insurance company set up its base in Kolkata. History of Insurance in India can be broadly bifurcated into three eras: a) Pre Nationalisation b) Nationalisation and c) Post Nationalisation.

Life Insurance was the first to be nationalized in 1956. General Insurance followed suit and was nationalized in 1973.

Malhotra Committee was formed during this year who submitted their report in 1994 and Insurance Regulatory Development Act (IRDA) was passed in 1999.
Resultantly Indian Insurance was opened for private companies and Private Insurance Company effectively started operations from 2001.

There are basically three types of insurance: (1) LIFE INSURANCE. (2) MEDICLAIM. (3) GENERAL INSURANCE.

Life insurance or life assurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a designated beneficiary a sum of money upon the occurrence of the insured individual's or individuals' death or other event, such as terminal illness or critical illness. Life insurance may be divided into two basic classes temporary and permanent: (1)Term assurance provides life insurance coverage for a specified term of years in exchange for a specified premium. (2) Permanent life insurance is life insurance that remains in force (in-line) until the policy matures (pays out), unless the owner fails to pay the premium when due (the policy expires OR policies lapse).

A Mediclaim policy or a health insurance policy will help you cover the medical expenses in case you have to undergo certain medical treatment or are hospitalized for some reason. The Mediclaim policy can be taken on an individual basis or for the entire family if the need be. The medical age for a Mediclaim policy differs and thus in certain cases the applicant may be required to undergo a medical test or in certain cases the applicant may not be asked to undergo a medical test.

Insurance other than Life Insurance falls under the category of General Insurance. General Insurance comprises of insurance of property against fire, burglary etc, personal insurance such as Accident , and liability insurance which covers legal liabilities. A Marine Cargo policy covers goods in transit including by sea, air and road. Insurance of motor vehicles against damages and theft forms a major chunk of General Insurance.

A number of web-sites are coming up on insurance, a few financial magazines exclusively devoted to insurance and also a few training institutes being set up hurriedly. Many of the universities and management institutes have already started or are contemplating new courses in insurance. Life insurance has today become a mainstay of any market economy since it offers plenty of scope for garnering large sums of money for long periods of time.
RIZVI COLLEGE 18 Reference from books Risk management and insurance sector LIC insurance