Kotak Life

Buy a Life Insurance Plan in a few clicks


Now you can buy life insurance plan online.

Kotak e-Term Plan

Kotak e-Term Plan provides a high level of protection to your loved ones in your absence. Know more

Kotak Guaranteed Savings Plan

Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and provides an insurance cover against any eventuality. Know more

Kotak E-Invest

Kotak e-Invest plan is a complete Unit-Linked Insurance Plan that can be customized as per your goals and needs. Know more

Kotak Health Shield

Kotak Health Shield Plan helps secure your finances in sudden medical expenses such as Cardiac, Liver, Neuro, and Cancer (all early and significant illness stages/conditions of cancer), along with offering protection for personal accidents - in case of accidental death or disability. Know more

Kotak Lifetime Income Plan

Kotak Lifetime Income Plan gives you the security of your income continuing throughout your life and in your absence throughout your spouse's lifetime! Know more

Role of IRDAI in the Insurance Sector

Role of IRDAI in the Insurance Sector
  • 16th Jan 2020 |
  • 64,967

What is the Role of IRDA?

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.

Here are the roles of the IRDAI in the insurance sector:

  • IRDAI issues a certificate of registration to the life insurance company and also renews, modifies, withdraws, suspends and cancels the registration.
  • The regulatory body secures policyholder’s interests 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 applicable to an insurance contract.
  • It specifies the requisite qualifications, code of conduct and practical training required for insurance intermediaries and agents.
  • IRDAI makes certain that the code of conduct is followed by surveyors and loss assessors.
  • The autonomous body promotes efficiency in the conduct of the insurance business.
  • It also promotes and regulates professional organisations connected with the insurance and reinsurance business.
  • It levies fees and other charges for carrying out the purposes of the IRDAI Act.
  • IRDAI carries out functions like inspection, conducting inquiries and investigations, including an audit of the insurers, insurance intermediaries and other organisations involved with the insurance business.
  • The rates, advantages, terms and conditions that may be offered by insurers with respect to general insurance business are also controlled and regulated by the regulatory body.
  • It also specifies the form and manner in which books of account should be maintained, and the statement of accounts should be rendered by insurers and insurance intermediaries.
  • IRDAI monitors the investment of funds by insurance companies and governs the maintenance of the margin of solvency.
  • It also judges the disputes between insurers and intermediaries or insurance intermediaries.
  • It supervises the functioning of the Tariff Advisory Committee.
  • IRDAI specifies the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organisations referred to in clause (f).
  • It specifies the percentage of life insurance and general insurance business to be undertaken by the insurer in the rural or social sector.

With so many roles, the IRDAI maintains the standard of the industry and takes measures to eliminate insurance frauds.

What is IRDAI?

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.

What is the IRDAI Act?

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.

What is an Insurance Ombudsman?

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 employ Insurance Ombudsman in case of:

  • Claim settlement delay
  • Dispute over insurance premium
  • Total or partial rejection of the claim by the insurance company
  • Conflict over policy terms and conditions
  • Disputes over legal aspects of the policy
  • Disputes related to policy services
  • Any breach of rules or regulations of the Insurance Act, 1938
  • 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.

    What are the types of insurance policies regulated by IRDAI?

    The insurance industry is divided into two main categories:

    1.Life insurance

    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.

    2.Non-life insurance (also commonly known as general 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.

    Understanding the Role of IRDAI in Indian Insurance Sector

    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:

    • Protecting the interest of the policyholder.
    • Assist in advancing the growth of the insurance industry in an organised manner for the benefit of the common man.
    • Grant, renew, revoke, modify or suspend the registration certificate of an insurance company.
    • Safeguard the policyholder in matters concerning the grant of policies, settlement of a claim, selection of a nominee by the policyholder, surrender policy value and other such terms and conditions of the policy.
    • Provide long-term funds to accelerate the nation’s economy.
    • Enforce high standards of integrity and competence among policy providers.
    • Ensure that genuine claims are settled efficiently.
    • Prevent malpractices and policy fraud by providing a grievance redressal forum for policyholders.
    • Promote fairness and transparency of insurance in financial markets.
    • To build a reliable management system to ensure that high standards are maintained and financial stability is observed by the policy providers.
    • Take appropriate actions when high standards are not maintained.
    • To ensure an optimal level of self-regulation in the insurance industry.

