Creating Consumer Awareness in Life Insurance

70 q Bimaquest - Vol.
VIII Issue I, January 2008

Creating Consumer Awareness in Life Insurance
Consumer awareness as a concept is of universal concern for all economies of the world. In
the context of a booming Indian economy and unprecedented growth being witnessed by
Insurance industry - specially life insurance -, it would be interesting to examine this concept
in depth. Such a study will provide rare insights as to how to harness huge untapped market
potential for life insurance to the benefit of vast rural and semi urban populace, as was
envisaged by C.D. Deshmukh when Government of India nationalized life insurance business
in 1956. And how to expand the reach of life insurance to every nook and corner of India and
provide basic sense of security to masses.
Low penetration of insurance in India , as else where, has varied explanations, economic and
sociological. One basic factor that puts a brake on growth is low propensity to consume: low
propensity for life insurance , not necessarily because of considerations of affordability nor
because of inadequate range of insurance products and services. The major determining
factor is lack of awareness of life insurance per se. And this phenomenon is not confined to
rural and semi rural segments of society: it pervades urban populace as well. Surprising, isn’t
it- but true.
Consumer awareness is the mainspring of demand creation which runs the wheels of industry
– any industry for that matter. To this ‘demand’ curve, suppliers and service providers respond,
by making available to consumers what they want, meeting their needs and expectations.
This is the way two usages ‘customer needs’ and ‘ customer satisfaction’ emerged. And
these later travelled to domains of ‘customer delight’ and ‘customer ecstacy’.
Consumer awareness, thus, becomes the genesis for business entities . For life insurers to
initiate, expand, grow and sustain by responding to larger and larger volumes of demand
emerging with greater awareness, and setting in place supply chain management.
For life insurers to penetrate significantly and forge ahead in the emerging market , enhancing
consumer awareness becomes the prime focus of all activities. As also strength and
CREATING CONSUMER AWARENESS IN

LIFE INSURANCE *
Rajni M. Shah
Former G.M., GIC., Senior Consultant
* Paper Presented at the C.D.Deshmukh Seminar on “Creating Consumer Awareness in Life
Insurance held at NIA on 10-11 Sept. 2007
Bimaquest - Vol. VIII Issue I, January 2008 q 71
competencies to ‘compete for future’ as Prof. C.K. Prahalad , University of Michigan, Ross
Business School, USA, propounds in his best seller by this title.
How to go about
Life insurers, both in public sector and private sector, should appreciate this ‘moment of
truth’ so to say and galvanize their energies and resources intelligently to bring about greater
consumer awareness as a basic facilitator and an important constituent of business strategy.
This will create synergy all across the organization.
It should be appreciated that Consumer awareness provides a new frame of reference for
value creation as also an opportunity for innovation. It is time to think out of ‘In box’ and
adopt novel strategies and measures to foster awareness. To mention a few:
a. launch awareness movement through various convenient people-oriented programmes.
Through media, corporate publicity, rural camps and popular communication channels
including Radio, TV, Publicity Vans;
b. awareness of products and services though visuals that trigger curiosity and manifest
in terms of desire and later sale-purchase transactions;
c. beyond these stages, to take up awareness of other aspects such as product, price,
quality, service , convenience, status, pride, joy and ease;
d. campaigns to educate rural and semi urban masses on the need for security that protects
their livelihood, security for produce and belongings and create feel-good feelings;
e. engage NGOs with proven credentials and rural intermediaries.
In summary, as life insurers ( and similarly non-life insurers) get into such massive efforts to
reach out to all and sundry, a new phenomenon will emerge to their delight viz., opening up
promising avenues for ‘creation of new markets’ – the basic fundamental and prerequisite
for sustainable growth. Market dynamics will rule and unfold a stage through a process of
evolution ‘new value creation’ – the sum total of all innovations. Thereby a new phenomenon
of ‘co-creating unique value with customers’ will emerge as so brilliantly expounded by Prof.
C.K. Prahalad in his later path-breaking Title “ The Future of Competition : Co-creating
Unique Value with Customers”.
72 q Bimaquest - Vol. VIII Issue I, January 2008
Let me conclude by putting across two well-known propositions that underline ‘ consumer
awareness’:
“ customer is business, business is people, people are customers”
“ satisfying a customer is everybody’s business”
This phenomenon – creating Consumer awareness – I submit, is the biggest challenge that
also offers unsurpassed opportunities. It is time to embrace the future.
Healthcare Insurance Awareness in

India
About Healthcare Insurance Awareness in India
 Article
 Comments (1)

Insurance may be described as a social device to reduce or eliminate risk of life and property.
Under the plan of insurance, a large number of people associate themselves by sharing risk,
attached to individual insurance plan that exclusively covers healthcare costs and is called Health
Insurance.
Since the past two decades, there has been a phenomenal surge in acceleration of healthcare
costs. This has compelled individuals to have a re-look on their actual monthly expenditures,
spending patterns and simultaneously allocate a proportion of their income towards personal
healthcare. This has resulted in individuals availing healthcare insurance coverage not only for
themselves but also for their family members including their dependants. In short, healthcare
insurance provides a cushion against medical emergencies. The concept of insurance is closely
concerned with security. Insurance acts as a shield against risks and unforeseen circumstances.
In general, by and large, Indians are traditionally risk-averse rather than risk lovers by nature.
Some major health insurance companies in India include National Insurance Company, New
India Assurance, United India Insurance, ICICI Lombard, Tata AIG, Royal Sundaram, Star
Allied Health Insurance, Cholamandalam DBS, Bajaj Allianz Apollo, AG Health Insurance
Company among others.
Categories
Indian Health Insurance is primarily classified into 2 categories:
• Cashless Hospitalization
• Medical Reimbursement
a) Cashless Hospitalization
Cashless hospitalization is a specialized service provided by an insurer wherein an individual is

not required to pay the hospitalization expenses at the time of discharge from the concerned
hospital. The settlement is done directly by the insurance company (or insurer). However, prior
approval is a must from the TPA (Third Party Administrator) before availing the benefits under
this option.
Cashless hospitalization can be of two types:
• Planned hospitalization: This is a planned hospitalization wherein the insured is aware of the
hospitalization in advance. This duration period may vary from case to case. Examples include:
FTND (Full Term Normal Delivery), Chemotherapy treatment for carcinoma (cancer), for
cataract surgery, tonsillectomy (removal of tonsils).
• Emergency hospitalization: It is a sudden hospitalization that may be either an emergency or

due to unforeseen circumstances. In short, hospitalization is not anticipated in advance.
Examples include RTA (Road Traffic Accident), Myocardial infarction (heart attack), Acute
Appendicitis.
b) Medical Reimbursement
Re-imbursement means to repay or to compensate. Thus, Medical Re-imbursement means to

repay the products/services availed during hospitalization and more importantly after the
completion of the treatment.
Under this procedure, the insured has to bear the entire expenses incurred during hospitalization.
After getting discharged from hospital, the insured/policy holder can claim medical
reimbursement. For availing benefits under this option, the insured has to approach the
concerned TPA under which he/she is covered, fill the requisite form and satisfy all the
requirements as mentioned. This includes submission of TPA card, policy paper, discharge
summary, prescriptions, diagnostic laboratory reports, OPD treatment details etc. A sum is
granted as reimbursement for treatment expenses.
A recent survey conducted in 2008 showed that only 3% of the entire Indian population has
availed some sort of insurance policy and enjoys benefits included under its coverage. This
miniscule percentage constitutes both – PSUs (Public Sector Undertakings) and Private
insurance companies. Since, the general public are by and large ignorant about the benefits of
availing healthcare insurance policies, there lies an urgent need to educate the masses regarding
the importance of Healthcare Insurance and the benefits derived on account of it.
There are numerous reasons for not availing health insurance. There is a lack of knowledge
regarding the existing insurance products/services in the markets. On top of it, there are
numerous misconceptions about Insurance prevalent in the Indian Markets. Also there are
numerous fly-by-night agents out to fleece the gullible Indian public.
In India, public funded healthcare is available only to a miniscule section of BPL (Below Poverty
Line) groups, low-income groups and to government employees. The Indian Government has
formulated Employee State Insurance Scheme (ESIS) that focuses on the public healthcare
policy for low-income groups. The government employees can avail Central Government Health
Scheme (CGHS) that offers medical treatment at a subsidized cost.
With the opening up of insurance sector for private participation, numerous players have entered
the healthcare segment, but inspite of the entry of private sector, penetration of insurance
coverage in India is abysmally low. Recently a legislature has been passed in the Indian
Parliament allowing 49% of FDI in insurance industry.
Essential Guidelines for Availing individual Health Insurance Policy:
The following points should be borne in mind while purchasing an individual health policy:
• Understanding the policy coverage: The policyholder should be able to clearly comprehend
the extent of medical coverage being offered under the particular health insurance policy before
opting for it. The individual should check whether pre-existing diseases and its resultant
complications are covered or not, as well as the extent of the coverage under that particular
policy.
• Keeping an eye for medical expenses that are not covered/re-imbursable under the policy:
Before availing a particular health insurance policy, the prospective policyholder should note the
medical expenses not covered under that Insurance policy. It is important to note that deductibles
are a part and parcel of any insurance coverage and the expenses incurred as part of the medical
treatment need to be borne by the individual. Generally this list includes aprons, sterilization
charges, gloves, Dettol, gloves etc.
• To understand whether it is a co-insurance policy: Before availing a health policy, the

prospective customer should understand whether it is a co-insurance policy or not. It is advisable
to get an individual health insurance policy with a co-insurance payment option. The maximum
amount does not exceed 15% of the entire medical coverage for a particular disease.
• Understanding and updating oneself about expiry period regarding the policy cover: An
individual health insurance cover entails regular premium payments on a monthly, half yearly or
annual basis before the expiry of a particular policy. Non-payment of premium within the
stipulated time results in the lapsing of the policy with subsequent break in the policy coverage
of the concerned individual. Even though the concerned individual holds policy with an
Insurance company for many years together, a break in the policy coverage (which generally
does not exceed more than 15 days) is treated as a fresh policy cover.
Importance of Health Insurance
The importance of Health Insurance can never be undervalued for the following reasons:
• Provides security to human life which is of prime importance to any individual.
• Closely bonds Insurance Companies, Hospitals, Policyholders and TPAs together for the
benefit of Indian masses.
• An answer to the solution of uncertainties and risks that are prevalent and ever-pervading in
human life.
• Prevention and minimization of unforeseen losses.
• Access to quality healthcare.
• Means of savings and a safe investment option.
• Provides financial stability in life.
• A tax-saving instrument that significantly contributes in reduction of tax deductions.
• Reduces tensions and stress caused on account of hospitalization.
• Greatly contributes in leading a stress-free life.
Fortis Healthcare Plans Major Service

Expansion in Field of Diabetes
by Kathy Jones on December 28, 2010 at 9:12 PM
Hospital News
 Comments

Fortis Healthcare revealed that it will be opening up a number of Speciality Medical Centres
across the country as part of its efforts to provide quality healthcare services especially in the
field of diabetes, metabolic diseases and endocrinology.
Fortis Healthcare CEO Bhavdeep Singh revealed that the venture, which comes under a special
purpose vehicle, Fortis C-DOC Healthcare Private Limited, has been launched in partnership
with one of the world’s leading diabetes expert, Professor Anoop Mishra who has also been
appointed as the executive chairman of the company.
The centers are expected to provide specialty services for diabetes, obesity, women’s hormonal
disorders and brain related endocrine disorders.
“This is one of the many innovative offerings from Fortis; all of which are aimed to improve
medical access and bring about patient-centric approach in healthcare”, Singh added.
Health Insurance Will Cover Every Indian

by Dr. Trupti Shirole on January 17, 2011 at 4:56 PM
Health Insurance News

News
 Comments

The Government is planning a health insurance scheme that will cover every Indian. This public-
funded scheme is likely to be introduced in the 12th Five Year Plan, starting in 2012-13. Prime
Minister Manmohan Singh has appointed a committee of experts that is headed by the chief of
the Public Health Foundation of India, K. Srinath Reddy. At present over 90% Indians are not
covered by any health insurance scheme (public or private). Most private health insurance
schemes cover only hospitalization but this scheme is likely to cover hospitalization expenses
along with treatment undergone at listed hospitals. It will also provide cover for conditions like
heart ailments and pregnancy, which the private schemes generally do not cover.
According to the National Sample Survey Office, an Indian spends about 80 % of his health
expenses on buying medicine. Health services become unaffordable to many due to the high cost
of treatment. Planning Commission member secretary Sudha Pillai said, "We are looking at a
scheme where people will pay premium depending on their income. For instance, the
government may pay the entire premium for those below poverty line (BPL). For the better off,
the government's contribution will diminish the higher the individual's income." The scheme also
intends the Government to pay a higher premium for women.
Presently there is a health insurance scheme under the Rashtriya Swasth Bima Yojana which
covers close to 6crore BPL families. In the next step involves the enrollment of all those under
the Mahatma Gandhi National Rural Employment Guarantee Scheme. This will be followed by
women enrolled in over 10 lakh angwanwadi centers around the country.
Source-Medindia
Insurance Regulatory and Development

Authority
From Wikipedia, the free encyclopedia
Jump to: navigation, search
It has been suggested that N Rangachary be merged into this article or section. (Discuss)
The Insurance Regulatory and Development Authority (IRDA) is a national agency of the
Government of India, based in Hyderabad. It was formed by an act of Indian Parliament known
as IRDA Act 1999, which was amended in 2002 to incorporate some emerging requirements.
Mission of IRDA as stated in the act is "to protect the interests of the policyholders, to regulate,
promote and ensure orderly growth of the insurance industry and for matters connected therewith
or incidental thereto."
In 2010, the Government of India ruled that the Unit Linked Insurance Plans (ULIPs) will be
governed by IRDA, and not the market regulator Securities and Exchange Board of India.[1]
Contents
[hide]
 1 ' Expectations
 2 Duties,Powers and Functions of IRDA
 3 Advisory committee
 4 Chairman selection process
 5 References
 6 External links
[edit] ' Expectations

The law of India has following expectations from IRDA...
1. To protect the interest of and secure fair treatment to policyholders.

2. To bring about speedy and orderly growth of the insurance industry (including annuity and
superannuation payments), for the benefit of the common man, and to provide long term funds
for accelerating growth of the economy.
3. To set, promote, monitor and enforce high standards of integrity, financial soundness, fair
dealing and competence of those it regulates.
4. To ensure that insurance customers receive precise, clear and correct information about
products and services and make them aware of their responsibilities and duties in this regard.
5. To ensure speedy settlement of genuine claims, to prevent insurance frauds and other
malpractices and put in place effective grievance redressal machinery.
6. To promote fairness, transparency and orderly conduct in financial markets dealing with
insurance and build a reliable management information system to enforce high standards of
financial soundness amongst market players.
7. To take action where such standards are inadequate or ineffectively enforced.
8. To bring about optimum amount of self-regulation in day to day working of the industry
consistent with the requirements of prudential regulation.
Duties,Powers and Functions of IRDA

Section 14 of IRDA Act, 1999 laysdown the duties,powers and functions of IRDA
1. Subject to the provisions of this Act and any other law for the time being in force, the Authority
shall have the duty to regulate, promote and ensure orderly growth of the insurance business
and re-insurance business.
2. Without prejudice to the generality of the provisions contained in sub-section (1), the powers
and functions of the Authority shall include,
1. issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or
cancel such registration;
2. protection of the interests of the policy holders in matters concerning assigning of
policy, nomination by policy holders, insurable interest, settlement of insurance claim,
surrender value of policy and other terms and conditions of contracts of insurance;
3. specifying requisite qualifications, code of conduct and practical training for
intermediary or insurance intermediaries and agents;
4. specifying the code of conduct for surveyors and loss assessors;
5. promoting efficiency in the conduct of insurance business;
6. promoting and regulating professional organisations connected with the insurance and
re-insurance business;
7. levying fees and other charges for carrying out the purposes of this Act;
8. calling for information from, undertaking inspection of, conducting enquiries and
investigations including audit of the insurers, intermediaries, insurance intermediaries
and other organisations connected with the insurance business;
9. control and regulation of the rates, advantages, terms and conditions that may be
offered by insurers in respect of general insurance business not so controlled and
regulated by the Tariff Advisory Committee under section 64U of the Insurance Act,
1938 (4 of 1938);
10. specifying the form and manner in which books of account shall be maintained and
statement of accounts shall be rendered by insurers and other insurance intermediaries;
11. regulating investment of funds by insurance companies;
12. regulating maintenance of margin of solvency;
13. adjudication of disputes between insurers and intermediaries or insurance
intermediaries;
14. supervising the functioning of the Tariff Advisory Committee;
15. specifying the percentage of premium income of the insurer to finance schemes for
promoting and regulating professional organisations referred to in clause (f);
16. specifying the percentage of life insurance business and general insurance business to
be undertaken by the insurer in the rural or social sector; and
17. exercising such other powers as may be prescribed from time to time,
Advisory committee
IRDA consists of a Chairman and some permanent as well as part time members. The
regulations, however, are enacted under the guidance of a statutory advisory committee. The
advisory committee consists of following individuals and ex-officio authorities:
 Chairman: Hari Narayana is the current Chairman of IRDA.

