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The Insurance Regulatory and Development Authority of India (IRDAI) is an autonomous regulatory body that protects the interests of the policyholder. They oversee the growth of the insurance sector in India, the requirements that different types of insurance policies project, and help maintain a speedy development. The IRDAI was formed under the IRDAI Act in 1999, with various functions and responsibilities conferred upon them.
With so many roles, the IRDAI maintains the standard of the industry and takes measures to eliminate insurance frauds.
IRDAI is an abbreviation that stands for the Insurance Regulatory and Development Authority of India. The insurance business in India is regulated by them and they supervise the functioning of Life Insurance and General Insurance companies that are operating in the country.
IRDAI has set various rules and regulations for the operation of the insurance industry. Its sole objective is to defend the interest of the policyholders and ensure the growth and evolution of the insurance industry holistically. IRDAI regularly issues notices to insurance companies in case there are any changes in the rules and regulations. It leads the insurance companies to foster efficiency in the conduct of insurance business and control the rates or any other charges related to insurance.
The IRDAI Act provides a complete regulation of the insurance sector in India (all the insurance business in India is regulated by IRDAI). The IRDAI plays a key role in the development of regulatory mechanism of insurance in the insurance sector.
A committee was established by the Government of India to examine the structure of the insurance sector and to advocate revisions to the rules and regulations to make it more effective and efficient.
IRDAI was presented in the parliament in 1999. The bill was discussed and debated before it finally became the Insurance Regulatory and Development Authority of India (IRDAI) Act of 1999.
You must approach your insurance company for any query or distress concerning your policy. However, if you feel your issue is not resolved, you can approach the Insurance Ombudsman, which plays the role of grievance redressal forum for policyholders. It is a scheme launched by the Central Government for impartial, efficient, and cost-effective settlement of grievances of a policyholder.
You can lodge a complaint in writing, duly signed by the complainant or by employing any legal heirs or nominees. You can complain either in person or via email/post/fax along with a hard copy.
The insurance industry is divided into two main categories:
As the name implies, life insurance governs the plans that safeguard your life. It is a contract between an insurance policyholder and an insurance company wherein the insurer agrees to pay a sum of money in exchange for premium payments if the covered person passes away, or after the designated maturity period. Further, life insurance is of two types - term life insurance and whole life insurance.
Everything else that is not covered under life insurance falls under non-life or general insurance. This includes - health insurance, vehicle insurance, two-wheeler insurance, home insurance, business insurance, travel insurance, etc.
The Insurance Industry in India, established back in the early 1800s, has developed over the decades with better transparency and emphasis on protecting the interest of the policyholders. Here are the roles IRDAI plays in the Indian Insurance Sector:
The primary objective of the IRDAI is to implement the provisions under the Insurance Act. The mission statement of IRDAI is:
The Government of India was the regulatory body for the insurance industry until the year 2000. However, in order to establish a stand-alone body, the IRDAI was built following the recommendation of the Malhotra Committee Report in 1999. By August 2000, the IRDAI began accepting applications for registrations and allowed companies through invites from different countries to invest as much as 26% in the Indian market.
It has defined several rules and regulations under the Insurance Act of 1938. These regulations range from registration of insurance companies to operating in the country to protect the interest of policyholders. As of September 2020, there are 24 Life Insurance companies and 31 General Insurance companies who are registered with the IRDAI.
IRDAI, known to be the apex body of the insurance sector, ensures that it frames rules and regulations without any uncertainty or ambiguity towards any insurance company. To ensure the integrity and financial soundness in the industry, the primary work of the IRDAI revolves around the interest of the policyholder. Let us catch a look at the various roles of the IRDAI:
Given below are some of the leading features and benefits of the Insurance Regulatory and Development Authority of India (IRDAI).
Here are a few IRDAI guidelines for claim settlement that you should be aware of:
Here are a few points of difference between IRDAI and SEBI:
|Established - 1999||Established - 1992|
|Looks after the interests of insurance holders||Looks after the interests of investors|
|Provides certificate of registration to insurance companies for issuing insurance policies||Provides certificate of registration to bankers and brokers for issuing deeds.|
|Looks after the insurance industry||Looks after the securities and commodities industry|
|Frames terms and conditions as per IRDAI (Insurance Regulatory and Development Authority of India Act)||Frames terms and conditions as per SEBI (Securities and Exchange Board of India Act)|
The IRDAI is the primary authority in charge of developing new health insurance policies and recommendations. In 2020, the regulator released new IRDAI rules for health and medical insurance, which are as follows:
The insurer cannot reject the claim if the policyholder has renewed the policy for eight years without an interruption or lapse. The moratorium period will be in effect throughout this time. Except in fraud cases or when the claim is brought against a policy exclusion, the insurer cannot appeal the claim denial to the IRDAI.
The medical service has altered with the advent of digitization, and one can now visit a doctor via online consultations. The Insurance Regulatory and Development Authority of India (IRDAI) has ordered insurers to incorporate telemedicine consultations in their policies.
If an insurer fails to settle a claim within a reasonable time, the insurer is obligated to pay interest on the claim amount. It should ensure that the claim is settled within 30 to 45 days of the policyholder submitting the final document.
IRDAI is a regulatory body that is responsible for everything right and wrong any insurance company does. You can either contact them or let them know about your grievances if the insurance company denies to answer. You can also raise any queries about the insurance policy and insurer in case of a fraud. In either way, the role of IRDAI is very significant for complete transparency and making changes to the rules and regulations from time to time.