INTRODUCTION OF IRDA CONSTITUTION OF IRDA MISSION STATEMENT OF IRDA OBJECTIVES OF IRDA FUNCTIONS, DUTIES AND POWERS OF IRDA LAWS AND REGULATIONS PROCEDURE OF ISSUE OR RENEWAL

OF LICENSE BY IRDA QUALIFICATION OF THE APPLICANT

In april 1993, the government of India appointed a committee of Reforms in insurance sector with Shri. R.N. Malhotra, a former governor of Reserve Bank Government of India in January 1994.In accordance with the recommendations of the committee, the government set up a regulatory body known as “Insurance Regulatory and Development Authority” and enacted the Act known as Insurance Regulatory and Development Act, 1999.

IRDA consists of:i. A chairmanii. Not more than 5 whole time

membersiii. Not more than 4 part time members

to be appointed by central government.

To protect the interest of and secure fair treatment to policyholders.To bring about speedy and orderly growthTo set, promote monitor , and enforce high standards of integrity.To take actions where standards are inadequate or ineffectively enforced.To ensure speedy settlement of insured claims.

MISSION STATEMENT OF IRDAMISSION STATEMENT OF IRDA

i. Take care of the policyholders interest.ii. Open the insurance sector for private sector.iii. Ensure continued financial soundness and

solvency.iv. Regulate insurance and reinsurance

companies.v. Eliminate dishonesty and unhealthy

competition.vi. Supervise the activities of intermediaries.vii. Amend the insurance act 1938 ,the Life

Insurance Corporation Act1956, and the General Business Act1972.

OBJECTIVES OF IRDAOBJECTIVES OF IRDA

To issue certificate of registration. To protect the interests of the

policyholders. To specify requisite qualifications

code of conduct and training for insurance intermediaries and agents.

To specify code of conduct for Surveyors/ Loss Assessors.

FUNCTIONS, DUTIES & POWER OF IRDA

To promote efficiency in the conduct of insurance business.

To supervise the functioning of Tariff Advisory Committee. To regulate investment of funds by

the insurance companies. To undertake inspection, conduct

enquiries and investigations.

Functions Cont...

To specify the percentage of Life and General Insurance business. To promote and regulate professional organizations connected with the insurance and reinsurance. To specify the form and manner for maintenance of books of accounts.

Functions Cont…

To prescribe the manner and form in which accounts will be maintained and submitted by insurers and intermediaries. To regulate maintenance of margin of

solvency.

Functions Cont…

To levy fees & other charges for carrying out the purposes of this act.

To adjudication of disputes between insurers & intermediaries or insurance intermediaries.

To specify the percentage of premium income of the insurer financial schemes for promoting & regulating professional organization.

Insurance Act, 1938 Life Insurance Corporation Act, 1956 Insurance Regulatory and Development Authority Act,1999 Consumer Protection Act, 1986 Ombudsman Income Tax Act Marriage Women’s Property Act, 1874

LAWS AND REGULATIONS

The Insurance Act,1938 came into effect from 1st July 1939, and was amended in1950 and in 1999.

It has the following provisions: Licensing of agents and their remunerations Probhition of rebates Protection of policyholder’s interests Placing the limits on the expenses of insurers use of

funds and patterns of investments Maintaining solvency levels

INSURANCE ACT, 1938

• Constitution of Insurance Association and Insurance Councils and the Tariff Advisory Committee for General Insurance

Till 1999 the Controller of Insurance was responsible for the administration of Insurance Act.

Since 1999, the IRDA has replaced the Controller of Insurance. The Insurance Act vests the IRDA powers to:

Register insurance companies and also cancel their registrations

Insurance Act Cont…

Monitor and certify the soundness of the terms of life insurance business.

Make regulation relating to the conduct of the business of insurance.

Inspect documents of insurer Appoint additional directors Issue directions Takeover the management of an

insurer and appoint administrators.

Insurance Act Cont…

Adjudicate on disputes between insurers and intermediaries or between intermediaries.

Decide on disputes relating to settlement of claims of amounts not exceeding Rs.2000.

By the end of December 2006, the IRDA had issued more than 25 regulations and also issued several guidelines to insurers on a variety of matters.

Insurance Act Cont…

Basis for the establishment of LIC: Members- not more than 16. One of them being chairman, appointed

by Central Government. Section 30 gave LIC exclusive privilege to

transact life insurance business in India and ceased as a result of the amendments made in 1999.

16 insurance companies were registered and had commenced life insurance business till 31.8.2007

LIFE INSURANCE ACT,1956

IRDA is a corporate body which is passed in December 1999

It was establisheda) to protect the interests to holders of

insurance policies, b) to regulate, promote and ensure orderly

growth of the insurance industry. It also sought to amend a) the Insurance Act 1938,b) the Life Insurance Corporation Act 1956,c) the General Insurance Business Act,1972.

IRDA ACT, 1999

Members –not more than 25 It replaces the ‘Controller of Insurance’

to administer the provisions of Insurance Act.

It includes:a) Registrationb) Licensingc) Laying down regulations for proper conduct of business.

IRDA Act Cont…

A consumer can approach the various forums prescribed under the act for redress, in case he is not satisfied with the goods and services provided.

Consumer redress forums are established in each district in each state.

CONSUMER PROTECTION ACT,1986

complaints upto the value of

At district level-Rs. 20 lakh At state level-Rs. 1 crore The national commission will attend

matters beyond state level.

Consumer Protection Cont…

The governing body of the insurance council is authorized by law to appoint ombudsman for the insurance industry.

Not a judicial authority Function- to resolve complaints. Acts as counsel and mediator in matters Complaints may relate to:a) Partial or total repudiation of claimsb) Any dispute regarding premium paid or

payable

OMBUDSMAN

Any dispute on legal construction related to claims

Delay settlement of claims Non-issue of any insurance documents

to customers after receipts of premium.

Ombudsman Cont…

A complain can be made within one year after the insurer had rejected the representations.

Expected to make the recommendation within one month from the date of receipt of complains

Accepted-the insurer has to comply within 15 days. Not accepted: it will pass a award in writing stated the amount

awarded. Award has to be pass within 3 months. intimate acceptance-should be within one month

by a letter of acceptance to the insurer. Not intimate the acceptance- award cannot be

implemented.

HOW OMBUDSMAN DEALS WITH COMPLAINTS

relief from income tax liabilities Sum received under a life insurance policy

exempted from income tax subjected to the premium not more than 20% of SA.

The income of the assesses is reduced by aggregate amounts paid towards insurance premiums , up to max. Rs. 1 lakh.

Commuted values of pensions are exempt from income tax.

The wealth tax exempts life insurance policies: Premium more than 10 years or more Less than 10 years- proportionate value is

deducted.

INCOME TAX ACT 1961

Section 6 of this act provides that a policy of insurance effected by any married man on his own life and expressed on the face of it for the benefit of his wife and children, shall be deemed to be a trust for the benefit of his children and shall not be subject to control the life assured or his creditors or form part of his estate.

MARRIED WOMEN’S PROPERTY ACT, 1874

PROCEDURE Of ISSUE OR RENEWAL OF LICENSE BY IRDA

Application through designate person.

Fees payable by the applicant to the Authority.

Designated Person Grant or Renew

License is Granted or Renewed within period of 3 Months

Reason for refusing

If delayed within 60 days of receipt of the application, inform the applicant for reason.

Yes

NoDelay

Qualifications of the applicant

Population 5,000 or more

Any other place

Pass in 12th Std. or equivalent examination.

Pass in 10th Std. or equivalent examination.