 Full-time Members: Currently, they are Mr K K Srinivasan (Nonlife Member), Sri G Prabhakara
(Life Member), Dr R Kannan(Member, Actuary) and Sri R.K. Nair (Member, F & I). There is
provision for a panel of other members and part time members. IRDA formed a high powered
Insurance Law Reforms Committee known as KPN Committee with important insurance advisors
like Mr N Govardhan and Dr K C Mishra as its members. There were also a few non-advisory
committee members like Mr Liaquat Khan and Mr T Viswanathan etc.
Full force and utility of various institutions like Advisory Committee and self-regulatory
organizations are not yet realized as the regulator seems to be in a long learning mode. Due to
over delegations, Individual incumbents decide the pace and extent of utilization of prudential
and statutory bodies. Research is limited to opinion seeking through legacy channels. Market
waits for revision of insurance act and establishment meaningfully functioning regulatory organs
devoid of excess delegation and subjective localization of development agencies.
IRDA Journal is available as soft copy in its website.[2] Unlike other Indian administrative
Regulatory Agencies IRDA is perceived as a silent regulator with activities confined to its local
existence.
Chairman selection process

Government of India has circulated to broadbase IRDA chairman selection process. It is felt in
the market that placing of retired civil servants as IRDA Chairman has served the purpose of
administrative fiefdom of the regulator. Mostly, the regulator has become passive to market
realities and most of the original public policy intentions have been systematically replaced by
personal preferences. There seems to be no oversight of public policy erosions. Taking
advantage of the completion of term of current incumbent, there seem to be an attempt to correct
the future course but people do not perceive any outcome to result as the market does not seem to
throw up candidates of the stature of Howard Davies for Indian market. But a right leadership is
the solution to the requirement of this booming market.
References
1. ^ "Irda wins Ulip battle". Business Standard. 20 June 2010. http://www.business-
standard.com/india/storypage.php?autono=398840. Retrieved 2010-06-20.
2. ^ IRDA Journal.
External links
 IRDA official website
 The IRDA Act'1999
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY ACT, 1999

An Act
To provide for the establishment of an Authority to protect the interests of holders of insurance policies, to
regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or
incidental thereto and further to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the
General Insurance Business(Nationalisation) Act, 1972.
BE it enacted by Parliament in Fiftieth Year of Republic of India as follows:-

CHAPTER I
PRELIMINARY

1. SHORT TITLE, EXTENT AND COMMENCEMENT.---(1) This Act may be called the Insurance
Regulatory and Development Authority Act, 1999.
(2) It extends to the whole of India.
(3) It shall come into force on such date as the Central Government may, by notification in the Official
Gazette, appoint:
Provided that different dates may be appointed for different provisions of this Act and any reference in any such
provision to the commencement of this Act shall be construed as a reference to the coming into force of that
provision.

2. DEFINITIONS.--- (1) In this Act, unless the context otherwise requires, -
(a) "appointed day" means the date on which the Authority is established under sub-section (1) of section 3;
(b) "Authority" means the Insurance Regulatory and Development Authority established under sub-section
(1) of section 3;
(c) "Chairperson" means the Chairperson of the Authority;
(d) "Fund" means the Insurance Regulatory and Development Authority Fund constituted under sub-section
(1) of section 16;
(e) "Interim Insurance Regulatory Authority" means the Insurance Regulatory Authority set up by the
Central Government through Resolution No.17(2)/94-Ins-V, dated the 23rd January, 1996;
(f) "intermediary or insurance intermediary" includes insurance brokers, reinsurance brokers, insurance
consultants, surveyors and loss assessors;
(g) "member" means a whole time or a part time member of the Authority and includes the Chairperson;
(h) "notification" means a notification published in the Official Gazette;
(i) "prescribed" means prescribed by rules made under this Act;
(j) "regulations" means the regulations made by the Authority.
(2) Words and expressions used and not defined in this Act but defined in the Insurance Act, 1938 (4 of
1938) or the Life Insurance Corporation Act, 1956 (31 of 1956) or the General Insurance Business
(Nationalisation) Act, 1972 (57 of 1972) shall have the meanings respectively assigned to them in those Acts.

CHAPTER II
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

3. ESTABLISHMENT AND INCORPORATION OF AUTHORITY.-- (1) With effect from such date
as the Central Government may, by notification, appoint, there shall be established, for the purposes of this Act, an
Authority to be called "the Insurance Regulatory and Development Authority".
(2) The Authority shall be a body corporate by the name aforesaid having perpetual succession and a
common seal with power, subject to the provisions of this Act, to acquire, hold and dispose of property, both
movable and immovable, and to contract and shall, by the said name, sue or be sued.
(3) The head office of the Authority shall be at such place as the Central Government may decide from time
to time.
(4) The Authority may establish offices at other places in India.

4. COMPOSITION OF AUTHORITY.--- The Authority shall consist of the following members, namely:-
(a) a Chairperson;
(b) not more than five whole-time members;
(c) not more than four part-time members,
to be appointed by the Central Government from amongst persons of ability, integrity and standing who have
knowledge or experience in life insurance, general insurance, actuarial science, finance, economics, law,
accountancy, administration or any other discipline which would, in the opinion of the Central Government, be
useful to the Authority:
Provided that the Central Government shall, while appointing the Chairperson and the whole-time members, ensure
that at least one person each is a person having knowledge or experience in life insurance, general insurance or
actuarial science, respectively.

5. 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 and shall be eligible for reappointment:
Provided that no person shall hold office as a Chairperson after he has attained the age of sixty-five years:
Provided further that 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.
(3) Notwithstanding anything contained in sub-section (1) or sub-section (2), a member may -
(a) relinquish his office by giving in writing to the Central Government notice of not less than
three months; or
(b) be removed from his office in accordance with the provisions of section

6. REMOVAL FROM OFFICE.---(1) The Central Government may remove from office any member
who-
(a) is, or at any time has been, adjudged as an insolvent; or
(b) has become physically or mentally incapable of acting as a member; or
(c) has been convicted of any offence which, in the opinion of the Central Government, involves
moral turpitude; or
(d) has acquired such financial or other interest as is likely to affect prejudicially his functions as a
member; or
(e) has so abused his position as to render his continuation in office detrimental to the public
interest.
(2) No such member shall be removed under clause (d) or clause (e) of sub-section (1) unless he has been
given a reasonable opportunity of being heard in the matter.

7. SALARY AND ALLOWANCES OF CHAIRPERSON AND MEMBERS.--(1) The salary and allowances
payable to, and other terms and conditions of service of, the members other than part-time members shall be such
as may be prescribed.
(2) The part-time members shall receive such allowances as may be prescribed.
(3) The salary, allowances and other conditions of service of a member shall not be varied to his
disadvantage after appointment.

8. BAR ON FUTURE EMPLOYMENT OF MEMBERS.-- The Chairperson and the whole-time
members shall not, for a period of two years from the date on which they cease to hold office as such, except with
the previous approval of the Central Government, accept-
(a) any employment either under the Central Government or under any State Government; or
(b) any appointment in any company in the insurance sector.

9. ADMINISTRATIVE POWERS OF CHAIRPERSON.-- The Chairperson shall have the powers of
general superintendence and direction in respect of all administrative matters of the Authority.

10. MEETINGS OF AUTHORITY.--(1) The Authority shall meet at such times and places and shall
observe such rules and procedures in regard to transaction of business at its meetings (including quorum at such
meetings) as may be determined by the regulations.
(2) The Chairperson, or if for any reason he is unable to attend a meeting of the Authority, any other member
chosen by the members present from amongst themselves at the meeting shall preside at the meeting.
(3) All questions which come up before any meeting of the Authority shall be decided by a majority of votes
by the members present and voting, and in the event of an equality of votes, the Chairperson, or in his absence, the
person presiding shall have a second or casting vote.
(4) The Authority may make regulations for the transaction of business at its meetings.

11. VACANCIES, ETC., NOT TO INVALIDATE PROCEEDINGS OF AUTHORITY.---No act or
proceeding of the Authority shall be invalid merely by reason of -
(a) any vacancy in, or any defect in the constitution of, the Authority; or
(b) any defect in the appointment of a person acting as a member of the Authority; or
(c) any irregularity in the procedure of the Authority not affecting the merits of the case.

12. OFFICERS AND EMPLOYEES OF AUTHORITY.--- (1) The Authority may appoint officers and
such other employees as it considered necessary for the efficient discharge of its function under this Act.
(2) The terms and other conditions of service of officers and other employees of the Authority appointed
under sub-section(1) shall be governed by regulations made under this Act.

CHAPTER III
TRANSFER OF ASSETS, LIABILITIES, ETC., OF INTERIM INSURANCE REGULATORY
AUTHORITY

13. TRANSFER OF ASSETS, LIABILITIES, ETC., OF INTERIM INSURANCE REGULATORY
AUTHORITY.-- On the appointed day,-
(a) all the assets and liabilities of the Interim Insurance Regulatory Authority shall stand
transferred to, and vested in, the Authority.
Explanation - The assets of the Interim Insurance Regulatory Authority shall be deemed to include all rights and
powers, and all properties, whether movable or immovable, including, in particular, cash balances, deposits and all
other interests and rights in, or arising out of, such properties as may be in the possession of the Interim Insurance
Regulatory Authority and all books of account and other documents relating to the same; and liabilities shall be
deemed to include all debts, liabilities and obligations of whatever kind;
(b) without prejudice to the previous of clause(a), all debts, obligations and liabilities incurred, all
contracts entered into and all matters and things engaged to be done by, with or for the Interim Insurance
Regulatory Authority immediately before that day, for or in connection with the purpose of the said Regulatory
Authority, shall be deemed to have been incurred, entered into or engaged to be done by, with or for, the Authority;
(c) all sums of money due to the Interim Insurance Regulatory Authority immediately before that
day shall be deemed to be due to the Authority; and
(d) all suits and other legal proceedings instituted or which could have been instituted by or against
the Interim Insurance Regulatory Authority immediately before that day may be continued or may be instituted by
or against the Authority.

CHAPTER IV
DUTIES, POWERS AND FUNCTIONS OF AUTHORITY

14. DUTIES, POWERS AND FUNCTIONS OF AUTHORITY.--(1) Subject to the provisions of this Act
and any other law for the time being in force, the Authority shall have the duty to regulate, promote and ensure
orderly growth of the insurance business and re-insurance business.
(2) Without prejudice to the generality of the provisions contained in sub-section (1), the powers and
functions of the Authority shall include, -
(a) issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such
registration;
(b) protection of the interests of the policy holders in matters concerning assigning of policy, nomination
by policy holders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and
conditions of contracts of insurance;
(c) specifying requisite qualifications, code of conduct and practical training for intermediary or
insurance intermediaries and agents;
(d) specifying the code of conduct for surveyors and loss assessors;
(e) promoting efficiency in the conduct of insurance business;
(f) promoting and regulating professional organisations connected with the insurance and re-insurance
business;
(g) levying fees and other charges for carrying out the purposes of this Act;
(h) calling for information from, undertaking inspection of, conducting enquiries and investigations
including audit of the insurers, intermediaries, insurance intermediaries and other organisations connected with the
insurance business;
(i) control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in
respect of general insurance business not so controlled and regulated by the Tariff Advisory Committee under
section 64U of the Insurance Act, 1938 (4 of 1938);
(j) specifying the form and manner in which books of account shall be maintained and statement of
accounts shall be rendered by insurers and other insurance intermediaries;
(k) regulating investment of funds by insurance companies;
(l) regulating maintenance of margin of solvency;
(m) adjudication of disputes between insurers and intermediaries or insurance intermediaries;
(n) supervising the functioning of the Tariff Advisory Committee;
(o) specifying the percentage of premium income of the insurer to finance schemes for promoting and
regulating professional organisations referred to in clause (f);
(p) specifying the percentage of life insurance business and general insurance business to be undertaken
by the insurer in the rural or social sector; and
(q) exercising such other powers as may be prescribed.

CHAPTER V
FINANCE, ACCOUNTS AND AUDIT

15. GRANTS BY CENTRAL GOVERNMENT.-- The Central Government may, after due appropriation
made by Parliament by law in this behalf, make to the Authority grants of such sums of money as the Government
may think fit for being utilised for the purposes of this Act.

16. CONSTITUTION OF FUNDS.--(1) There shall be constituted a fund to be called "the Insurance
Regulatory and Development Authority Fund" and there shall be credited thereto-
(a) all Government grants, fees and charges received by the Authority;
(b) all sums received by the Authority from such other source as may be decided upon by the Central
Government;
(c) the percentage of prescribed premium income received from the insurer.
(2) The Fund shall be applied for meeting -
(a) the salaries, allowances and other remuneration of the members, officers and other employees of the
Authority;
(b) the other expenses of the Authority in connection with the discharge of its functions and for the
purposes of this Act.

17. ACCOUNTS AND AUDIT.-- (1) The Authority shall maintain proper accounts and other relevant
records and prepare an annual statement of accounts in such form as may be prescribed by the Central Government
in consultation with the Comptroller and Auditor-General of India.
(2) The accounts of the Authority shall be audited by the Comptroller and Auditor-General of India at such
intervals as may be specified by him and any expenditure incurred in connection with such audit shall be payable
by the Authority to the Comptroller and Auditor-General.
(3) The Comptroller and Auditor-General of India and any other person appointed by him in connection with
the audit of the accounts of the Authority shall have the same rights, privileges and authority in connection with
such audit as the Comptroller and Auditor-General generally has in connection with the audit of the Government
accounts and, in particular, shall have the right to demand the production of books of account, connected vouchers
and other documents and papers and to inspect any of the offices of the Authority.
(4) The accounts of the Authority as certified by the Comptroller and Auditor-General of India or any other
person appointed by him in this behalf together with the audit-report thereon shall be forwarded annually to the
Central Government and that Government shall cause the same to be laid before each House of Parliament.

CHAPTER VI
MISCELLANEOUS

18. POWER OF CENTRAL GOVERNMENT TO ISSUE DIRECTIONS.-- (1) Without prejudice to
the foregoing provisions of this Act, the Authority shall, in exercise of its powers or the performance of its
functions under this Act, be bound by such directions on questions of policy, other than those relating to technical
and administrative matters, as the Central Government may give in writing to it from time to time.
PROVIDED that the Authority shall, as far as practicable, be given an opportunity to express its views before any
direction is given under this sub-section.
(2) The decision of the Central Government, whether a question is one of policy or not, shall be final.

