With the passing of years, the market has become competitive, as several insurers have begun to emerge in both the life and the non-life sector. It insecure customers and jeopardized their market reputation. Even as the government understood this, it first focused about safeguarding the interests of the consumer and therefore created an independent regulator, the IRDA. Over time, new demands have developed and many insurance products have flooded the market., IRDA oversees the development of the insurance sector and related activities to prevent damage to the family.
The Insurance Regulatory and Development Authority of India is responsible for the management and regulation of the re-insurance and insurance industries in India. IRDAI is a ten-member body—a chairman, five full-time and four part-time members. It was established in 1999 as an Act of Parliament and the headquarters of the Agency is located in Hyderabad.
In India, insurance is a developing industry. The Indian life insurance firms have seen an increase of 11,36%growth and Rs. 48.26 trillion in collective premium revenues over the end of March 2020 financial year.
Role of IRDAI
IRDA has a lot of roles. Some of the major ones are discussed below:
- IRDA has a major influence on policyholders’ protection the interests of the policyholders must be safeguarded and they must be equitable treatment. The IRDA issued the “Protection of Policyholders Interests” Regulation Act 2017. The insurers must have a policy authorized by the board, pursuant to this rule, to safeguard the interests of their policy holders according to some minimum criteria and process.
- A policy holder protection committee must also be established. The committee addresses different compliance concerns, keeps policyholders informed and aware of the various products of insurance. The committee is also responsible for ensuring that policyholders are aware of the processes for addressing complaints. The Committee reports directly to the board of directors of insurance companies. It must also monitor policy makers in order to guarantee that the interests of the common man are not compromised.
- There is a separate IRDA Consumer Education webpage for insurance educators. In order to make the public become more aware of the benefits of insurance.
- IRDA governs the insurance industry and ensures that the insurance market grows systematically and quickly. The primary focus is to protect the common man and to provide long-term funds for accelerating the growth of the economy.
- The Insurance Regulatory and Development Authority must approve all insurance firms before they introduce any new product or alter the existing product or remove a product.
- Insurers wishing to start a new product, modify or withdraw an existing product, should submit an application to the Authority, with the data required and the reasons for this modification, in the specified form.
- If requested, the Authority may request further information. The insurer can start marketing the product if no information is requested. After 60 days and 30 days, the insurer can launch the new package.
- Transfers of portfolios are highly important choices and demand IRDA particular attention. A fusion plan is required and then authorized by the IRDA. There is no longer a necessity. Following this stage, the policyholders must be promoted. Finally, if the transfer or merger is in the best interest of the policyholders, IRDA provides final permission.
- With increased consumer demand for innovative, advantageous and enhanced insurance products, insurers compete healthily. This serves the client as a benefit. The public sector designed to provide the private sector with strong competition for improved goods with attractive programmes.
- As consumers are increasingly aware of the insurance benefits, the fund flow has migrated from banks and postal offices to the insurance business. Instead of covering losses and risks, insurance has become a popular method of saving taxes.
From the above blog we can conclude that the key aspects of the Indian Insurance Regulatory and Development Authority are as follows: It acts as an insurance sector regulator. The apex body, under Section 114A of the Insurance Act of 1938 is set forth in its Rules and Regulations. It protects the interests of the insured. It supervises the operations of the insurance business to guarantee that insurers and purchasing companies continue to flourish. Under the Insurance Act, new insurance firms operating in India are tasked with the certification of registration.