Role of the IRDA in India

According to an Economic Times report, published on December 28, 2014, the Insurance Regulatory and Development Authority (IRDA) has specified that companies will have to become more transparent. This means that an insurance company will have to give a detailed definition of the conditions and benefits, along with the different product riders, to its customers. The new regulation endeavours to safeguard the customers against any false claims. The IRDA has gone on to say that such information should be available to the customers in the public domain. This includes all insurance products, including life insurance.

General Role of the Regulatory Authority

The IRDA has set a regulatory framework for the functioning of the insurance segment in the country, in order to protect the policy holder’s interests, while promoting efficiency in business conduct.

It also offers a platform for insured parties to come out with complaints against the insurer or the non-life or life insurance product, if and when needed. To this end, a grievance redressal cell has been set up to address specific issues.

To ensure that customers are provided with standard and quality services, the regulatory authority has given specifications on educational qualifications, practical training and code of conduct for agents and other intermediaries. The authority also adjudicates disputes between the insurer and the insured or any intermediary.

Duties and Powers under Section 14 of the IRDAI Act
Major powers and duties are exercised to safeguard the interests of the non-life or life insurance policy holders. Here are a few other areas of jurisdiction of the IRDA.

1. Issuing a certificate of registration to insurance companies. They are also in charge of modifying and renewing the same. The IRDA may exercise its powers to suspend, withdraw or cancel such a registration, given that there is sufficient reason.
2. The regulation and control of insurance advantages, premium rates and terms & conditions offered to consumers. This is in respect to the general insurance business, which is not under the stringent control of the Tariff Advisory Committee.
3. Power to call for information, conduct enquiries, commence investigation and undertake inspection of insurance companies. This includes audit of insurance companies, intermediaries and other such related parties.
4. Administrating the operations of the Tariff Advisory Committee, under section 64U and other related sections of the Insurance Act of 1938.
5. Stipulating the proportion of general insurance and life insurance business that can be undertaken up by an insurer in a particular sector.

The IRDA takes its responsibility to safeguard the interests of the consumer very seriously and to this end it is constantly reviewing and revising its guidelines for companies operating in the Indian insurance industry.