19. POWER OF CENTRAL GOVERNMENT TO SUPERSEDE AUTHORITY.--(1) If at any time the
Central Government is of the opinion-
(a) that, on account of circumstances beyond the control of the Authority, it is unable to discharge the
functions or perform the duties imposed on it by or under the provisions of this Act, or
(b) that the Authority has persistently defaulted in complying with any direction given by the Central
Government under this Act or in the discharge of the functions or performance of the duties imposed on it by or
under the provisions of this Act and as a result of such default the financial position of the Authority or the
administration of the Authority has suffered; or
(c) that circumstances exist which render it necessary in the public interest so to do,
the Central Government may, be notification and for reasons to be specified therein, supersede the Authority for
such period, not exceeding six months, as may be specified in the notification and appoint a person to be the
Controller of Insurance under section 2B of the Insurance Act, 1938 (4 of 1938), if not already done :
Provided that before issuing any such notification, the Central Government shall give a reasonable opportunity to
the Authority to make representations, if any, of the Authority.
(2) Upon the publication of a notification under sub-section(1) superseding the Authority, -
(a) the Chairperson and other members shall, as from the date of supersession, vacate their offices as
such;
(b) all the powers, functions and duties which may, by or under the provisions of this Act, be exercised or
discharged by or on behalf of the Authority shall, until the Authority is reconstituted under sub-section(3), be
exercised and discharged by the Controller of Insurance; and
(c) all properties owned or controlled by the Authority shall, until the Authority is reconstituted under
sub-section(3), vest in the Central Government.
(3) On or before the expiration of the period of supersession specified in the notification issued under sub-
section(1), the Central Government shall reconstitute the Authority by a fresh appointment of its Chairperson and
other members and in such case any person who had vacated his office under clause(a) of sub-section(2) shall not
be deemed to be disqualified for reappointment.
(4) The Central Government shall cause a copy of the notification issued under sub-section(1) and a full
report to any action to be laid before each House of Parliament at the earliest.

20. FURNISHING OF RETURNS, ETC., TO CENTRAL GOVERNMENT.--(1) The Authority shall furnish
to the Central Government at such time and in such form and manner as may be prescribed, or as the Central
Government may direct to furnish such returns, statements and other particulars in regard to any proposed or
existing programme for the promotion and development of the insurance industry as the Central Government may,
from time to time, require.
(2) Without prejudice to the provisions of sub-section(1), the Authority shall, within nine months after the
close of each financial year, submit to the Central Government a report giving a true and full account of its
activities including the activities for promotion and development of the insurance business during the previous
financial year.
(3) Copies of the reports received under sub-section(2) shall be laid , as soon as may be after they are
received, before each House of Parliament.

21. CHAIRPERSON, MEMBERS, OFFICERS AND OTHER EMPLOYEES OF AUTHORITY TO BE
PUBLIC SERVANTS.---The Chairperson, members, officers and other employees of Authority shall be deemed,
when acting or purporting to act in pursuance of any of the provisions of this Act, to be public servants within the
meaning of section 21 of the Indian Penal Code (45 of 1860).

22. PROTECTION OF ACTION TAKEN IN GOOD FAITH.-- No suit, prosecution or other legal proceedings
shall lie against the Central Government or any officer of the Central Government or any member, officer or other
employee of the Authority for anything which is in good faith done or intended to be done under this Act or the
rules or regulations made thereunder:
Provided that nothing in this Act shall exempt any person from any suit or other proceedings which might, apart
from this Act, be brought against him.

23. DELEGATION OF POWERS.--(1) The Authority may, by general or special order in writing, delegate to the
Chairperson or any other member or office of the Authority subject to such conditions, if any, as may be specified
in the order such of its powers and functions under this Act as it may deem necessary.
(2) The Authority may, by a general or special order in writing, also form committees of the members and
delegate to them the powers and functions of the Authority as may be specified by the regulations.

24. POWER TO MAKE RULES.--(1) The Central Government may, by notification, make rules for carrying out
the provisions of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for
all or any of the following matters, namely :
(a) the salary and allowances payable to, and other terms and conditions of service of, the members other
than part-time members under sub-section(1) of section 7;
(b) the allowances to be paid to the part-time members under sub-section(2) of section 7;
(c) such other powers that may be exercised by the Authority under clause (q) of sub-section(2) of
section 14;
(d) the form of annual statement of accounts to be maintained by the Authority under sub-section(1) of
section 17;
(e) the form and the manner in which and the time within which returns and statements and particulars
are to be furnished to the Central Government under sub-section(1) of section 20;
(f) the matters under sub-section(5) of section 25 on which the Insurance Advisory Committee shall
advise the Authority;
(g) any other matter which is required to be, or may be, prescribed, or in respect of which provision is to
be or may be made by rules.

25. ESTABLISHMENT OF INSURANCE ADVISORY COMMITTEE.--(1) The Authority may, by
notification, establish with effect from such date as it may specify in such notification, a Committee to be known as
the Insurance Advisory Committee.
(2) The Insurance Advisory Committee shall consist of not more than twenty-five members excluding ex-
officio members to represent the interests of commerce, industry, transport, agriculture, consumer fora, surveyors,
agents, intermediaries, organisations engaged in safety and loss prevention, research bodies and employees'
association in the insurance sector.
(3) The Chairperson and the members of the Authority shall be the ex officio Chairperson and ex officio
members of the Insurance Advisory Committee.
(4) The objects of the Insurance Advisory Committee shall be to advise the Authority on matters relating to
the making of the regulations under section 26.
(5) Without prejudice to the provisions of sub-section(4), the Insurance Advisory Committee may advise the
Authority on such other matters as may be prescribed.

26. POWER TO MAKE REGULATIONS.-- (1) The Authority may, in consultation with the Insurance
Advisory Committee, by notification, make regulations consistent with this Act and the rules made thereunder to
carry out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such regulations may
provide for all or any of the following matters, namely :-
(a) the time and places of meetings of the Authority and the procedure to be followed at such meetings
including the quorum necessary for the transaction of business under sub-section(1) of section 10;
(b) the transactions of business at its meetings under sub-section(4) of section 10;
(c) the terms and other conditions of service of officers and other employees of the Authority under sub-
section(2) of section 12;
(d) the powers and functions which may be delegated to Committees of the members under sub-
section(2) of section 23; and
(e) any other matter which is required to be, or may be, specified by regulations or in respect of which
provision is to be or may be made by regulations.

27. RULES AND REGULATIONS TO BE LAID BEFORE PARLIAMENT.--Every rule and every regulation
made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in
session, for a total period of thirty days which may be comprised in one session or in two or more successive
sessions, and if, before the expiry of the session immediately following the session or the successive session
aforesaid, both Houses agree in making any, modification in the rule or regulation or both Houses agree that the
rule or regulation should not be made, the rule or regulation shall thereafter have effect only in such modified form
or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without
prejudice to the validity of anything previously done under that rule or regulation.

28. APPLICATION OF OTHER LAWS NOT BARRED.-- The provisions of this Act shall be in addition
to, and not in derogation of, the provisions of any other law for the time being in force.

29. POWER TO REMOVE DIFFICULTIES.--(1) If any difficulty arises in giving effect to the provisions of
this Act, the Central Government may, by order published in the Official Gazette, make such provisions not
inconsistent with the provisions of this Act as may appear to be necessary for removing the difficulty:
Provided that no order shall be made under this section after the expiry of two years from the appointed day.
(2) Every order made under this section shall be laid, as soon as may be, after it is made, before each House
of Parliament.

30. AMENDMENT OF ACT 4 OF 1938.-- The Life Insurance Act, 1938 shall be amended in the manner
specified in the First Schedule to this Act.

31. AMENDMENT OF ACT 31 OF 1956.--The Life Insurance Corporation Act, 1956 shall be amended in the
manner specified in the Second Schedule to this Act.

32. AMENDMENT OF ACT 57 OF 1972.-- The General Insurance Business (Nationalisation) Act, 1972 shall
be amended in the manner specified in the Third schedule to this Act.

THE FIRST SCHEDULE
(See section 30)
AMENDMENTS TO THE INSURANCE ACT, 1938
(4 of 1938)

1. In the Act, except in clause (5B) of section 2 and section 2B, for "Controller" wherever it occurs,
substitute "Authority" and such consequential changes as the rules of grammar may require shall also be made.

2. In sections 27, 27A, 27B, 31, 32A, 40A, 48B, 64F, 64G, 64-I, 64J, 64L, 64R, 64UC, 64UM, 113 and
115, for "Central Government" wherever they occur, substitute "Authority".

3. Section 2,-
(a) after clause (1), insert the following :-
'(IA) "Authority" means the Insurance Regulatory and Development Authority established under sub-
section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999;';
(b) for clause (5B), substitute the following :-
'(5B) "Controller of Insurance" means the officer appointed by the Central Government under section
2B to exercise all the powers, discharge the functions and perform the duties of the Authority under this Act or the
Life Insurance Corporation Act, 1956 (31 of 1956) or the General Insurance Business (Nationalisation) Act, 1972
(57 of 1972) or the Insurance Regulatory and Development Authority Act, 1999;';
(c) after clause (7), insert the following :-
'(7A) "Indian insurance company" means any insurer being a company-
(a) which is formed and registered under the Companies Act, 1956 (1 of 1956);
(b) in which the aggregate holdings of equity shares by a foreign company, either by itself or through its
subsidiary companies or its nominees, do not exceed twenty-six per cent paid-up equity capital of such Indian
insurance company;
(c) whose sole purpose is to carry on life insurance business or general insurance business or re-insurance
business.
Explanation - For the purposes of this clause, the expression "foreign company" shall have
the meaning assigned to it under clause (23A) of section 2 of the Income-tax Act, 1961 (43 of 1961).';
(d) in clause (14), for "section 114", substitute "this Act".

4. After section 2, insert the following :-
"2A. Interpretation of certain words and expressions - Words and expressions used and not defined in the
Life Insurance Corporation Act, 1956 (31 of 1965), the General Insurance Business (Nationalisation) Act, 1972 (57
of 1972) and the Insurance Regulatory and Development Authority Act, 1999 shall have the meanings respectively
assigned to them in those Acts.".

5. Section 2B, for sub-section (1), substitute the following :-
"(1) If at any time, the Authority is superseded under sub-section (1) of section 19 of the Insurance
Regulatory and Development Authority Act, 1999, the Central Government may, by notification in the Official
Gazette, appoint a person to be the Controller of Insurance till such time the Authority is reconstituted under sub-
section (3) of section 19 of that Act.".

6. Section 2C, in sub-section (1), after the second proviso, insert the following :-
'Provided also that no insurer other than an Indian insurance company shall begin to carry on any class of
insurance business in India under this Act on or after the commencement of the Insurance Regulatory and
Development Authority Act, 1999.".

7. Section 3, -
(a) in sub-section (1), after the first proviso, insert the following :-
"Provided further that a person or insurer, as the case may be, carrying on any class of insurance business
in India, on or before the commencement of the Insurance Regulatory and Development Authority Act, 1999, for
which no registration certificate was necessary prior to such commencement, may continue to do so for a period of
three months from such commencement or, if he had made an application for such registration within the said
period of three months, till the disposal of such application :
Provided also that any certificate of registration, obtained immediately before the commencement of the
Insurance Regulatory and Development Authority Act, 1999, shall be deemed to have been obtained from the
Authority in accordance with the provisions of this Act,";
(b) in sub-section (2), -
(i) in the opening portion, for "Every application for registration shall be accompanied by-", substitute
the following :-
"Every application for registration shall be made in such manner as may be determined by
the regulations made by the Authority and shall be accompanied by-";
(ii) in clause (d), for "working capital", substitute "paid-up equity capital or working capital";
(iii) in clause (f), in the proviso, omit "and" occurring and the end;
(iv) for clause (g), substitute the following -
"(g) the receipt showing payment of fee as may be determined by the regulations which
shall not exceed fifty thousand rupees for each class of business as may be specified by the regulations made by the
Authority;
(h) such other documents as may be specified by the regulations made by the Authority.";
(c) after sub-section (2A), insert -
"(2AA) The Authority shall give preference to register the applicant and grant him a certificate of
registration if such applicant agrees, in the form and manner as may be specified by the regulations made by the
Authority, to carry on the life insurance business or general insurance business for providing health cover to
individuals or group of individuals.".
(d) in sub-section (4),-
(i) in clause (f), for "of any rule or order made thereunder, or", substitute the following :-
"of any rule or any regulation or order made or, any direction issued thereunder, or";
(ii) in clause (h), insert "or" at the end;
(iii) after clause (h), insert the following :-
"(i) if the insurer makes a default in complying with any direction issued or order made, as
the case may be, by the Authority under the Insurance Regulatory and Development Authority Act, 1999, or
"(j) if the insurer makes a default in complying with, or acts in contravention of, any
requirement of the Companies Act, 1956 (1 of 1956) or the Life Insurance Corporation Act, 1956 (31 of 1956) or
the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972) or the Foreign Exchange Regulation Act,
1973 (46 of 1973).";
(e) in sub-section (5C), -
(i) for "clause (h)", substitute "clause(h) or clause (i) or clause (j)";
(ii) for "any requirement of this Act or of any rule or order made thereunder", substitute the following :-
"any requirement of this Act or the Insurance Regulatory and Development Authority Act,
1999 or of any rule or any regulation, or any order made thereunder or any direction issued under those Acts";
(f) after sub-section (5D), insert the following :-
"(5E) The Authority may, by order, suspend or cancel any registration in such manner as may be
determined by the regulations made by it :
Provided that no order under this sub-section shall be made unless the person concerned has been
given a reasonable opportunity of being heard.";
(g) for sub-section (7), substitute the following :-
"(7) The Authority may, on payment of such fee, not exceeding five thousand rupees, as may be
determined by the regulations, issue a duplicate certificate of registration to replace a certificate lost, destroyed or
mutilated, or in any other case where the Authority is of opinion that the issue of duplicate certificate is
necessary.".

8. Section 3A,-
(a) in sub-section(1), for "the 31st day of December, 1941.", substitute the following :-
"the 31st day of March, after the commencement of the Insurance Regulatory and Development
Authority Act, 1999.";
(b) in sub-section(2),-
(i) for "prescribed fee", substitute "fee as determined by the regulations made by the Authority";
(ii) for clause (i), substitute the following :-
"(i) exceed one-fourth of one per cent of such premium income or rupees five crores, whichever is
less,";
(iii) for clause (ii), substitute the following :-
"(ii) be less, in any case, than fifty thousand rupees for each class of insurance business:";
(c) in sub-section (3), for "prescribed fee", substitute "fee as determined by the regulations made by the
Authority";
(d) in sub-section (4), for "prescribed fee", substitute "fee as determined by the regulations made by the
Authority, and".

9. For section 6, substitute the following :-
"6. Requirement as to capital - No insurer carrying on the business of life insurance, general insurance or
re-insurance in India on or after the commencement of the Insurance Regulatory and Development Authority Act,
1999, shall be registered unless he has, -
(i) a paid-up equity capital of rupees one hundred crores, in case of a person carrying on the business of
life insurance or general insurance; or
(ii) a paid-up equity capital of rupees two hundred crores, in case of a person carrying on exclusively the
business as a re-insurer :
Provided that in determining the paid-up equity capital specified under clause (I) or clause (ii), the
deposit to be made under section 7 and any preliminary expenses incurred in the formation and registration of the
company shall be excluded :
Provided further that an insurer carrying on business of life insurance, general insurance or re-insurance
in India before the commencement of the Insurance Regulatory and Development Authority Act, 1999 and who is
required to be registered under this Act, shall have a paid-up equity capital in accordance with clause (I) and clause
(ii), as the case may be, within six months of the commencement of that Act.".

10. Section 6A, -
(a) in sub-section (4), in clause (b), -
(I) in sub-clause (i), omit "and" occurring at the end;
(II) in sub-clause (ii), for "sanction of the Central Government has been obtained to the transfer.",
substitute "approval of the Authority has been obtained to the transfer;";
(III) after sub-clause (ii), insert the following :-
'(iii) where, the nominal value of the shares intended to be transferred by any individual, firm, group,
constituents of a group, or body corporate under the same management, jointly or severally exceeds one per cent of
the paid-up equity capital of the insurer, unless the previous approval of the Authority has been obtained for the
transfer.

Explanation. - For the purposes of this sub-clause, the expressions "group" and "same
management" shall have the same meanings respectively assigned to them in the Monopolies and Restrictive Trade
Practices Act, 1969 (54 of 1969).';
(i) for "Explanation 1.", substitute "Explanation";
(ii) omit Explanation 2.

