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What is IRDAI and its Function?

The primary function of IRDAI is to protect the interests of policyholders while
maintaining the stability and efficiency of the insurance market. It achieves this by
performing various roles and responsibilities:
Regulation and Supervision

IRDAI formulates and enforces regulations and guidelines that govern the conduct of
insurance companies, intermediaries, and other entities operating in the insurance
sector. It grants licenses to insurance companies, sets capital requirements, and
oversees their functioning to ensure compliance with applicable laws.
Policyholder Protection

One of the key objectives of IRDAI is to safeguard the interests of policyholders. It

sets norms for the fair treatment of policyholders, including grievance redressal
mechanisms. IRDAI ensures that insurers uphold their commitments toward
policyholders and operate transparently and ethically.
Product Approval

IRDAI reviews and approves insurance products and policies before they are
introduced in the market. This process ensures that the products offered are fair and
transparent and provide adequate coverage to policyholders. The authority also
regulates premium rates to prevent unfair pricing practices.
Financial Stability

IRDAI monitors the financial health and solvency of insurance companies to ensure
their ability to meet policyholder claims and obligations. It establishes prudential
norms and conducts regular inspections and audits to assess the financial soundness
of insurers.
Market Development

The IRDAI works towards promoting the development and expansion of the
insurance sector in India. It encourages innovation, diversification, and technological
advancements in insurance products and services. The authority also facilitates the
entry of new players and promotes healthy competition within the industry.
Consumer Awareness
IRDAI plays an active role in creating awareness among the public about insurance
products, their benefits, and the need for insurance. It conducts campaigns,
publishes educational materials, and implements initiatives to enhance financial
literacy and empower consumers to make informed decisions.
Intermediary Regulation

The IRDAI regulates insurance intermediaries such as agents, brokers, and third-
party administrators. It establishes qualification requirements, a code of conduct, and
guidelines for their operations, ensuring their adherence to ethical practices and
professionalism.
International Cooperation

IRDAI collaborates with international insurance regulators and organizations to

exchange knowledge, best practices, and regulatory experiences. This cooperation
helps in harmonizing insurance regulations, addressing cross-border challenges, and
promoting global standards within the Indian insurance industry.