Thursday, March 3, 2011

Insurance Regulatory & Development Authority

Powers and Functions of IRDA
  • It issues the applicants in insurance arena, a certificate of registration as well as renewal, modification, withdrawal, suspension or cancellation of such registrations.
  • It protects the interests of the policy holders in any insurance company in the matters related to the assignment of policy, nomination by policy holders, insurable interest, and resolution of insurance claim, submission value of policy and other terms and proposals in the contract.
  • It also specifies obligatory credentials, code of conduct and practical instructions for mediator as well as the insurance company. Apart from this, it also defines the code of conduct for the surveyors and loss assessors involved with the insurance business.
  • One of the major functions of IRDA includes endorsing competence in the insurance business. Apart from this, upholding and regulating professional organizations in insurance and re-insurance business is also a major duty of IRDA.
  • IRDA is also entitled to for asking information, undertaking inspection and investigating the audit of the insurers, mediators, insurance intermediaries and other organizations related to the insurance sector.
  • It is also concerned with the regulation of the rates, profits, provisions and conditions that may be offered by insurers in respect of general insurance business if it is not controlled or regulated by the Tariff Advisory Committee.
  • It is also entitled to supervise the functioning of the Tariff Advisory Committee.
  • IRDA specifies the terms and pattern in which books of accounts are to be maintained and statement of accounts shall be provided by insurers and other insurance mediators.
  • It also regulates investment of funds by insurance companies as well as the maintenance of margin of solvency.
  • It is also empowered to be involved in the arbitration of disagreements between insurers and intermediaries or insurance intermediaries.
  • It is meant to specify the proportion of premium income of the insurer to finance policies.
  • IRDA also specifies the share of life insurance business and general insurance business to be accepted by the insurer in the rural or social sector.
Impact Of IRDA On Indian Insurance Sector
The creation of IRDA has brought revolutionary changes in the Insurance sector. In last 10 years of its establishment the insurance sector has seen tremendous growth. When IRDA came into being; only players in the insurance industry were Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC), however in last decade 23 new players have emerged in the filed of insurance. The IRDA also successfully deals with any discrepancy in the insurance sector.