11. After section 6A, insert the following :-
"6AA. Manner of divesting excess shareholding by promoter in certain cases. - (1) No promoter shall at
any time hold more than twenty-six per cent or such other percentage as may be prescribed, of the paid-up equity
capital in an Indian insurance company.
Provided that in a case where an Indian insurance company begins the business of life insurance, general
insurance or re-insurance in which the promoters hold more than twenty-six per cent of the paid-up equity capital
or such other excess percentage as may be prescribed, the promoters shall divest in a phased manner the share
capital in excess of the twenty-six per cent of the paid-up equity capital or such excess paid-up equity capital as
may be prescribed, after a period of ten years from the date of the commencement of the said business by such
Indian insurance company or within such period as may be prescribed by the Central Government.
Explanation. - For the removal of doubts, it is hereby declared that nothing contained in the proviso shall
apply to the promoters being foreign company, referred to in sub-clause (b) of clause (7A) of section 2.
(2) The manner and procedure for divesting the excess share capital under sub-section (1) shall be
specified by the regulations made by the Authority.".

12. Section 7,-
(a) in sub-section (1),-
(i) omit "not being an insurer specified in sub-clause (c) of clause (9) of section 2";
(ii) for clauses (a) and (b), substitute the following :-
"(a) in the case of life insurance business, a sum equivalent to one per cent of his total gross
premium written in India in any financial year commencing after the 31st day of March, 2000, not exceeding
rupees ten crores;
(b) in the case of general insurance business, a sum equivalent to three per cent of his total gross
premium written in India, in any financial year commencing after the 31st day of March, 2000, not exceeding
rupees ten crores;
(c) in the case of re-insurance business, a sum of rupees twenty crores;";
(b) omit sub-sections (1A), (1B), (1C), (1D) and (1E).

13. Section 11, -
(a) in sub-section (1), for "calendar year", substitute "financial year";
(b) after sub-section (1), insert the following :-
"(1A) Notwithstanding anything contained in sub-section (1), every insurer, on or after the
commencement of the Insurance Regulatory and Development Authority Act, 1999, in respect of insurance
business transacted by him and in respect of his shareholders' funds, shall at the expiration of each financial year,
prepare with reference to that year, a balance-sheet, a profit and loss account, a separate account of receipts and
payments, a revenue account in accordance with the regulations made by the Authority.
(1B) Every insurer shall keep separate accounts relating to funds of shareholders and policy-
holders."

14. Section 13, -
(a) in sub-section (1), -
(i) for "once at least in every three years", substitute "every year";
(ii) in the first proviso, for "not later than four years" substitute "not later than two years";
(iii) after the second proviso, insert the following :-
"Provided also that for an insurer carrying on life insurance business in India immediately before the
commencement of the Insurance Regulatory and Development Authority Act, 1999, the last date as at which the
first investigation after such commencement should be caused by an actuary, shall be the 31st day of March,
2001:";
(iv) after the third proviso, insert the following :-
"Provided also that every insurer on or after the commencement of the Insurance Regulatory and
Development Authority Act, 1999, shall cause an abstract of the report of actuary to be made in the manner
specified by the regulations made by the Authority.";
(b) in sub-section (4), after the proviso, insert the following :-
"Provided further that the statement referred to in sub-section (4) shall be appended in the form and
in the manner specified by the regulations made by the Authority.".

15. After section 27B, insert the following :-
"27C. Prohibition of investment of funds outside India - No insurer shall directly or indirectly invest
outside India the funds of the policy-holders.
27D. Manner and conditions of investment - (1) Without prejudice to anything contained in sections 27,
27A and 27B, the Authority may, in the interests of the policy-holders, specify by the regulations made by it, the
time, manner and other conditions of investment of assets to be held by an insurer for the purposes of this Act.
(2) The Authority may give specific directions for the time, manner and other conditions subject to which the funds
of policy holders shall be invested in the infrastructure and social sector as may be specified by regulations made
by the Authority and such regulations shall apply uniformly to all the insurers carrying on the business of life
insurance, general insurance, or re-insurance in India on or after the commencement of the Insurance Regulatory
and Development Authority Act, 1999.
(3) The Authority may, after taking into account the nature of business and to protect the interests of the policy-
holders, issue to an insurer the directions relating to the time, manner and other conditions of investment of assets
to be held by him :
Provided that no direction under this sub-section shall be issued unless the insurer concerned has been
given a reasonable opportunity of being heard."

16. Section 28A, in sub-section (1), for "31st day of December", substitute "31st day of March".

17. Section 28B, in sub-section (1), for "31st day of December", substitute "31st day of March".

18. Section 31B, -
(a) in sub-section (1), for "Central Government" at both the places where they occur, substitute
"Authority";
(b) in sub-section (2), for "a statement in the prescribed from", substitute "a statement, in the form
specified by the regulations made by the Authority,";
(c) after sub-section (3), insert the following :-
"(4) Every direction under this section shall be issued by an order made by the Authority:
Provided that no order under this section shall be made unless the person concerned has been given an
opportunity of being heard.".

19. After section 32A, insert the following :-
"32B. Insurance business in rural or social sector - Every insurer shall, after the commencement of the
Insurance Regulatory and Development Authority Act, 1999, undertake such percentages of life insurance business
and general insurance business in the rural or social sector, as may be specified, in the Official Gazette by the
Authority, in this behalf.
32C. Obligations of insurer in respect of rural or unorganised sector and backward classes. - Every
insurer shall, after the commencement of the Insurance Regulatory and Development Authority Act, 1999
discharge the obligations specified under section 32B to provided life insurance or general insurance policies to the
persons residing in the rural sector, workers in the unorganised or informal sector or for economically vulnerable or
backward classes of the society and other categories of persons as may specified by regulations made by the
Authority and such insurance policies shall include insurance for crops.".

20. For section 33, substitute the following :-
'INVESTIGATION
33. Power of investigation and inspection by Authority - (1) The Authority may, at any time, by order in
writing, direct any person (hereafter in this section referred to as "Investigating Authority") specified in the order to
investigate the affairs of any insurer and to report to the Authority on any investigation made by such Investigating
Authority :
Provided that the Investigating Authority may, wherever necessary, employ any auditor or actuary or
both for the purpose of assisting him in any investigation under this section.
(2) Notwithstanding anything to the contrary contained in section 235 of the time, and shall, on being directed so to
do by the Authority, cause an inspection to be made by one or more of his officers of any insurer and his books and
account; and the Investigating Authority shall supply to the insurer a copy of this report on such inspection.
(3) It shall be the duty of every manager, managing director or other officer of the insurer to produce before the
Investigating Authority directed to make the investigation under sub-section (1), or inspection under sub-section
(2), all such books of account, registers and other documents in his custody or power and to furnish him with any
statement and information relating to the affairs of the insurer as the said Investigating Authority may require of
him within such time as the said Investigating Authority may specify.
(4) Any Investigating Authority, directed to make an investigation under sub-section (1), or inspection under sub-
section (2), may examine on oath, any manager, managing director or other officer of the insurer in relation to his
business and may administer oaths accordingly.
(5) The Investigating Authority shall, if he has been directed by the Authority to cause an inspection to be made,
and may, in any other case, report to the Authority on any inspection made under this section.
(6) On receipt of any report under sub-section (1) or sub-section (5), the Authority may, after giving such
opportunity to the insurer to make a representation in connection with the report as, in the opinion of the Authority,
seems reasonable, by order in writing , -
(a) require the insurer, to take such action in respect of any matter arising out of the report as the
Authority may think fit; or
(b) cancel the registration of the insurer; or
(c) direct any person to apply to the court for the winding up of the insurer,
if a company, whether the registration of the insurer has been cancelled under clause (b) or not.
(7) The Authority may, after giving reasonable notice to the insurer, publish the report submitted by the
Investigating Authority under sub-section (5) or such portion thereof as may appear to it to be necessary.
(8) The Authority may by the regulations made by it specify the minimum information to be maintained by insurers
in their books, the manner in which such information shall be maintained, the checks and other verifications to be
adopted by insurers in that connection and all other matters incidental thereto as are, in its opinion, necessary to
enable the Investigating Authority to discharge satisfactorily his functions under this section.
Explanation. - For the purposes of this section, the expression "insurer" shall include in the case of an insurer
incorporated in India -
(a) all its subsidiaries formed for the purpose of carrying on the business of insurance exclusively outside
India; and
(b) all its branches whether situated in India or outside India.
(9) No order made under this section other than an order made under clause (b) of sub-section (6) shall be capable
of being called in question in any court.
(10) All expenses of, and incidental to, any investigation made under this section shall be defrayed by the insurer,
shall have priority over that debts due from the insurer and shall be recoverable as an arrear of land revenue.'.

21. Section 33A, omit "Central Government or the".

22. Section 34H, -
(i) for "Controller", substitute "Chairperson of the Authority";
(ii) for "an Assistant Controller of Insurance", substitute "an officer authorised by the Authority";
(b) in sub-sections (5) and (7) for "Controller" wherever it occurs, substitute "Chairperson of the
Authority".

23. Section 35 -
(a) in sub-section (1), for "sanctioned by the Controller", substitute "approved by the Authority";
(i) in the first paragraph, for "to sanction any such scheme substitute "to approve any such scheme";
(ii) in the second paragraph for "the amalgamation or transfer if sanctioned", substitute "the
amalgamation or transfer if approved".

24. Section 36, -
(a) in sub-section (1) for "may sanction the arrangement", substitute "may approve the arrangement";
(i) for "the insurers concerned in the amalgamation, the Controller may sanction", substitute "the insurers
concerned in the amalgamation, the Authority may approve";
(ii) for "contracts as sanctioned by the Controller", substitute "contracts as approved by the Authority".

25. Section 37, in clause (c) for "scheme sanctioned", substitute "scheme approved".

26. In section 40A, in sub-section (3), for the portion beginning with the words "an amount exceeding" and
ending with the words "ten per cent of the premium payable on the policy", substitute "an amount not exceeding
fifteen per cent of the premium payable on the policy where the policy relates to fire or marine insurance or
miscellaneous insurance.".

27. Section 42, -
(a) for sub-section (1), substitute the following :-
"(1) The Authority or an officer authorised by it in this behalf shall, in the manner determined by the
regulations made by it and on payment of the fee determined by the regulations, which shall not be more than two
hundred and fifty rupees, issue to any person making an application in the manner determined by the regulations, a
licence to act as an insurance agent for the purpose of soliciting or procuring insurance business :
Provided that, -
(i) in the case of an individual, he does not suffer from any of the disqualifications mentioned in sub-
section (4); and
(ii) in the case of a company or firm, any of its directors or partners does not suffer from any of the said
disqualifications :
Provided further that any licence issued immediately before the commencement of the
Insurance Regulatory and Development Authority Act, 1999 shall be deemed to have been issued in accordance
with the regulations which provide for such licence.";
(b) for sub-section (3) substitute the following :-
"(3) A licence issued under this section, after the date of the commencement of the Insurance
Regulatory and Development Authority Act, 1999, shall remain in force for a period of three years only from the
date of issue, but shall, if the applicant, being an individual does not, or being a company or firm any of its
directors or partners does not, suffer from any of the disqualifications mentioned in clauses (b), (c), (d), (e) and (f)
of sub-section (4) and the application for renewal of licence reaches the issuing authority at least thirty days before
the date in which the licence ceases to remain in force, be renewed for a period of three years at any one time on
payment of the fee determined by the regulations made by the Authority which shall not be more than rupees two
hundred and fifty, and additional fee of an amount determined by the regulations not exceeding rupees one hundred
by way of penalty, if the application for renewal of the licence does not reach the issued authority at least thirty
days before the date on which the licence ceases to remain in force.";
(c) in sub-section (3A), for the proviso, substitute the following :-
"Provided that the Authority may, if satisfied that undue hardship would be caused otherwise, accept
any application in contravention of this sub-section of payment by the applicant of a penalty of seven hundred and
fifty rupees.";
(d) in sub-section (4), after clause (d) insert the following :-
"(e) that he does not possess the requisite qualifications and practical training for a period not
exceeding twelve months, as may be specified by the regulations made by the Authority in this behalf;
(f) that he has not passed such examination as may be specified by the regulations made by the
Authority in this behalf:
Provided that a person who had been issued a licence under sub-section (1) of this section or
sub-section (1) of section 64UM shall not be required to possess the requisite qualifications, practical training and
pass such examination as required by clauses (e) and (f);
(g) that he violates the code of conduct as may be specified by the regulations made by the
Authority.";
(e) for sub-section (6), substitute the following :-
"(6) The Authority may issue a duplicate licence to replace a licence lost, destroyed or mutilated, on
payment of such fee not exceeding rupees fifty as may be determined by the regulations.";
(f) in sub-section (7),-
(i) for "fifty rupees", substitute "five hundred rupees";
(ii) for "one hundred rupees", substitute "one thousand rupees";
(g) in sub-section (8), for "fifty rupees", substitute "five thousand rupees".

28. Section 42A, in sub-section (1), -
(a) for "Controller or an officer authorised by him" substitute" Authority or an officer authorised by it";
(b) for "an application to him", substitute "an application to it".

29. After section 42C, insert the following :-
"42D. Issue of licence to intermediary or insurance intermediary. -
(1) The Authority or an officer authorised by it in this behalf shall, in the manner determined by the
regulations made by the Authority and on payment of the fees determined by the regulations made by the
Authority, issue to any person making an application in the manner determined by the regulations, and not
suffering from any of the disqualifications herein mentioned, a licence to act as an intermediary or an insurance
intermediary under this Act :
Provided that, -
(a) in the case of an individual, he does not suffer from any of the disqualifications mentioned in sub-
section (4) of section 42, or
(b) in the case of a company or firm, any of its directors or partners does not suffer from any of the said
disqualifications.
(2) A licence issued under this section shall entitle the holder thereof to act as an intermediary or
insurance intermediary.
(3) A licence issued under this section shall remain in force for a period of three years only from the date
of issue, but shall, if the applicant, being an individual does not, or being a company or firm any of its directors or
partners does not suffer from any of the disqualifications mentioned in clauses (b), (c), (d), (e) and (f) of sub-
section (4) of section 42, and the application for renewal of licence reaches the issuing authority at least thirty days
before the date on which the licence ceases to remain in force, be renewed for a period of three years at any one
time on payment of the fee, determined by the regulations made by the Authority and additional fee for an amount
determined by the regulations, not exceeding one hundred rupees by way of penalty, if the application for renewal
of the licence does not reach the issuing authority at least thirty days before the date on which the licence ceases to
remain in force.
(4) no application for the renewal of a licence under this section shall be entertained if the application
does not reach the issuing authority before the licence ceases to remain in force:
Provided that the Authority may, if satisfied that undue hardship would be caused otherwise, accept any
application in contravention of this sub-section on payment by the applicant of a penalty of seven hundred and fifty
rupees.
(5) The disqualifications above referred to shall be the following :-
(a) that the person is a minor;
(b) that he is found to be of unsound mind by a court of competent jurisdiction;
(c) that he has been found guilty of criminal misappropriation or criminal breach of trust or cheating or
forgery or an abetment of or attempt to commit any such office by a court of competent jurisdiction:
Provided that, where at least five years have elapsed since the completion of the sentence imposed
on any person in respect of any such offence, the Authority shall ordinarily declare in respect of such person that
his conviction shall cease to operate as a disqualification under this clause;
(d) that in the course of any judicial proceedings relating to any policy of insurance of the winding up
of an insurance company or in the course of an investigation of the affairs of an insurer it has been found that he
has been guilty of or has knowingly participated in or connived at any fraud dishonestly or misrepresentation
against an insurer or an insured;
(e) that he does not possess the requisite qualifications and practical training for a period not exceeding
twelve months, as may be specified by the regulations made by the Authority in this behalf;
(f) that he has not passed such examinations as may be specified by the regulations made by the
Authority in this behalf;
(g) that he violates the code of conduct as may be specified by the regulations made by the Authority.
(6) If it be found that an intermediary or an insurance intermediary suffers from any of the foregoing
disqualifications, without prejudice to any other penalty to which he may be liable, the Authority shall, and if the
intermediary or an insurance intermediary has knowingly contravened any provision of this Act may cancel the
licence issued to the intermediary or insurance intermediary under this section.
(7)The Authority may issue a duplicate licence to replace a licence lost, destroyed or mutilated, on
payment of such fee, as may be determined by the regulations made by the Authority.
(8) Any person who acts as an intermediary or an insurance intermediary without holding a licence
issued under this section to act as such, shall be punishable with fine, and any insurer or any person who appoints
as an intermediary or an insurance intermediary or any person not licensed to act as such or transacts any insurance
business in India through any such person, shall be punishable with fine.
(9) Where the person contravening sub-section (8) is a company or a firm, then, without prejudice to any
other proceedings which may be taken against the company or firm, every director, manager, secretary or other
officer of the company, and every partner of the firm who is knowingly a party to such contravention shall be
punishable with fine.".

