All about IRDAI

• 16th Jan 2020
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If you have a life insurance policy or want to get one soon, then you should be aware of the regulatory body of the system. To better understand the autonomous body and how they aid in promoting transparency and fairness in the system, here are some frequently asked questions about IRDA:

What Is IRDA?

Insurance Regulatory and Development Authority (IRDA) is an autonomous regulatory body that protects the interests of the people having life insurance. IRDA also manages and oversees the growth and development of insurance industries in India.

What Is the Purpose of IRDA?

IRDA was set up in the year 1999 under the IRDA Act to regulate and monitor the activities in the insurance sector for the healthy development of the industry. The autonomous body also registers newer insurance companies according to the regulations. IRDA often formulates norms and takes care of licensing the insurance intermediaries. Here are some purposes of the IRDA:

• To bring rapid and orderly growth of the insurance sector
• To safeguard the interests of the policyholder
• To ensure quick claim settlements of the policyholders and eliminate insurance frauds
• To advance and better the standards of financial markets dealing with insurance and build a strong management system
• To take appropriate actions when this standard is low or inadequate

What Are the Powers and Functions of IRDA?

The aim of IRDA is to make sure that the interests of policyholders are secured and they do not face any problems during claim settlements. Here is how IRDA functions:

• To protect the interests of the policyholder in areas like assigning of policy, nomination by policyholders, insurable interest, settlement of insurance claim, surrender value of the policy and other terms and conditions of contracts of insurance. The IRDA also ensures that no insurance company denies the claim of a policyholder unless the case falls beyond the scope of coverage
• Due to the availability of numerous insurers in the market, IRDA makes certain that the companies follow the code of conduct for surveyors and the loss assessors
• To avoid insurers from committing any wrongdoing, IRDA carries out inspections, inquiries, and investigations including the audit of the insurance companies, insurance intermediaries and other organizations connected with the business
• The rates, advantages, terms and conditions offered by the insurers are controlled and regulated by IRDA
• The autonomous body also supervises the functioning of the Tariff Advisory Committee
• IRDA also specifies the percentage of life insurance and general insurance businesses to be initiated by the insurer in the rural or social sector
• They regulate the investment of funds by insurance companies

- A Consumer Education Initiative series by Kotak Life