    The Objective of IRDAI

    The primary objective of the IRDAI is to implement the provisions under the Insurance Act. The mission statement of IRDAI is:

    • To safeguard the interest of the policyholder and ensure his/her fair treatment.
    • To govern the insurance industry impartially and to make sure the financial sanity of the industry remains intact.
    • To routinely formulate regulations to ensure the insurance industry functions without any uncertainty.

    Establishment and History of IRDAI

    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.

    How Does IRDAI Work?

    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:

    • To issue the certificate of registration to new insurance companies.
    • Establish rules and regulations to take care of the interests of the policyholders.
    • To monitor claim settlements in a fair manner, and ensure that no claim is denied by the insurance company under their free will.
    • To regulate the code of conduct of the insurance company and of those associated with the insurance industry.
    • Address issues and provide solutions in case of disputes which have risen via the IRDAI ombudsman.
    • Regulate and control the rate of insurance to impede undesirable and superfluous price hikes in insurance premiums which might cause distress to the policyholder.
    • The IRDAI is also accountable for setting a minimum percentage limit of insurance companies for both Life Insurance and General Insurance.
    • IRDAI is also responsible for granting licenses to insurance agents. It issues licenses to individuals to clear the required exam. It was integrated with the IRDAI regulations and comprised the rules for applying and acquiring an insurance agent license.

    Features and Benefits of IRDAI

    Given below are some of the leading features and benefits of the Insurance Regulatory and Development Authority of India (IRDAI).

    • Acts as a regulatory body for the insurance industry.
    • Safeguards the interests of the policyholder.
    • Rules and regulations are established by the IRDAI under Section 114A of the Insurance Act of 1938.
    • IRDAI has the authority to grant certificates of registration to new insurance companies who wish to operate in India.
    • IRDAI oversees the activities of the insurance industry to guarantee the persistent development of both the insurance company and the policyholder.
    • IRDAI can control and regulate insurance rates, terms and conditions, and advantages that are offered by the insurance providers to the policyholders.
    • IRDAI also undertakes inspections and conduct audits of insurance companies, mediator parties and other organisations who are associated with the insurance business to keep an eye out for malpractices and safeguard policyholders against fraud.
    • IRDAI can specify the code of conduct, training and qualifications for insurance agents.

    IRDAI Guidelines for Claim Settlement

    Here are a few IRDAI guidelines for claim settlement that you should be aware of:

    • As per regulation 27(i), the insurance company or insurer should either settle a claim or reject it within thirty days of receiving all the documents required.
    • As per regulation 27(ii), any document not listed under the policy shall not be treated as absolutely necessary unless foul play is suspected. Furthermore, all the additional documents that are asked for must be taken as a one-time call rather than as per time-specific requirements.
    • Regulation 27(iv) states that in order to make a claim, the insurer must provide a certain time period within which all the documents need to be submitted. Additionally, if the policyholder fails to provide these documents within the required window and asks for a claim after, then the settlement can be done provided there is a valid cause for the delay
    • As per regulation 27(v), every claim that is settled must be in accordance with the policy’s terms and conditions.

    Difference Between IRDAI and SEBI on their Functions

    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)

    New Rules and Guidelines for Health and Mediclaim Insurance by IRDAI:

    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:

    • Claims Rejection

    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.

    • Inclusion of Telemedicine

    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.

    • Claim Settlement

    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.

Kotak e-Term Plan


  • Nominal Cost
  • Multiple Plan Options
  • Flexible Payout Options
  • Critical Illness Rider
  • Tax Savings
  • Long term Coverage

Ref. No. KLI/22-23/E-BB/492


Browse our library of resources

- A Consumer Education Initiative series by Kotak Life

Similar Articles

Should Youngsters, Working Couples Buy Term Insurance Plans?

Should You Buy a Term Plan After 40?

Ideal Features of a Suitable Term Plan - Act Now for a Stress-free Future

Know How to Invest at Every Age for Larger Returns

Term Insurance Age Limit – Term Plan for All Age Groups

Does Your Term Insurance Plan Cover Death Due to COVID-19?