30. Section 64UA, in sub-section (1), in sub-clause(a), for "Controller or Insurance", substitute "Chairperson
of the Authority".

31. Section 64UB,-
(a) for sub-section (1), substitute the following :-
"(1) The Authority may, by notification in the Official Gazette, make regulations to carry out the
purposes of this Part.";
(b) in sub-section (2), for "rules", substitute "regulations";
(c) in sub-section (3) for "Central Government" at both the places where it occur, substitute
"Authority";
(d) in sub-section (5), for "Controller of Insurance", substitute "Chairperson of the Authority".

32. Section 64UC in sub-section (1), in proviso, for "the controller may, with the previous approval of the
Central Government", substitute "the Authority may."

33. Section 64UD, after sub-section (1), insert the following :-
"Provided that the Chairperson of the Authority shall become the Chairman of the Advisory Committee
with effect from the commencement of the Insurance Regulatory and Development Authority Act, 1999 and
function as such, and any Chairman of the Tariff Committee holding office immediately before such
commencement shall cease to be the Chairman.".

34. Section 64UJ, in sub-section (5), for "Central Government", wherever it occurs, substitute "Authority".

35. Section 64UM, -
(i) in paragraph (B), after "the Insurance (Amendment) Act, 1968", insert "but before the
commencement of the Insurance Regulatory and Development Authority Act, 1999";
(ii) after paragraph (B), insert the following :-
"(BA) Every person who intends to act as a surveyor or loss assessor after the expiry of a
period of one year from the commencement of the Insurance Regulatory and Development Authority Act, 1999,
shall make an application to the Authority within such time, in such manner and on payment of such fee as may be
determined by the regulations made by the Authority:
Provided that any licence issued immediately before the commencement of the Insurance
Regulatory and Development Authority Act, 1999 shall be deemed to have been issued in accordance with the
regulations providing for such licence.";
(iii) in paragraph (C), for "as may be prescribed", substitute "as may be determined by the regulations";
(iv) in paragraph (D), in clause (i) -
(A) for item (a), substitute the following :-
"(a) has been in practice as a surveyor or loss assessor on the date of commencement
of the Insurance Regulatory and Development Authority Act, 1999, or";
(B) in item (f), for "prescribed ", substitute, "specified by the regulations made by the
Authority";
(b) after sub-section (1), insert -
"(1A) Every surveyor and loss assessor shall comply with the code of conduct in respect of their
duties, responsibilities and other professional requirements as may be specified by the regulations made by the
Authority.".

36. Section 64V, -
(i) in clause (i), after sub-clause (g), insert the following :-
"(h) such other asset or assets as may be specified by the regulations made in this behalf;";
(ii) in clause (ii) -
(A) in sub-clause (b), in items (i) and (ii), for "40 per cent", substitute "50 per cent.";
(B) after sub-clause (f), insert the following :-
"(g) such other liability which may be made in this behalf to be included for the
purpose of clause (ii).";
(b) for sub-section (2), substitute the following :-
"(2) Every insurer shall furnish to the Authority with his returns under section 15 or section 16, as the
case may be, a statement certified by an auditor approved by the Authority in respect of general insurance business,
or an actuary approved by the Authority in respect of life insurance business, as the case may be, of his assets and
liabilities assessed in the manner required by this section as on the 31st day of March of the preceding year.
(3) Every insurer shall value his assets and liabilities in the manner required by this section and in
accordance with the regulations which may be made by the Authority in this behalf.".

37. Section 64VA, -
(a) in sub-section (1), for "at all times", substitute "at all times before the commencement of the
Insurance Regulatory and Development Authority Act, 1999";
(b) after sub-section (1), insert the following :-
'(1A) Every insurer shall, at all times, on or after the commencement of the Insurance Regulatory and
Development Authority Act, 1999, maintain an excess of the value of his assets over the amount of his liabilities of
not less than the amount arrived at as follows (hereinafter referred to in this section referred to as the "required
solvency margin"), namely :-
(i) in the case of an insurer carrying on life insurance business, the required solvency margin shall be
the higher of the following amounts -
(a) fifty crores of rupees (one hundred crores of rupees in case of re-insurers); or
(b) the aggregate sums of the results arrived at in items (I) and (II) stated
below :-
(I) the aggregate of the results arrived at by applying the calculation described in item (A)
below (Step - I) and the calculation described in item (B) below (Step II) :
(A) for Step I -
(A.1) there shall be taken, a sum equal to a percentage determined by the regulations
not exceeding five per cent of the mathematical reserves for direct business and re-insurance acceptances without
any deduction for re-insurance cessions.
(A.2) the amount of mathematical reserves at the end of the preceding financial year
after the deduction of re-insurance cessions shall be expressed as a percentage of the amount of those mathematical
reserves before any such deduction; and
(A.3) the sum mentioned in item (A.1) above shall be multiplied -
(A.3.1) where the percentage arrived at under item (A.2) above is greater than eighty-
five per cent (or in the case of a re-insurer carrying on exclusive re-insurance business, fifty per cent), by that
greater percentage; and
(A.3.2) in any other case, by eighty-five per cent (or in the case of re-insurer carrying
on exclusive re-insurance business, by fifty per cent);
(B) for Step II -
(B.1) there shall be taken, a sum equal to a percentage determined by the regulations
made by the Authority not exceeding one per cent of the sum at risk for the policies on which the sum at risk is not
a negative figure, and
(B.2) the amount of sum at risk at the end of the preceding financial year for policies
on which the sum at risk is not a negative figure after the deduction of re-insurance cession shall be expressed as a
percentage of the amount of that sum at risk before any such deduction, and
(B.3) the sum arrived at under item (B.1) above shall be multiplied -
(B.3.1) where the percentage arrived at under item (B.3.2) above is greater than fifty
per cent, by that greater percentage; and
(B.3.2) in any other case, by fifty per cent,
(II) a percentage determined by the regulations made by the Authority of the value of assets
determined in accordance with the provisions of section 64V;
(ii) in the case of an insurer carrying on general insurance business, the required
solvency margin, shall be the highest of the following amounts :-
(a) fifty crores of rupees (one hundred crores of rupees in case of re-insurer);
or
(b) a sum equivalent to twenty per cent of net premium income; or
(c) a sum equivalent to thirty per cent of net incurred claims,
subject to credit for re-insurance in computing net premiums and net incurred
claims being actual but a percentage, determined by the regulations not exceeding fifty per cent:
Provided that if in respect of any insurer, the Authority is satisfied that either by
reason of an unfavourable claim experience or because of sharp increase in the volume of the business, or for any
other reason, compliance with the provisions of this sub-section would cause undue hardship to the insurer, the
Authority may direct, for such period and subject to such conditions, such solvency margin not being less than the
lower of the amount mentioned in sub-clause (i) or sub-clause (ii) above, as the case may be.
Explanation - For the purposes of this sub-section, the expressions -
(i) "mathematical reserves" means the provision made by an insurer to cover
liabilities (excluding liabilities which have fallen due and liabilities arising from the deposit back arrangement in
relation to any policy whereby an amount is deposited by re-insurer with the cedant) arising under or in connection
with policies or contracts for life insurance business. Mathematical reserves also include specific provision for
adverse deviations of the bases, such as mortality and morbidity rates, interest rates, and expense rates, and any
explicit provisions made, in the valuation of liabilities, in accordance with the regulations made by the Authority
for this purpose;
(ii) "net incurred claims" means the average of the net incurred claims during the
specified period of not exceeding three preceding financial years;
(iii) "sum at risk" in relation to a life insurance policy, means a sum which is -
(a) in any case in which an amount is payable inconsequence of death other than a case
falling within sub-clause (b) below, the amount payable on death, and
(b) in any case in which the benefit under the policy in question consist of the making, in
consequence of death, of the payments of annuity, payment of sum by instalments or any other kind of periodic
payments, the present value of that benefit, less in either case the mathematical reserves in respect of the relevant
policies.";
(c) after sub-section (2), insert the following :-
"(2A) If, at any time an insurer does not maintain the required solvency margin in
accordance with the provisions of this section, he shall, in accordance with the provisions of this section, he shall,
in accordance with the directions issued by the Authority, submit a financial plan, indicating a plan of action to
correct the deficiency to the Authority within a specified period not exceeding three months.
(2B) An insurer who has submitted a plan under sub-section (2A) to the Authority
shall propose modifications to the plan if the Authority considers it inadequate, and shall give effect to any plan
accepted by the Authority as adequate.
(2C) An insurer who does not comply with the provisions of sub-section (2A) shall
be deemed to be insolvent and may be wound up by the Court.";
(d) after sub-section (6); insert the following :-
"(7) Every insurer shall furnish to the Authority his returns under section 15 or section 16,
as the case may be, in case of life insurance business a statement certified by an actuary approved by the authority,
and in case of general insurance business a statement certified by an auditor approved by the Authority, of the
required solvency margin maintained by the insurer in the manner required by sub-section (1A).".

38. Section 70 in sub-section (1), for "the Controller a certificate of registration", substitute "the Authority,
before the date of commencement of the Insurance Regulatory and Development Authority Act, 1999, a certificate
of registration."

39. Section 95, in sub-section (1), for "In this Part -", substitute "In this part, before the date of
commencement of the Insurance Regulatory and Development Act, 1999, -".

40. Section 101A, -
(a) in sub-section (1), for "the Central Government" substitute "the Authority, with the previous approval
of the Central Government,";
(b) in sub-section (2), for "the Central Government" substitute "the Authority."

41. Section 101B,-
(a) in sub-section (1), for "the Central Government", substitute "the Authority with the previous approval
of the Central Government.";
(b) in sub-section (2), for "prescribed", substitute determined by the regulations made by the Authority".

42. For sections 102 to 105, substitute the following :-
"102. Penalty for default in complying with, or Act in contravention of, this Act. - If any person who is
required under this Act, or rules or regulations made thereunder, -
(a) to furnish any document, statement, account, return or report to the Authority, fails to furnish the
same; or
(b) to comply with the directions, fails to comply with such directions;
(c) to maintain solvency margin, fails to maintain such solvency margin;
(d) to comply with the directions on the insurance treaties, fails to comply with such directions on the
insurance treaties,
he shall be liable to a penalty not exceeding five lakh rupees for each such failure and punishable with
fine.
103. Penalty for carrying on insurance business in contravention of section 3,7. and 98. - If a person
makes a statement, or furnishes any document, statement, account, return or report which is false and which he
either knows or believes to be false or does not believe to be true, -
(a) he shall be liable to a penalty not exceeding five lakh rupees for each such failure; and
(b) he shall be punishable with imprisonment which may extend to three years or with fine for each such
failure.
104. Penalty for false statement in document. - If a person fails to comply with the provisions of section
27 or section 27A or section 27B or section 27C or section 27D, he shall be liable to a penalty not exceeding five
lakh rupees for each such failure.
105. Wrongfully obtaining or withholding property. - If any director, managing director, manager or
other officer or employees of an insurer wrongfully obtains possession of any property or wrongfully applies to any
purpose of the Act, he shall be liable to a penalty not exceeding two lakh rupees for each such failure.
105A. Offences by companies. - (1) Where any offence under this Act has been committed by a
company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the
company for the conduct of the business of the company as well as the company shall be deemed to be guilty of the
offence and shall be liable to be proceeded against and punished accordingly;
Provided that nothing contained in this sub-section shall render any such person liable to any
punishment, if he proves that the offence was committed without his knowledge or that he had exercised all due
diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been
committed by a company and it is proved that the offence has been committed with the consent or connivance of,
or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company,
such director, manager, secretary or other officer shall be deemed to be guilty of that offence and shall be liable to
be proceeded against and punished accordingly.
Explanation. - For the purposes of this section, -
(a) "company" means any body corporate, and includes -
(i) a firm; and
(ii) an association of persons or a body of individuals whether incorporated or not; and
(b) "director", in relation to -
(i) a firm, means a partner in the firm;
(ii) an association of persons or a body of individuals, means any member controlling the affairs thereof.
105B. Penalty for failure to comply with section 32B. - If an insurer fails to comply with the provisions
of section 32B, he shall be liable to a penalty not exceeding five lakh rupees for each such failure and shall be
punishable with imprisonment which may extend to three years or with fine for each such failure.
105C. Penalty for failure to comply with section 32C. - If an insurer fails to comply with the provisions
of section 32C, he shall be liable to a penalty not exceeding twenty-five lakh rupees for each such failure and in the
case of subsequent and continuing failure, the registration granted to such insurer under section 3 shall be cancelled
by the Authority.".

43. In sections 110A, 110B and 110C, for "Controller" wherever it occurs, substitute "Chairperson of the
Authority".

44. Section 110G, for "Controller" at both the places where it occurs, substitute "Chairperson of the
Authority".

45. Section 110H, in sub-section (1), for "under sections", substitute "under section 27D,".

46. Section 114, in sub-section (2),-
(a) after clause (a), insert the following :-
"(aa) such other percentage of paid-up equity capital in excess twenty-six per cent of the paid-up equity
capital and the period within which such excess paid-up equity capital shall be divested under sub-section (1) of
section 6AA.";
(b) omit clauses (g) and (ll),

"114A. Power of Authority to make regulations. - (1) The Authority may, by notification in the Official
Gazette, make regulations consistent with this Act and the rules made thereunder, to carryout the purposes of this
Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such regulation may
provide for all or any of the following matters, namely :-
(a) the matters including fee relating to the registration of insurers under section 3;
(b) the manner of suspension or cancellation of registration under sub-section (5E) of section 3;
(c) such fee, not exceeding five thousand rupees, as may be determined by the regulations for issue of a
duplicate certificate of registration under sub-section (7) of section 3;
(d) the matters relating to the renewal of registration and fee therefore under section 3A;
(e) the manner and procedure for divesting excess share capital under sub-section (2) of section 6AA;
(f) the preparation of balance-sheet, profit and loss account and a separate account of receipts and
payments and revenue account under section (1A) of section 11;
(g) the manner in which an abstract of the report of the actuary to be specified under the fourth proviso to
sub-section (1) of section 13;
(h) the form and manner in which the statement referred to in sub-section(4) of section 13 shall be
appended;
(i) the time, manner and other conditions of investment of assets held by an insurer under sub-sections
(1), (1A) and (2) of section 27D;
(j) the minimum information to be maintained by insurer in their books, the manner in which such
information should be maintained, the checks and other verifications to be adopted by insurers in that connection
and all other matters incidental thereto under sub-section (8) of section 33;
(k) the manner for making an application, the manner and the fee for issue of a licence to act as an
insurance agent under sub-section (1) of section 42;
(l) the fee and the additional fee to be determined for renewal of licence of insurance agent under sub-
section (3) of section 42;
(m) the requisite qualifications and practical training to act as an insurance agent under clause (e) of sub-
section (4) of section 42;
(n) the passing of examination to act as an insurance agent under clause (f) of sub-section (4) of section
42;
(o) the code of conduct under clause (g) of sub-section (4) of section 42;
(p) the fee not exceeding rupees fifty for issue of duplicate licence under sub-section (6) of section 42;
(q) the manner and the fees for issue of a licence to an intermediary or an insurance intermediary under
sub-section (1) of section 42D;
(r) the fee and the additional fee to be determined for renewal of licence of intermediaries or insurance
intermediaries under sub-section (3) of section 42D;
(s) the requisite qualifications and practical training of intermediaries or insurance intermediaries under
clause (e) of sub-section (5) of section 42D;
(t) the examination to be passed to acts as an intermediary or insurance intermediary under clause (f) of
sub-section (5) of section 42D;
(u) the code of conduct under clause (g) of sub-section (5) of section 42D;
(v) the fee for issue of duplicate licence under sub-section (7) of section 42D;
(w) such matters as specified under sub-section (2) of section 64UB relating to the Tariff Advisory
Committee;
(x) the matters relating to licensing of surveyors and loss assessors, their duties, responsibilities and other
professional requirements under section 64UM;
(y) such other asset or assets as may be specified under clause (h) of sub-section (1) of section 64V for
the purposes of ascertaining sufficiency of assets under section 64VA;
(z) the valuation of assets and liabilities under sub-section (3) of section 64V;
(za) the matters specified under sub-section (1A) of section 64VA relating to sufficiency of assets;
(zb) the matters relating to re-insurance under sections 101A and 101B;
(zc) the matters relating to redressal of grievances of policy-holders to protect their interest and to
regulate, promote and ensure orderly growth of insurance industry; and
(zd) any other matter which is to be, or may be, specified by the regulation made by the Authority or in
respect of which provision is to be made or may be made by the regulations.
(3) Every regulation made under this Act shall be laid, as soon as may be after it is made, before each
House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session
or in two or more successive sessions, and if, before the expiry of the session immediately following the session or
the successive sessions aforesaid, both Houses agree in making any modification in the regulation or both Houses
agree that the regulation should not be made, the regulation shall thereafter have effect only in such modified form
or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without
prejudice to the validity of anything previously done under that regulation.".

