Insurance Regulatory and Development Authority also called as IRDA, is the supreme authority that authorizes the functioning of insurance business in India. It was established by IRDA Act, 1999. The primary purpose of IRDA is to safeguard the interest of policyholders and also to ensure the growth of the insurance company in the country. In this blog we will discuss the various roles and functions of IRDA.
Objectives of IRDA
Following are the objectives of IRDA-
- To carry forward the interest of policyholders.
- To uphold the development of the insurance sector.
- Ensure quick resolution of claims
- Prevent frauds and malpractices
- To ensure fair conduct in the financial market when dealing with insurance.
Significance of IRDA Functions
IDA is an apex statutory body that regulates and develops the insurance sector in India. In India general insurance was first built in Kolkata in the year 1850. Since then various players in this market. Each organization rehearsed business on its own rates and rules. It made clients unreliable, which brought into question the validity of the insurance. With time the administration understood this reality and subsequently set up an autonomous administrative body called IRDA. After that new requests came out and the market was rushed and overflowed with he insurance products.
Functions of IRDA
Section 14 of the IRDA Act, 1999 gives the authority to ensure the regulation, development and promotion of the insurance business. Some of the essential functions of IRDA are as follows-
- To provide applicants with the registration certificate, renewal, modification, withdrawal, suspension or cancellation of such registration.
- To protect the interest of policyholders in case of assigning and nominating the policyholders, understanding insurance claims, insurable interests, surrender the value of the policy and other terms and conditions of the insurance contract.
- To mention required qualifications, code of conduct and practical training for intermediary/ insurance intermediaries and agents.
- To explain the code of conduct applicable to the surveyors as well as to the assessors.
- To ensure the efficiency and proficiency of the conduct of the insurance business.
- To levy charges in order to carry out the purpose of the act.
- To call for information, undertaking, inspection, conducting enquiries and investigations, including the audit of insurers, intermediaries, insurance intermediaries and other organizations connected with the insurance business.
- To regulate and control the rates, benefits, terms and conditions offered to the insurer pertaining to general insurance business not controlled and regulated by the tariff advisory committee under section 64U of the insurance act, 1938.
- To specify the way in which the books should be maintained and the manner in which the statement of accounts is to be rendered by insurers and other insurance companies.
- To maintain the investment funds by the insurance companies.
- Regulation of the maintenance of margin solvency.
- They decide the dispute among the insurers and the intermediaries of insurance intermediaries.
- To administer the functioning of the tariff advisory committee.
- Setting down the percentage premium income of the insurer of the finance scheme to promote and regulate the professional organizations.
- To safeguard the interest of the policyholder in case of assigning and nomination of policyholders.
- Setting out the percentage of life insurance business and general insurance business to be taken ahead by the insurer in the rural or social secor.
- To regulate the insurance industry in a way that ensures financial soundness of the applicable laws and regulations.
- To periodically frame laws to remove any scope of ambiguity in the insurance sector.
- To take action where the appropriate standards are inadequate or not enforced effectively.
- To grant, modify or suspend licenses for insurance companies.
- To perform such other functions of IRDA as may be prescribed.
Conclusion
There are some roles of IRDA. in an Indian economy there are many insurance companies that are coming in the market. Here IRDA has some special role to play. In order to keep the pace of the development the functions of IRDA should be performed accurately enough to provide every player with a fair deal and also to make sure that the customers also have a variety of plans to choose from.