Insuring Against Disability With Disability Insurance Rider

5 Things To Consider While Buying Term Insurance Plan

How To Change The Nominee in Term Insurance?

Why Premium Amount for Term Insurance is So Low?

Term Insurance Plans and Policies for Smokers

Insuring yourself against Ill Health with a Critical Illness Rider

8 Factors to consider before choosing a Critical Illness Insurance

Comparing Term Plans – What Should You Look Out For

How Does A Term Life Insurance Work in India?

Insuring Protection Against Death With Death Insurance Rider

Insuring Against Accidents with an Accidental Death Insurance Rider

Understanding Term Insurance Riders

Advantages of Buying Term Insurance in Your 50s

Is term Insurance Needed for People With No Dependents?

Is a Term Insurance Policy Portable?

Is it a Good Time to Buy Term Insurance During the COVID-19 Pandemic?

Online vs Offline Term Insurance: Which Is The Better Option To Buy

What is a Joint Term Insurance Plan? Key Benefits of Joint Term Plan

Why Should New Parents Buy Term Life Insurance?

Eligibility Criteria for Buying Term Insurance in India

Term Plans are Definitely Cheaper than You Think!

Make Your Online Term Plan Your Family's Monthly Pay Cheque

Are The Add-ons and Optional Features of Term Insurance Plans Actually Beneficial?

Increasing Term Insurance and Riders

टर्म इंश्योरेंस क्या है? टर्म इंश्योरेंस का मतलब

Why Buy Term Insurance Plan With a High Cover?

Why 1 Cr Term Plan Is Necessary For Family?

Why Term Insurance Is Better Than ULIP?

How Not To Get Your Term Insurance Claim Rejected

Why does every working woman need life insurance?

Why Should You Add a Rider to a Term Insurance Plan?

Term Life Insurance Plan for Smokers vs Non-Smokers

Ensure Protection Against Death, Disease & Disability With Life Insurance

What is Form 16, Form 16 part A, Form 16 part B, Information Required and FAQs

6 Types of Death not covered in Term Insurance Plan

Why should single women purchase term life insurance?

10-Year Term Life Insurance Policy - Explained in Detail

Key IRDAI Regulations That Changed Face Of Term Insurance Industry In 2020

Term Insurance With Riders In India

8 Benefits of Term Insurance You Should Know

How to Compare Term Insurance Online

What All Documents Required For Term Insurance In India?

Is It Good To Buy A Term Insurance Plan In 2022?

Do You Need Term Insurance Cover After Retirement?

While Buying Term Insurance Compare Features, Not Just Premiums

All you need to Know about Term Insurance Plans for Housewives

Term Vs. Whole Life Insurance: Which One You Should Buy in India?

Term Insurance – Why You Must Include In Your Financial Planning?

How To Calculate The Amount Of Term Life Insurance You Need?

How to Ensure That Your Term Insurance Claims Are Never Rejected?

How Much Term Insurance Do I Need

What is Term Insurance - A Complete Guide

5 Term Insurance Benefits for Single Women

Why Should You Buy Term Insurance in 2022?

Is ₹1 Crore Term Insurance Good Enough Cover?

What Is the Correct Age to Buy Term Insurance?

Term Insurance Calculator - Everythng You Need To Know

How to Buy 1 Crore Life Insurance Policy Without Medical Test

Term Insurance: What Happens When You Don’t Pay Your Premiums?

Why Should You Not Take A Term Plan Without Medical Test in India?

Cost of Term Insurance Likely to Increase Soon

How To Choose the Right Sum Assured Under a Term Plan?

5 Reasons to Buy Term Insurance When You are in Your 30s

4 Methods to Calculate How Much Term Insurance You Need

Difference between Term Insurance and Life Insurance

What are the Documents Required for Term Insurance Plan?

Best Investment Plans for Children - Secure Your Child's Future

Can Senior Citizens Avail Term Insurance?

Key Differences Between Term Insurance, ULIPs, And Health Insurance

Term Insurance Basics You Should Know

Protection for your family

Why Surrendering Your Term Plan Policy In The Final Phase Maybe A Bad Idea?

What Should You opt for - Limited or Premium Pay?

What Should Be The Duration Of Your Term Plan in India?