48. Section 116 A, for "Central Government", at both places where they occur, substitute "Central
Government, before the date of commencement of the Insurance Regulatory and Development Authority Act,
1999,".

THE SECOND SCHEDULE
(See section 31)
AMENDMENTS TO THE LIFE INSURANCE CORPORATION ACT, 1956
(31 of 1956)

1. In the Act, for "Controller" wherever it occurs, substitute "Authority".
"30A. Exclusive privilege of Corporation to cease. - Notwithstanding anything contained in this Act,
the exclusive privilege of carrying on life insurance business in India by the Corporation shall cease on and from
commencement of the Insurance Regulatory and Development Authority Act, 1999 and the Corporation shall,
thereafter, carry on life insurance business in India in accordance with the provisions of the Insurance Act, 1938 (4
of 1938).".

THE THIRD SCHEDULE
(See section 32)
AMENDMENT TO THE GENERAL INSURANCE BUSINESS (NATIONALISATION) ACT, 1972
(57 of 1972)

After section 24, insert the following :-
"24A. Exclusive privilege of Corporation and acquiring companies to cease. - Notwithstanding
anything contained in this Act, the exclusive privilege of the Corporation and the acquiring companies of carrying
on general insurance business in India shall cease on an from the commencement of the Insurance Regulatory and
Development Authority Act, 1999 and the Corporation and the acquiring companies shall, thereafter, carry on
general insurance business in India in accordance with the provisions of the Insurance Act, 1938 (4 of 1938)."

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Home > Deposit Insurance > The Deposit Insurance Funds > Household Survey on Deposit Insurance Awareness, April 2001
Household Survey on Deposit Insurance Awareness, April 2001
Survey Report
Prepared by: Authors:

