The Insurance Regulatory and Development Authority of india is autonomous body .
The Government of India was the regulator for the insurance industry until 2000. However, to institute a
stand-alone apex body, the IRDA was established in 2000 following the recommendation of the
Malhotra Committee report in 1999.
In August 2000, the IRDA began accepting applications for registrations through invites and allowed
companies from other countries to invest up to 26% in the market.
The IRDA has outlined several rules and regulations under Section 114A of the Insurance Act, 1938.
As of September 2020, there are 31 General Insurance companies and 24 Life Insurance companies who
are registered with the IRDA.
5. OBJECTIVE & MISSION
The main objective of the Insurance Regulatory and Development Authority of India is to enforce the
provisions under the Insurance Act. The mission statement of the IRDA is:
To protect the interest and fair treatment of the policyholder.
To regulate the insurance industry in fairness and ensure the financial soundness of the industry.
To regularly frame regulations to ensure the industry operates without any ambiguity.
As per the section 4 of IRDA Act' 1999, Insurance Regulatory and Development Authority specify the
composition of Authority,
The Authority is a ten member team consisting of
Five whole-time members
Four part-time members,(all appointed by the Government of India)
Tenure of office of chairperson and other members
1. The Chairperson and every other whole time member shall hold office for a term of five
years from the date on which he enters upon his office . Eligible for reappointment.
No person shall hold office as a Chairperson after he has attained the age of sixty-five years.
No person shall hold office as a whole time member after he has attained the age of sixty-two years
2. A part time member shall hold office for a term not exceeding five years from the date on
which he enters upon his office.
8. ROLES, POWERS & FUNCTIONS
The IRDA plays an integral role in emphasizing the importance of policyholders and their interest while
framing rules and regulations.
Here are the important roles of the IRDA:
To protect the policyholder’s interests.
To help speed up the growth of the insurance industry in an orderly fashion, for the benefit of the common
To provide long-term funds to speed up the nation’s economy.
To promote, set, enforce and monitor high standards of integrity, fair dealing, financial soundness and
competence of the insurance providers.
To ensure genuine claims are settled faster and efficiently.
To prevent malpractices and fraud, the IRDA has set up a grievance redress forum to ensure the
policyholder is protected.
To promote transparency, fairness and systematic conduct of insurance in the financial markets.
To build a dependable management system to make sure high standards of financial stability are followed
To take adequate action where such high standards are not maintained.
To ensure the optimum amount of self-regulation of the industry.
11. HOW DOES IRDA WORKS
Issues certificate of registration to new insurance companies.
Sets rules and regulations to ensure the interests of the policyholder are taken care of.
Monitors all claims are settled in all fairness and that no insurer will deny any claim on their own free will.
Regulates the code of conduct of the insurance companies, insurance intermediaries, and others associated
with the insurance industry.
Provides solutions in case of disputes through the IRDA ombudsman.
Controls and regulates the rates of insurance to prevent unwanted price hikes in the insurance premium.
The apex body is responsible for setting the minimum percentage limit of insurance companies for General
and Life Insurance, thereby developing both urban and rural sectors.
12. TYPES OF INSURENSCE REGULATED BY IRDA
Insurance is mainly divided into Life and Non-Life/General Insurance. These are further classified into
other types of insurance.
1. Life Insurance 2. General Insurance
Term Plans Health Insurance Policies
Endowment Policies Vehicle/Motor Insurance Policies
Unit-linked Insurance Policies Property Insurance Policies
Retirement Policies Travel Insurance Policies
Money-back Policies Gadget Insurance policies etc.
1. ADVISORY COMMITTEE
There are 23 member Appointed in a advisory committee drawn from various fields of economics,
insurance industry, chambers of commerce, accountancy, academics and agriculture.
The chairman of IRDA and members of the authority will be the ex-officio chairperson and
ex- officio members respectively of the Insurance Advisory Committee.
2. TARIFF ADVISORY COMMITTEE (TAC)
The TAC was set up as a statutory body under the Insurance Act 1938 primarily to calculate premium
for general insurance companies.
Today TAC controls and regulates the rates, advantages,terms and conditions that may be offered by
insurers in respect of Indian General Insurance Business relating to Fire, Marine (Hull), Motor, Engg.
And Workmen Compensation.
14. GRIEVANCE CELL
This cell of IRDA looks into the complaints from the policy holders.
It handles the complaints against life and non-life insurers separately.
Only cases of delay/ non-response relating to policies and claims are taken up the cell.
As policy contracts in dispute require adjudication and since IRDA does not carryout any adjudication,
a quasi-judicial channel is made available in the form of ‘Insurance Ombudsman’.
The institution of Insurance Ombudsman was created by a Government of India Notification dated 11th
November, 1998 with the purpose of quick disposal of the grievances of the insured customers and to
mitigate their problems involved in redresal of those grievances.
This institution is of great importance and relevance for the protection of interestsof policy holders and
also in building their confidence in the system.
The institution has helped to generate and sustain the faith and confidence amongs the consumers and
The governing body of insurance council issues orders of appointment of theinsurance Ombudsman on the
recommendations of the committee comprising of Chairman, IRDA, Chairman, LIC, Chairman, GIC and a
representative of the Central Government.
Insurance Ombudsman has two types of functions to perform
(1) conciliation, (2)Award making
. The insurance Ombudsman is empowered to receive and consider complaints in respect of personal
lines of insurance from any person who has and grievance against an insurer.