Importance of Term Insurance at Every Stage of Your Life

5 Benefits of Early Retirement Planning

Tax Benefits of Term Insurance in India

Is Group Term Life Insurance Provided By Employer Sufficient?

What Happens to Term Insurance Plan With No Beneficiary - Kotak Life

What Happens if you Hide Facts in your Term Insurance?

Top 3 Reasons Why You Should Buy A Term Plan Now

What Are Insurance Riders and How to Choose Them in a Term Plan?

Calculating Term Insurance Premium

Term Insurance: Smokers vs Non-Smokers

Is There Any Tax Benefit on Term Insurance?

Which Term Insurance to Choose: Lump Sum or Staggered Pay-out Plan?

What is a short term insurance policy?

Reasons You Need Term Insurance Plan as a Self-Employed Person

9 Ways to Help Family Members in Financial Trouble

Is Life Insurance Investment Worthy Enough

4 Reasons Why You Need Critical Illness Cover

All About Term Insurance Inbuilt Coverage

8 Things To Do After Buying Term Insurance

Can I Get Term Insurance on Behalf of My Spouse?

How To Choose the Right Term Insurance Plan?

Do I Need to Give a Medical Test for Term Insurance in India?

Why Buying a Term Plan Is Smarter Than Traditional Life Insurance Products

Term Insurance: Most Common Term Insurance Myths Explained | Kotak Life

How Does Term Life Insurance Work? Learn the Benefits

What is Critical Illness Policy

Gift Your Father A Term Insurance Plan This Father's Day

What Is a Renewable Term Insurance Policy?

4 Things To Expect From Your Term Insurance Plan in India

Can Non-Resident Indians (NRIs) Buy Term Insurance In India?

Do Beneficiaries Pay Taxes on Term Insurance?

Different Types of Premium in Term Insurance

Endowment Plans vs Term Plans: Understanding the difference

Can I Buy Term Insurance for a COVID-19 Patient?

Term Plan with Spouse Cover

Can I Extend the Tenure of My Term Insurance Plan?

What Are the Best Term Insurance Plans for Planning Retirement?

Why Term Insurance Is Important in times of COVID-19?

Why Married People Should Buy Term Insurance Under MWP Act?

How to Surrender Term Life Insurance When you have No Liabilities

How to Identify Term Insurance According to Your Needs?

Advantages & Disadvantages of Term Insurance in India

Why Buy Term Insurance Even at Rising Rates?

Why is it important to buy term insurance plan?

Tips to Choose the Right Term Period for Term Insurance Plan

Insurance Policy for Housewife In India

What Is a Passive Income? Why Should You Use It to Buy a Term Plan?

Busting Myths and Facts About Term Insurance Policies

Is Term Life Insurance Plan an Investment or Expense?

Steps on How to Buy Term Insurance Online

Can I Make Changes to My Term Insurance Policy Post Purchase?

How Much Cover Should I Take In A Term Plan?

Planning For Son or Daughter's Wedding

Buying A Term Insurance Plan? Take These Factors into Account

How Much Term Life Insurance Cover Do I Need in India?

Can You Increase Your Term Insurance Cover?

Does Term Insurance Cover Accidental Death?

Term Insurance with Critical Illness

Buying A Term Insurance? Don't Ignore the Claims Settlement Ratio

Can A Housewife Buy a Term Insurance Plan - All You Need to Know

Why Term Plan Should Be The First Step To Securing Your Future?

6 Reasons That Make Term Insurance a Must Buy

9 Most Frequently Asked Questions on Term Insurance

Planning For Children's Future

Individual Life Insurance vs. Group Term Life Insurance

Everything About Claim Settlement Ratio for Term Insurance

What are incremental term insurance plans?

Make Your Online Term Plan Your Familys Monthly Payout

When is the Right Time to Buy Term Life Insurance Policy for Yourself?

Different Types of Protection Plans

What is the Right Term Period For Term Insurance Policy? Here's How You Should Choose!

What Types of Deaths Are Covered in a Term Insurance Plan?

Should You Have Multiple Term Life Insurance Policies?

Choosing Riders for Insurance Plans

Can Term Insurance Plans Be Purchased As A Gift?

Which Death Type Does Your Term Plan Not Cover?

What is Insurance Premium - A Detailed Guide