The Gallup Organization Darby Miller Steiger
Government Division Alison Simon
901 F Street, N.W. Robert Montgomery
Suite 400
Washington, D.C. 20004
202.715.3030
TABLE OF CONTENTS
Introduction
Executive Summary
Detailed Findings
1. Awareness of FDIC and FDIC-Insured Products & Services
2. Preference for Obtaining Information About FDIC Deposit Insurance
3. Preference for Obtaining General Deposit Insurance Information
4. Investing Decisions and FDIC Insurance
5. Support for Changing the Insured Deposit Level
6. Current Banking Habits
Technical Notes
Sample Selection
Nonresponse
Weighting
Imputation
Introduction
The Federal Deposit Insurance Corporation (FDIC), as the agency statutorily responsible for insuring
deposits at banks and savings institutions, has conducted a comprehensive review of the deposit
insurance system. The intent was to ensure that the system continues to meet the public’s need for a
safe place to invest its savings, and that federal deposit insurance will continue to contribute fully to the
stability of the U.S. banking system.
To assist in its analysis of deposit insurance reform issues, the FDIC contracted with The Gallup
Organization to conduct a national household survey. The purpose of the survey was twofold: (1) To
collect information regarding the public’s understanding of federal deposit insurance and depositors’
need for information about their insurance coverage; and (2) to gather information about the public’s
deposit insurance coverage needs and the possible effects of increasing the deposit insurance level.
The FDIC planned to use data from the survey to assist in its ongoing efforts to educate the public
about federal deposit insurance coverage. It also planned to use the survey data to develop
recommendations regarding the manner by which coverage levels are established. These efforts were
intended to ensure that depositors have the information they need to take full advantage of their
insurance protection and recognize what is, and is not, insured at financial institutions.
The Gallup Organization conducted telephone interviews with a randomly selected, representative
sample of 1,658 adults who identified themselves as the people most knowledgeable about household
finances (household Chief Financial Officers, or CFOs), age 18 or older, living in households with
telephone service in the continental United States. The interview period ran from November 20 to
December 23, 2000.
After interviewing was completed, the data were weighted to adjust for nonresponse. A detailed
description of the weighting methods can be found in the Technical Notes.
All sample surveys are subject to various sources of error, generally classified as sampling error and
nonsampling error. Sampling error relates to deviations that arise because a sample is used to
generalize to the universe. Sources of nonsampling errors include undercoverage of the target
population, survey nonresponse, and measurement errors. Additional discussion of survey errors is
given in the initial portion of the Technical Notes.
In the remainder of this report, we describe in detail the weighted responses to the national survey of
public attitudes and knowledge about FDIC deposit insurance.
Executive Summary
The Gallup Organization found that, in general, the vast majority of household Chief Financial Officers,
or CFOs (those most knowledgeable about the household’s finances), knew of the FDIC and whether
their banks were insured. However, they lacked specific knowledge about whether certain transactions
were insured and the details of joint account coverage. Most preferred to obtain information about
deposit insurance directly from their financial institution, although those looking to the FDIC for
information favored obtaining information from the FDIC's Web site. The survey also found that FDIC
coverage is an important factor in investment decisions. Yet, while most CFOs indicated they would like
to see the deposit insurance level keep pace with inflation, they were split as to whether the level should
be raised -- about one-fourth believing the current level is appropriate, another one-fourth having no
opinion, and about half believing the level should be raised.
FINDING: In general, household CFOs were well acquainted with the name "FDIC" and knew whether
their financial institutions were insured by the FDIC. The CFOs, however, did not know the specifics of
FDIC insurance coverage of various banking products and services.
 Overall, more than eight in 10 household CFOs have heard of the FDIC (an estimated 85
percent) and another eight in 10 knew whether their banks were insured or not (83 percent).
 The public is much less knowledgeable about the specific financial transactions that are insured
by the FDIC than they are about whether their own financial institution is insured. When asked
the basic amount of money the FDIC insures, just half of the public surveyed correctly identified
$100,000 as the basic level (49 percent). About one-third readily admitted that they did not
know the answer to that question (35 percent).
 Awareness of specific transactions insured by the FDIC is also low. Only a slight majority was
aware that the FDIC does not insure all bank transactions (57 percent); the remainder either
believed that all transactions are covered (27 percent) or did not know enough to say (16
percent).
 Furthermore, many do not know that certain types of investments are not covered by FDIC
insurance, including insurance annuities (63 percent either don’t know or believe they are
insured), mutual funds (56 percent), stocks & bonds (50 percent), and/or Treasury bills (75
percent).
 When asked whether they knew specifics on joint account coverage, the lack of knowledge was
even greater. About three-fourths (75 percent) incorrectly believe that only $100,000 of a joint
account with $200,000 in the account is covered, and only 16 percent correctly know that the
full amount is covered. Furthermore, three-fourths do not realize that individual accounts are
added together and insured to $100,000 (56 percent believe accounts are insured separately to
$100,000 and another 20 percent do not know).
FINDING: The public would rather get information from banks than directly from the FDIC.
 When asked where they prefer to get their information about deposit insurance, roughly six in
10 reported a preference for receiving information from their bank (57 percent). Another three in
10 reported a preference for receiving information from the FDIC (33 percent).
 Those who prefer to get information from their bank are most apt to talk directly to a bank
representative (58 percent would be very likely to do this), followed closely by reading
information included in their account statement (55 percent very likely). Slightly fewer indicated
they would be very likely to read a brochure, advertisement or Web site from their bank (43
percent very likely), and only 8 percent would be likely to watch a video in their bank’s lobby.
 Among those who prefer to get information about deposit insurance directly from the FDIC, the
top preference was to visit the FDIC’s Web site (see Figure 7). Four in 10 of those who would
go to the FDIC for information said they would be very likely to visit the FDIC’s Web site (42
percent). The public was less likely to call the FDIC (28 percent very likely) or write the FDIC
(14 percent).
FINDING: In spite of a lack of knowledge about details of deposit insurance, many feel they have
enough information.
 Over one-half of household CFOs believe they have a sufficient amount of information on
deposit insurance (an estimated 55 percent), while 42 percent would like more information.
FINDING: FDIC coverage is a significant factor in investment decisions, especially when household
wealth is taken into account.
 Among household CFOs, about one-third said that at some point they have inquired about
whether the FDIC insured an investment before making an investment decision (34 percent),
while 66 percent indicate they have never inquired.
 Among those who said they have inquired about whether an investment was insured, the
inquiry most frequently was directed to the financial institution in which they were investing (64
percent). A smaller group has also asked their investment advisor about this (28 percent), and
just 2 percent have gone directly to the FDIC.
 Among those who have invested money in the past five years, additional questions were posed
to determine the relative importance of FDIC insurance in an investment decision. To recent
investors, the two most important factors are the potential return on investment (75 percent
rated this as very important) followed closely by the risk of the investment (71 percent). While
fewer investors were concerned that their investment was fully protected by loss by the FDIC
(57 percent), FDIC coverage is still very important to over half of recent investors.
FINDING: The public would like to see the deposit insurance level keep pace with inflation, but is split
over whether the level should be raised or not.
 Households were asked if they preferred to leave the deposit insurance level alone, or whether
they felt it should be adjusted over time to keep pace with inflation. Support is much stronger for
adjusting the level over time, with over three-quarters agreeing that the level should keep pace
with inflation (77 percent). Just 16 percent believed the level should be left alone.
 When asked if they believed the level of FDIC deposit insurance is at the right level now or if it
needs to be raised, only 27 percent believed that the insurance level is at the appropriate level
today. Nearly half believed the level should be raised (47 percent), with an additional 25 percent
having no opinion.
 More specifically, 27 percent of the public feels the level is at the right level now, 5 percent feel
it should be increased to $150,000, 21 percent said it should be increased to $200,000, and an
additional 19 percent said it should be raised to above $200,000. The remainder were
uncertain.
 Regardless of any economic or personal scenario, if the deposit insurance level were raised,
the public is somewhat willing to shift more money into insured deposits. Only 23 percent would
be very likely to shift more money, with another 36 percent feeling "somewhat" likely.
FINDING: Although very few admit to keeping over $100,000 in the bank, household CFOs did admit to
keeping funds at different banks to make sure their money is fully insured.
 Among CFOs who have recently put money aside for savings or investing, a plurality keep less
than one-quarter of their funds in banks (an estimated 46 percent). An additional 27 percent
keep between one-fourth and one-half of their funds in a bank.
 Just 12 percent reported keeping more than $100,000 in the bank, with most of those keeping
between $100,000 and $200,000 in the bank (66 percent).
 While few currently have large amounts of money in the bank, about one-third of CFOs reported
having more than $100,000 in the bank at one time or another (30 percent). Reasons for having
large deposits included either selling a home (64 percent), receiving an inheritance (25
percent), or some other large financial transaction (31 percent).
 Large depositors who said they did currently have over $100,000 in a bank (12 percent of the
population) were asked if any of that money was currently uninsured. One third of these large
depositors said they had uninsured deposits (33 percent), while most others were under the
impression that all of their money was insured (63 percent). The amount they believe is
uninsured varied from less than $50,000 (38 percent) to between $50,000 and $100,000 (23
percent) to $100,000 or more (39 percent).
 Among large depositors, 58 percent said they keep money at more than one bank to make sure
that their money is fully insured, whereas 42 percent do not. Among those large depositors who
do keep their money at more than one bank to stay fully insured (7 percent of the population),
more than six in 10 (63 percent) also report that they keep their deposits at any one bank to just
under $100,000 in order to stay fully insured.
Detailed Findings
Overall, more than eight in 10 household CFOs have heard of the FDIC (an estimated 85 percent) and
another eight in 10 knew whether their banks were insured or not (83 percent). Hispanics were among
the least likely to have heard of the FDIC (59 percent), as were African Americans (68 percent) and
other minorities (66 percent). Young adults aged 18 to 25 (68 percent), as well as those with less than a
high school diploma (61 percent) were also less likely to have heard of the FDIC.
The public is much less knowledgeable about the specific financial transactions that are insured by the
FDIC than they are about whether their own financial institution is insured. When asked the basic
amount of money the FDIC insures, just half of the public surveyed correctly identified $100,000 as the
basic level (an estimated 49 percent). About one-third readily admitted that they did not know the
answer to that question (35 percent) (see Figure 1). Senior citizens and the wealthy (those with income
over $75,000) were most likely to know the basic FDIC insurance level (59 percent and 60 percent,
respectively), while young adults under age 25 were among the least aware (61 percent don’t know).
Large depositors, who indicated they had more than $100,000 in the bank, were much more likely to
know the basic level (67 percent) than were those who had less than $100,000 in the bank (46 percent).
Awareness of specific transactions insured by the FDIC is also low. Only a slight majority was aware
that the FDIC does not insure all bank transactions (57 percent); the remainder either believed that all
bank transactions are covered (27 percent) or did not know enough to say (16 percent). Large
depositors were much more likely to know that not all transactions are insured (70 percent) than were
smaller depositors with less than $100,000 in the bank (55 percent). Interesting regional differences
emerged on this question. Northeasterners (67 percent) and Westerners (62 percent) were much more
likely to know that only some transactions are insured than were their counterparts in the Midwest (52
percent) and South (51 percent) (see Figure 2).
Furthermore, many do not know that certain types of investments are not covered by FDIC insurance,
including insurance annuities (63 percent either don’t know or believe they are insured), mutual funds
(56 percent), stocks & bonds (50 percent), and/or Treasury bills (75 percent) (see Figure 3).
When asked whether they knew specifics on joint account coverage, the lack of knowledge was even
greater. Three-fourths (an estimated 75 percent) incorrectly believe that only $100,000 of a joint
account with $200,000 in the account is covered, and only 16 percent correctly know that the full
amount is covered (see Figure 4). Furthermore, three-fourths do not realize that individual accounts are
added together and insured to $100,000 (56 percent believe accounts are insured separately to
$100,000 and another 20 percent do not know). The lack of knowledge of specific rules on FDIC
insurance levels applies to old and young, rich and poor, male and female, large depositors and small
depositors.
There appears to be a need for further education of the public. In addition to uncertainty about FDIC
insurance levels, consumers are also unsure about the more specific rules that distinguish between
insured deposits and other bank products, as well as the rules regarding the separate insurance of
different account types. Rather than acknowledging they do not know the rules, an overwhelming
majority of consumers gave wrong answers to fundamental questions about which products are insured
by FDIC and about coverage levels.
When asked where they prefer to get their information about deposit insurance, roughly six in 10
reported a preference for receiving information from their bank (57 percent). Another three in 10
reported a preference for receiving information from the FDIC (33 percent) (see Figure 5). No
subgroups stood out with stronger preferences, though Midwesterners were slightly more likely to want
information from their bank (63 percent), while Northeasterners and non-African American minorities
were more likely to prefer getting information directly from the FDIC (38 percent and 39 percent,
respectively).
Those who prefer to get information from their bank are most apt to talk directly to a bank representative
(58 percent would be very likely to do this), followed closely by reading information included in their
account statement (55 percent very likely). Slightly fewer indicated they would be very likely to read a
brochure, advertisement or Web site from their bank (43 percent very likely), and only 8 percent would
be likely to watch a video in their bank’s lobby (see Figure 6). Among those who the FDIC might judge
as most in need of information, that is, those who do not know what the basic insurance level is, the top
preference is also to talk to a banker (57 percent), although this group shows less interest in reading
information in their account statement (42 percent, compared to 55 percent overall).
Among those who prefer to get information about deposit insurance directly from the FDIC, the top
preference was to visit the FDIC’s Web site (see Figure 7). Four in 10 of those who would go to the
FDIC for information said they would be very likely to visit the FDIC’s Web site (42 percent). The public
was less likely to call the FDIC (28 percent very likely) or write the FDIC (14 percent).
FINDING: In spite of a lack of knowledge about details of deposit insurance, many feel they have
enough information.
Over one-half of household CFOs believe they have a sufficient amount of information on deposit
insurance (an estimated 55 percent), while 42 percent would like more information (see Figure 8).
Those who were most likely to want additional information include African Americans (64 percent),
Hispanics (52 percent), and young adults aged 18-25 (49 percent); senior citizens are most likely to
believe they have enough information (70 percent). There is no clear relationship between income level
and preference for obtaining additional information. However, those with large amounts of savings and
investments (over $250,000) are less apt to want information (33 percent) than those with savings and
investments under $250,000 (44 percent)
Those who know that the basic insurance level is $100,000 are more apt to say they have enough
information (63 percent) than those who do not know the insurance level (55 percent).
FINDING: FDIC coverage is a significant factor in investment decisions, especially when household
wealth is taken into account.
Among household CFOs, about one-third said that at some point they have inquired about whether the
FDIC insured an investment before making an investment decision (34 percent), while 66 percent
indicate they have never inquired (see Figure 9). Senior citizens (40 percent) and those aged 55 to 64
(40 percent) are the most likely to have made this inquiry, as are those with savings or investments of
over $500,000 (44 percent) and those with large bank deposits (55 percent).
Among those who said they have inquired about whether an investment was insured, the inquiry most
frequently was directed to the financial institution in which they were investing (64 percent). A smaller
group has also asked their investment advisor about this (28 percent), and just 2 percent have gone
directly to the FDIC.
Among those who have invested money in the past five years, additional questions were posed to
determine the relative importance of FDIC insurance in an investment decision. To recent investors, the
two most important factors are the potential return on investment (75 percent rated this as very
important) followed closely by the risk of the investment (71 percent). While fewer investors were
concerned that their investment was fully protected by loss by the FDIC (57 percent), FDIC coverage is
still very important to over half of recent investors (see Figure 10).
Interesting differences emerged across the social and economic segments, primarily among responses
to the importance of the FDIC protecting the investment. Women were less concerned about the
investment being protected by the FDIC than were men (49 percent very important among women
versus 64 percent among men); the older the household CFO, the more important was FDIC insurance
when deciding where to invest; and the lower the income level, the more important was FDIC
protection. Similarly, the lower the household’s savings and investment level, the more important FDIC
insurance was in the investment decision. In sum, while FDIC insurance is clearly not the most
important factor in making investment decisions, it does play a role, particularly for more risk-averse
investors such as older and less affluent households.
FINDING: The public would like to see the deposit insurance level keep pace with inflation, but is split
over whether the level should be raised or not.
Households were asked if they preferred to leave the deposit insurance level alone, or whether they felt
it should be adjusted over time to keep pace with inflation. Support is much stronger for adjusting the
level over time, with over three-quarters agreeing that the level should keep pace with inflation (an
estimated 77 percent) (see Figure 11). Just 16 percent believed the level should be left alone. Support
for changing the level increases with education level, income level, and savings/investments level.
When asked if they believed the level of FDIC deposit insurance is at the right level now or if it needs to
be raised, only 27 percent believed that the insurance level is at the appropriate level today. Nearly half
believed the level should be raised (47 percent), with an additional 25 percent having no opinion.
Women were more supportive of raising the level than were men (55 percent versus 41 percent).
Support for raising the insurance level is closely correlated with income. Among households earning
less than $25,000, 34 percent believe the level needs to be raised; among households earning $75,000
or more, 60 percent feel it needs to be raised (see Figure 12).
In addition, as a household’s level of savings and investments rises, so too does support for raising the
insurance level. Just 35 percent of those with less than $50,000 in savings and investments believe the
insurance level needs to be raised, compared to an estimated 62 percent of those with investments
over $250,000. Furthermore, those with large deposits of $100,000 or more in the bank are much more
supportive of an increase in the insurance level (67 percent) than are those with smaller amounts in the
bank (45 percent). There is also some indication of regional differences, with Northeasterners being
more supportive of an increase (54 percent) than either Midwesterners (43 percent) or Southerners (45
percent).
Among household CFOs who indicated the level needs to be raised, 84 percent believe it should be
raised to at least $200,000, if not higher. However, since only 47 percent of the sample was asked this
question, only about 40 percent of the public believes the amount should be raised to at least $200,000
(see Figure 13). More specifically, 27 percent of the public feels the level is at the right level now, 5
percent feel it should be increased to $150,000, 21 percent said it should be increased to $200,000, and
an additional 19 percent said it should be raised to above $200,000. The remainder were uncertain.
Another way of understanding support for a potential level change was to present two scenarios and
ask the public how they would react. These scenarios may also help gauge the effect of a potential level
increase. In this manner, the public is not asked for a viewpoint, but rather how they would respond to a
given situation. It should be noted that asking people to estimate a response given a "potential"
scenario is quite different than a traditional opinion question. Because people do not necessarily act as
they say they will, a person’s estimate of how they may respond in a given situation is tenuous at best.
Therefore, interpretation of the data may be less reliable for these measures.
In the first scenario, the public was told that either the stock market crashes or there is a recession;
would they be prompted to move their money to insured deposits at banks or savings associations or
wouldn’t it make a difference? Overall, six in 10 said they would be more likely to move their
investments (60 percent), while 37 percent said it would not make a difference. When those who said it
wouldn’t matter were asked if their answer would change if the deposit insurance level increased, only
21 percent said it would (8 percent of the total population). Thus overall, 68 percent of the public said
they would move their money to insured deposits if there were an economic downturn or if the
insurance level were raised in the midst of an economic downturn. Those who were more likely to
change their behavior because of an increase in the deposit insurance level were Northeasterners,
those living in urban areas, African Americans and other racial minorities, Hispanics, young adults
under 25, and large depositors.
In the second scenario, the public was told that the economy and the stock market are stable, but that
they were getting close to retirement and would need to live on their retirement income. In this scenario,
would the household CFO be any more likely to move their money to insured deposits? Identical to the
first scenario, six in 10 said they would be more likely to move their investments (61 percent). Young
adults age 18 to 25 were the most likely to be willing to move their investments (70 percent). Among the
indifferent (35 percent of the population), if the deposit insurance level was increased, 27 percent said
they would be more likely to move their investments if the deposit insurance level were raised (9
percent of the total population). Thus overall, 70 percent of the public would move their money to
insured deposits if they were getting close to retirement, or if the insurance level were raised at a time
when they were getting close to retirement.
Regardless of any economic or personal scenario, if the deposit insurance level were raised, the public
would be somewhat willing to shift more money into insured deposits. Only 23 percent would be very
likely to shift more money, with another 36 percent feeling "somewhat" likely. Few subgroup differences
emerged on this measure, but large depositors (who currently have more than $100,000 in the bank)
indicated a greater willingness to move their money into insured deposits should the level be raised
than did smaller depositors (68 percent very or somewhat likely versus 57 percent for smaller
depositors) (see Figure 14).
When asked if they would be more likely to switch funds to a smaller bank with a level increase, only
two in 10 said they would (22 percent). Those living in rural areas were more apt to want move their
funds (29 percent more likely) than those living in urban (24 percent) or suburban areas (19 percent).
Large depositors also indicated a greater willingness to move their deposits to smaller institutions (31
percent).
FINDING: Although very few report keeping over $100,000 in the bank, the public does admit to
keeping funds at different banks to make sure their money is fully insured.
Among CFOs who have recently put money aside for savings or investing, a plurality keep less than
one-quarter of their funds in banks (an estimated 46 percent). An additional 27 percent keep between
one-fourth and one-half of their funds in a bank. In general, as a household’s level of savings and
investments rises, a household is more likely to keep a smaller proportion of their money in the bank,
though the actual amount they have in the bank is higher as wealth increases (see discussion below).
Two-thirds of those with more than $500,000 in savings and investments keep less than one-quarter of
that money in banks (69 percent), compared to 51 percent of those with $101,000 to $250,000 and 42
percent of those with under $50,000 in investments (see Figure 15).
Just 12 percent report keeping more than $100,000 in the bank, with most of those keeping between
$100,000 and $200,000 in the bank (66 percent). Senior citizens (18 percent) and upper income
households (21 percent) are among the most likely to have more than $100,000 in the bank.
While few currently have large amounts of money in the bank, roughly one-third of CFOs admitted to
having more than $100,000 in the bank at one time or another (30 percent). Reasons for having large
deposits included either selling a home (64 percent), receiving an inheritance (25 percent), or some
other large financial transaction (31 percent).
Those who said they did currently have over $100,000 in a bank (12 percent of the population) were
asked if any of that money was currently uninsured. One third of these large depositors said they had
deposits in the bank that were uninsured (33 percent), while most others were under the impression that
all of their money was insured (63 percent). The amount they believe is uninsured varied from less than
$50,000 (38 percent) to between $50,000 and $100,000 (23 percent) to $100,000 or more (39 percent).
Among large depositors, 58 percent said they keep money at more than one bank to make sure that
their money is fully insured, whereas 42 percent do not. Among those large depositors who do keep
their money at more than one bank to stay fully insured (7 percent of the population), more than six in
10 (63 percent) also report that they keep their deposits at any one bank to just under $100,000 in order
to stay fully insured.
A question on treasury bills revealed that about four in 10 household CFOs have considered purchasing
a U.S. Treasury security (44 percent) and of those, 30 percent said they would be more likely to buy an
insured CD if there were fewer securities to buy in the future. Among those for whom it would not make
a difference (65 percent, or 29 percent of the total population), 28 percent would be more likely to buy
an insured CD if the level of deposit insurance increased. Thus, overall, 38 percent of the public would
be willing to buy an insured CD if fewer Treasury securities were available, or if the insurance level
increased when fewer Treasury securities were available.
Technical Notes
This section of the report describes the methodology used in conducting the survey and producing
estimates based on the survey results. It covers the sample selection, administration, nonresponse,
weighting, and imputation procedures.
Gallup conducted telephone interviews with a national sample of 1,658 non-institutionalized adults in
telephone households in the United States. Data collection was conducted between November 20, 2000
and December 23, 2000, with a four-day pause during the Thanksgiving holiday.
All sample survey estimates are subject to a variety of sources of error. For example, with any randomly
selected sample, the sample statistics may deviate from the corresponding population figures because
of random sampling error. In addition, the sample results may be distorted by the effects of
noncoverage of some portion of the population, by the impact of nonresponse on the survey results,
and by errors introduced in the measurement process. In this survey, roughly 8 percent of the
household population were omitted by the sample design; most of these omissions involve households
without telephones. Another potentially serious source of error in the results is nonresponse. In general,
the bias in means and proportions due to nonresponse is a product of the nonresponse rate and the
average difference between the respondents and nonrespondents. The CASRO response rate for this
survey (30 percent) leaves room for potential nonresponse biases. Below, we provide more detailed
information about the sample selection procedure (and its omissions), nonresponse, and the weighting
procedure (which attempted to offset the effects of noncoverage and nonresponse).
Sample Selection
The sample was selected in two steps. In the first step, a sampling frame of telephone numbers was
defined and stratified based on two income levels. In the second step, a systematic national sample of
random telephone numbers was generated for each stratum. Once the sampling was complete, we
attempted to contact these numbers and speak with the Chief Financial Officer (CFO) of the household.
The survey instrument was intended to gather FDIC insurance level opinions from households.
Currently, these levels are most relevant to households in the higher income ranges (as they would be
more likely to keep this much money in an FDIC insured institution). Therefore, in order to ensure
sufficient responses to the survey questions, a higher income group was oversampled.
The stratification of the income levels was identified and communicated to Gallup’s regular vendor,
Survey Sampling, Inc (SSI). SSI maintains a Master Exchange File that contains demographic
estimates at the area code and three-digit prefix level. Along with information such as the number of
working blocks, counts of listed residential and commercial telephone numbers, the plurality ZIP code,
and plurality FIPS code, the file includes demographics such as ethnic densities, urban classification,
and mean income. To select a random digit Targeted Income Sample, SSI computes an average of the
income predictor scores (scores assigned based on census tract information) at the household level for
each telephone exchange. Then the exchanges are ranked by predicted income. With the income
defined, SSI then specified a level so that the oversample would be selected only from those exchanges
where the average of the income predictor scores were calculated to be at that level or higher.
The average income of $65,000 was chosen jointly by Gallup and FDIC. With the strata defined as
such, the proportion of exchanges in the higher income stratum was 14%. Due to the oversampling, the
ratio of sampling proportions for the two strata was 5:1. Although the average income of $65,000 was
used to define the strata, household incomes exceeding $65,000 would occur in both strata.
The second step was to select a list-assisted telephone sample from each of the two income strata
($65K and more and under $65K). Gallup typically uses SSI’s "Random A" methodology to select phone
numbers for their RDD samples. The list frame consists of all possible 10-digit telephone numbers in
working banks with three or more listed telephone numbers (commonly known as a 3+ design).
A bank is a group of 100 consecutive numbers that share their first eight digits—that is, their area code,
exchange, and the first two numbers of their four-digit suffixes. For example, all the possible telephone
numbers beginning 301-838-57_ _ form a single bank. Prior to selection, the banks are classified
according to the number of residential listings they contain. In the method developed by Casady and
Lepkowski (1993), numbers from the stratum of banks containing no residential listings ("zero" banks)
are under-sampled to reduce the number of calls to unassigned or non-working numbers. Using a
"truncated" design, the sample omitted banks with two or fewer residential listings.
A list-assisted, 3+ design would yield total undercoverage of the household population of about 8.4%
(6% for non-telephone households and another 2.4% of households with phones that are missed by the
frame). The omission of these banks sharply increases the proportion of working residential numbers in
the sample (from approximately 25 percent to about 50 percent, depending on the exact rule for
dropping banks). Evaluations of the bias associated with the omission of such banks indicate that it is
small (Brick, Waksberg, Kulp, & Starer, 1995; Giesbrecht, 1997).
In total, the targeted sample size was 1,920 completes. This number (1,920) was chosen from the
design specifications that outlined a sample such that a proportion for any subgroup that makes up 25%
of the universe can be estimated to within + 5 percentage points (or less) with a 95% confidence
interval.
In total, 12,000 numbers were ordered from SSI to account for unassigned and business numbers
(6,615 low income, 5,385 high income in total ordered). Before turning over the sample to Gallup, SSI
ran the sample numbers through an auto-dialing procedure that detected (and eliminated) some of the
unassigned and nonworking numbers, as well as modem and fax numbers. Approximately one-half of
these numbers can be identified by this process, improving the working phone rate of RDD sample by
an average of 10-15%. The remaining numbers were then run through SSI’s Business Number Purge.
In general, an average RDD sample will contain between 12-15% business numbers and this process
identifies about one-half of these business numbers. No other numbers were excluded from the sample
(for example, numbers that had already been selected by SSI for some prior studies were not
excluded).
The sample SSI provided to Gallup included 9,890 numbers. With an assumed working residential
number rate of 50 percent, and a target response rate of 50%, it was anticipated that 9,890 numbers
would be adequate to provide 1,920 completed interviews (this number accounts for the assumed
introduction of a design effect due to the oversampling of about 1.25).
For quality control purposes during interviewing, Gallup creates and releases replicates of 500
telephone numbers. In total, all 9,890 numbers were used during this study (see sample disposition
table below).
Gallup then attempted to contact persons in households linked to the sample telephone numbers. When
a person answered, telephone interviewers verified that the number was linked to a residence and
attempted to select the eligible adult (at least 18 years old). Gallup asked to speak with the adult in the
household most knowledgeable about the household’s finances. If no such person existed or if the
selected respondent volunteered that the household does not keep any money in a bank or savings
association, the household was not eligible to participate in the study. Roughly two percent of the
contacted sample was determined to be ineligible.
Nonresponse
While the field period was short and included the Thanksgiving holiday weekend, during which no
interviewing was conducted, several efforts were made to maximize response rates on this study. First,
a reverse directory look-up was performed on the sample before fielding the study to obtain addresses
for as many households as possible. Addresses were found for 35 percent of the original sample frame
(n=9,890). Pre-notification letters signed by FDIC Chairman Donna Tanoue were mailed to 4,200
households on November 20, 2000, explaining that a Gallup interviewer would be calling in the next few
days, and detailing why the household’s participation was important.
Second, an extensive call design was implemented for the study to increase the probability of contact
and cooperation. Up to seven attempts were made to contact the household, and once contact was
made, up to an additional seven attempts were made to gain cooperation with the selected respondent.
Furthermore, because of the short field period, in the last week of interviewing, all numbers that had
been dialed seven times without making contact were re-opened to make additional attempts to contact
those households. The final contact rate was 70.0 percent (4481 contacted households/ 6397 working
numbers).
To improve cooperation rates, interviewers were trained on persuasion techniques, and were asked to
be extremely careful with coding cases as refusals, since limited follow-up is conducted for refusals.
Specifically, interviewers were asked to code responses such as "I’m too busy" or "I’m not interested"
as callbacks instead of refusals, if this comment was made before the actual respondent was selected
for the study. Towards the end of the field period, a persuasion letter was mailed to households
considered as "soft" refusals (who refused to participate but seemed receptive to persuasion efforts).
The letter, signed by Max Larsen, Senior Vice President of Gallup, was mailed on December 19, 2000
to 176 households. The refusal rate on this study was 40.2 percent (1,802 refusals/ 4,481 contacted
residential numbers).
Table 1 below shows the final dispositions for the sample. A total of 5,603 of the sample numbers were
determined to be unassigned or business numbers. In addition, Gallup interviewers were unable to
reach anyone at 1,376 of the numbers to determine their residential status because of repeated busy
signals or no answers. Within the remaining numbers classified as residential, the interviewers made
contact with 4,481 households and completed 1,658 interviews. Overall, Gallup’s conservative estimate
of the response rate was 30 percent.
We estimated the response rate using the definition recommended by the Council of American Survey
Research Organizations (CASRO). Under this definition, the numerator for the response rate is the
number of completed interviews (1,658) and the denominator the estimated number of eligibles (in this
case, eligible households) in the sample. We estimate that 47.3 percent of the sample numbers were
working residential numbers (= 5,021 residential numbers /(12,000 total numbers – 1,376 non-contacted
numbers). In addition, we estimate that 97.9 percent of these residences included one or more eligible
members (1,679 eligible/1,714 screened). Overall, then, we estimate that the sample numbers were
linked to 5,557 eligible households (12,000 x .473 x .979); this yields a response rate of 29.8 percent
(1,658 / 5,557).
Table 1. Disposition of Sample Cases

Frequency
Disposition
All Sample Numbers 12,000
Prescreened as unassigned by SSI 2,110
Numbers Dialed 9,890
Business Numbers 1,330
Unassigned Numbers 2,163
No Answer/Busy 1,376
Answering Machine (Residential) 540
Other Residential Numbers 4,481
Contacted Residential Numbers 4,481
Not Screened 2,767
Refusal/Breakoff 1,802
Other (Language problems etc.) 332
Callback 633
Screened 1,714
Ineligible 35
Complete 1,658
Callback 21
Weighting
Weights are applied to survey data for a variety of reasons. Often samples are selected with unequal
probabilities, and the weights compensate for these differences in selection probabilities. In addition,
the weights may attempt to adjust for the effects of nonresponse and under-coverage.
The first weights for this study were base weights, or probability weights (w1) that reflected the
respondent’s selection probability:
where ph represents the selection probability for the sample numbers within each of the two sample
strata h; and tjh the number of telephone lines linked to the respondent’s household. To reduce the
variability in the base weights, we set the value of tjh to 9 for those cases (n=3) who reported more than
nine telephone lines. Cases where number of phone lines was not available, or where the number of
phone lines given by the respondent was implausibly high (97 or more) were edited to 1. The sampling
probability was calculated by dividing the sample size by the frame totals as provided by SSI for each of
the two income strata.
A normalized base weight was then produced by dividing each base weight by the mean of the weights,
so that the sum of the normalized weights is equal to the sample size. In applications where population
projections are not needed, or when weights cannot be reliably projected to the target population,
normalized weights are generally preferred.
The final weights were produced by adjusting the base weights for nonresponse. Gallup and FDIC
chose three sampling variables, Census region, urbanicity, and the income sampling strata to use as
categories for the adjustment cells, yielding 24 cells. Because there were relatively few high-income
rural cases, the four rural high-income cells were collapsed into one, yielding a total of 21 cells.
Within each adjustment cell Gallup computed the eligibility rate based on cases which were screened
out during interviewing. This rate was then used to compute a response rate in each cell, using a
CASRO-type formula. The nonresponse-adjusted weights (w2) were then produced as follows:
where rk is the response rate for adjustment cell k. Finally the weights were normalized as described
above. Table 2 contains the non-response adjustment factors by cell.
The reader should be aware that the nonresponse adjustment does not yield weights that project to the
number of eligible households. Although it would be possible to attempt this by post-stratifying to
adjusted Census population counts, Gallup does not believe that reliable estimates of the target
population can be constructed. For this reason (as well as the reasons described above) Gallup
recommends that the normalized weights be used whenever weighted estimates are desired.
Table 2 – Non-response Adjustment Factors

CENSUS
INCOME REGION URBAN ADJ
HIGH NORTHEAST SUBURBAN 5.94054
HIGH NORTHEAST URBAN 8.625
HIGH MIDWEST SUBURBAN 5.2454
HIGH MIDWEST URBAN 5.33333
HIGH SOUTH SUBURBAN 4.93082
HIGH SOUTH URBAN 6.28947
HIGH WEST SUBURBAN 6.72727
HIGH WEST URBAN 8.95
HIGH ALL RURAL 3.84615
LOW NORTHEAST RURAL 6.55556
LOW NORTHEAST SUBURBAN 5.03226
LOW NORTHEAST URBAN 8.33333
LOW MIDWEST RURAL 4.67416
LOW MIDWEST SUBURBAN 4.60638
LOW MIDWEST URBAN 6.12698
LOW SOUTH RURAL 4.69369
LOW SOUTH SUBURBAN 5.70064
LOW SOUTH URBAN 6.80808
LOW WEST RURAL 7.56
LOW WEST SUBURBAN 6.0119

Imputation
1. General Guidelines
There were two methods used to edit and impute the data for the FDIC Insurance Study. A
group of opinion questions where the respondent refused to answer were changed to Don’t
Know. After editing, a group of factual items where the respondents refused to answer or said
they didn’t know were imputed using a hotdeck. Both procedures are described in detail below.
2. Editing
There was one edit made to the data that was not flagged, in order to make some respondents’
answers logically consistent. If a respondent indicated in QN25 that they currently had more
than $100,000 of total deposits in one or more banks, then QN27 was edited to be consistent.
(QN27 asked if the respondent had ever held more than $100,000 in banks.) There were 77
cases that were changed as a result.
Additionally, there were several opinion questions where respondents refused to give an
answer. Personal opinions were treated differently than factual questions for purposes of
imputation. For opinion items, it was assumed that refusal was equivalent to lack of any
knowledge or opinion on the subject. They were therefore coded as DK, and flagged
appropriately. There was also one question where both DK and refusal were coded as Other,
and one question where both DK and refusal were coded as None.
It should be noted that DK is considered a valid and important response to opinion questions,
and therefore these responses were not imputed. A list of the questions and which values were
altered can be found in Table 3 below.
3. Hotdeck Imputation
Factual items where the respondent either answered DK or refused were candidates for
hotdeck imputation. The specific method used was a nearest neighbor hotdeck, where groups
of missing items were imputed from a single donor by sorting the cases using a list of
covariates, then filling in responses from the nearest complete case.
Covariates used for sorting were chosen using an automated search of bivariate correlations.
For each variable a list of the ten largest correlations (in absolute value) was generated. In
order to make use of only relatively strong correlations and to make the data processing more
efficient, the number of variables used to sort the hotdeck was limited to three. Because of its
strong correlation with many questions, a constructed household savings variable was used in
all hotdecks, leaving two additional variables that were chosen on a per variable basis. When
groups of variables were imputed together, Gallup tried to pick sorting variables that had high
correlations with all variables in the group.
Question groups and their order were chosen with several goals in mind. The first was to
include as many related questions together in the same group as possible. The second was to
follow the order of the questionnaire whenever possible. (One exception to this rule was QND7,
which was imputed first because of its usefulness as a covariate for later imputation.) The third
goal was to impute items that were missing as a result of an imputed response to a filter
question. For example, QN29 (Do you currently have any deposits that are uninsured?) and
QN30 (If yes to QN29, approximately how much do you currently have in your accounts that is
beyond the insurance limit?).
Overall, 461 cases had at least one value imputed by hotdeck (27.8%.) The remaining 1,197
cases were eligible hotdeck donors and constitute the entire donor pool. A table of question
groups listed in the order in which they were imputed, along with the sorting variables used,
can be found in Table 4. Also included below is a report of the number of valid responses and
imputed cases for each question (Table 5) and a distribution of the total number of times each
case was a donor for hotdeck imputation (Table 6.)
Table 3 – Response Edits
Question Original Response Edited Value

QN2C REF DK
QN3 REF DK
QN4 REF DK
QN6 REF DK
QN7C REF DK
QN9 REF DK
QN11A REF DK
QN11B REF DK
QN13_1 DK, REF OTHER
QN15 REF DK
QN17 REF DK
QN19 REF DK
QN20 REF DK/No opinion
QN21 REF DK
QN22 REF DK
QN23 REF DK
QN28E DK, REF None/No other reason
QN32 REF DK
QN33 REF DK
Table 4 – Hotdeck Imputation
Question Group Sort Variables

QND7 SAVINGS QN14 QND4
QN10 SAVINGS QND7 QND4
QN11A QN11B QN11C QN12 QN13_1 QN13_2 QN13_3
QN14 QN24 SAVINGS QN8A QN2C
QN25 QN27 SAVINGS QND7 QN5
QN26 QN29 SAVINGS QND7 QN5
QN28A QN28B QN28C QN28D QN28E SAVINGS QN2A QN2B
QN31 QN33 SAVINGS QN25 QN10
QN29 (Note: the original version of this question was
preserved.) SAVINGS QND7 QN5
QN30 SAVINGS QND7 QN5
QN32 SAVINGS QN25 QN10
QND3 QND4 QND5 QND6 SAVINGS QND7 QND1
SAVINGS (Note: constructed savings variable.) QND7 QND3 SAVE2
Table 5 – Number of cases imputed for each question
Total Valid
Variable Responses Responses Edited Hotdeck
QN2A 1658 1658 0 0
QN2B 1658 1658 0 0
QN2C 1658 1656 2 0
QN2D 1658 1658 0 0
QN2E 1658 1658 0 0
QN2F 1658 1658 0 0
QN2G 1658 1658 0 0
QN3 1658 1656 2 0
QN4 1025 1023 2 0
QN5 1658 1658 0 0
QN6 1658 1654 4 0
QN7A 922 922 0 0
QN7B 922 922 0 0
QN7C 922 921 1 0
QN7D 922 922 0 0
QN8A 564 564 0 0
QN8B 564 564 0 0
QN8C 564 564 0 0
QN9 1658 1652 6 0
QN10 1658 1603 0 55
QN11A 1163 1124 1 38
QN11B 1163 1124 1 38
QN11C 1163 1125 0 38
QN12 1163 1111 0 52
QN13_1 393 351 4 38
QN13_2 389 351 0 38
QN13_3 65 27 0 38
QN14 8 -30 0 38
QN15 1658 1649 9 0
QN16 660 660 0 0
QN17 1658 1653 5 0
QN18 652 652 0 0
QN19 1658 1657 1 0
QN20 1658 1655 3 0
QN21 846 845 1 0
QN22 1658 1653 5 0
QN23 1658 1653 5 0
QN24 1163 1068 0 95
QN25 1658 1500 0 158
QN26 238 169 0 69
QN27 1658 1540 0 118
QN28A 511 455 0 56
QN28B 512 460 0 52
QN28C 512 460 0 52
QN28D 512 458 0 54
QN28E 512 452 12 48
QN29 238 203 0 35
QN30 86 61 0 25
QN31 1658 1578 0 80
QN32 498 451 11 36
QN33 1658 1619 0 39
QN34 795 779 0 16
QN35 545 534 0 11
QND1 1658 1658 0 0
QND2 1658 1658 0 0
QND3 1658 1583 0 75
QND4 1658 1628 0 30
QND5 1658 1627 0 31
QND6 1658 1606 0 52
QND7 1658 1395 0 263
QND8 1658 1429 0 229
QND9 1011 962 0 49
QND10 669 645 0 24
QND11 344 336 0 8
QN29NODK 238 226 0 12
Table 6 – Frequency of hotdeck donations
Number of
donations Frequency Percent
0 980 59.11
1 433 26.12
2 120 7.24
3 42 2.53
4 25 1.51
5 25 1.51
6 11 0.66
7 3 0.18
8 6 0.36
9 3 0.18
10 3 0.18
11 2 0.12
13 1 0.06
14 1 0.06
15 1 0.06
18 1 0.06
32 1 0.06
Total 1658 100
Last Updated 04/26/2001 supervision@fdic.gov
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Creating Consumer Awareness in Life Insurance

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70 q Bimaquest - Vol.

VIII Issue I, January 2008

CREATING CONSUMER AWARENESS IN

Healthcare Insurance Awareness in

Indian Health Insurance is primarily classified into 2 categories:

Cashless hospitalization is a specialized service provided by an insurer wherein an individual is

Cashless hospitalization can be of two types:

• Emergency hospitalization: It is a sudden hospitalization that may be either an emergency or

Re-imbursement means to repay or to compensate. Thus, Medical Re-imbursement means to

Essential Guidelines for Availing individual Health Insurance Policy:

• To understand whether it is a co-insurance policy: Before availing a health policy, the

Importance of Health Insurance

• Provides security to human life which is of prime importance to any individual.

• Prevention and minimization of unforeseen losses.

• Access to quality healthcare.

• Means of savings and a safe investment option.

• Provides financial stability in life.

• A tax-saving instrument that significantly contributes in reduction of tax deductions.

• Reduces tensions and stress caused on account of hospitalization.

• Greatly contributes in leading a stress-free life.

Fortis Healthcare Plans Major Service

Health Insurance Will Cover Every Indian

Health Insurance News

Insurance Regulatory and Development

Jump to: navigation, search

[edit] ' Expectations

1. To protect the interest of and secure fair treatment to policyholders.

Duties,Powers and Functions of IRDA

 Chairman: Hari Narayana is the current Chairman of IRDA.

Chairman selection process

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY ACT, 1999

 Consumer News & Information

 Bank Data & Statistics

 Mission & Purpose

Household Survey on Deposit Insurance Awareness, April 2001

Prepared by: Authors:

1. Awareness of FDIC and FDIC-Insured Products & Services

2. Preference for Obtaining Information About FDIC Deposit Insurance

3. Preference for Obtaining General Deposit Insurance Information

4. Investing Decisions and FDIC Insurance

wealth is taken into account.

5. Support for Changing the Insured Deposit Level

6. Current Banking Habits

1. Awareness of FDIC and FDIC-Insured Products & Services

2. Preference for Obtaining Information About FDIC Deposit Insurance

wealth is taken into account.

5. Support for Changing the Insured Deposit Level

6. Current Banking Habits

Table 1. Disposition of Sample Cases

All Sample Numbers 12,000

Prescreened as unassigned by SSI 2,110

Numbers Dialed 9,890

Business Numbers 1,330

Unassigned Numbers 2,163

Answering Machine (Residential) 540

Other Residential Numbers 4,481

Contacted Residential Numbers 4,481

Not Screened 2,767

Other (Language problems etc.) 332

Table 2 – Non-response Adjustment Factors

Table 3 – Response Edits

Question Original Response Edited Value