PRESENTED BY :-

RUCHIR GUPTE RUPAL HATKAR MEHUL M VEDANT NAVALKAR CHANDNI SHETTY JIGAR BHANUSHALI

06 07 17 24 39 -

PRESENT ED TO: PROF. MAYANK hindocha

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INDEX
SR NO.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

PARTICULARS
INTRODUCTION ADVISSORY COMMITEE CHAIRMAN SELECTION PROCESS CONSTITUTION OBJECTIVES DUTIES AND POWERS EXPECTATION APPOINTMENT OF AGENTS REGISTRATION CANCELLATION

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2 3 4 5 5 6 7 8 9 10

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INTRODUCTION:

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. The insurance act 1938 provide that the government should appoint a controller of insurance to ensure that insurance company registered under the act, comply with the various provisions of the act. His duties include approval of the terms and conditions of various plans being offered by the companies, including the adequacy on the basis of premium. Scrutiny of the various returns on the investments, annual accounts, periodicals, actuarial valuations etc. required to be submitted by the companies. The controller also has powers to order special investigations and also to take over the management of the companies. After the nationalization of the insurance industry the responsibilities of supervision had reduced considerably. But with the proposal to open up the industry, following the policy of liberalization and globalization, and the likelihood of private companies being permitted to transact insurance business in India, it became necessary to establish an authority to regulate insurance corporations. The government of India in April 1993 appointed the committee of reforms in insurance sector with shri R.N.malhotra, a former
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governor of the reserve bank of India as its chairman. The committees recommendations the government set up a regulatory body known as the INSURANCE REGULATORY DEVELOPMENT AUTHORITY. The insurance bill was passed in both houses of parliament, after the subject matter was discussed and debated and subsequently government enacted the act viz, insurance regulatory and development authority act. 1999. The insurance regulatory and development authority act, 1999 seeks to open the insurance sector for private companies with a foreign equity of 26 percent. It is also aimed at ending the monopoly of the Life Insurance Corporation and general insurance corporations in the insurance sector of the country.

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:

Chiarman: 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.

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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.

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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.

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Constitution of IRDA

The IRDA shall consist of not more than nine members, not more than five members of whom, including the chairperson to be full time. The whole time members shall hold office for 5 years or until age of 62(65 in the case of chairperson) whichever is earlier, part time members will hold office not more than 5 years. The above said members to be appointed by the central government from among persons of ability 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.

OBJECTIVES OF IRDA

The main objectives of INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY are: 1. To take care of the policy holders interest. 2. To open the insurance sector for private sector. 3.To ensure continued financial soundness and solvency. 4. To regulate insurance and reinsurance companies.
5.

To eliminate dishonesty and unhealthy competition.

6. To supervise the activities of intermediaries. 7. To amend the insurance act, 1938, the life insurance corporation act,1956 and the general business nationalization act, 1972
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DUTIES

AND POWERS OF IRDA:

For smooth running of insurance business, the regulatory authority has been vested with adequate power and duties. The duties ad powers of IRDA are: 1. To regulate, promote and ensure orderly growth of insurance business. 2. To exercise all powers and functions of the controller of insurance. 3. To protect the interest of the policy holders in settlement of claims and terms and conditions f policies. 4. To promote and regulate professional organization connected with insurance business. 5. To call for information from, undertake inspection and conduct investigation including audit of the insurer, intermediaries and other connected organization and persons.
6.

To control an regulate the rates and terms and condition that may be offered by the insurers in respect of general insurance matters, not to controlled by the tariff Advisory committee under section 64(U) of the insurance act.

7. To prescribe the manner and form in which account will be maintained and submitted by insurance and intermediaries. 8. To regulate investment of funds.
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9. To regulate margins of solvency. 10. To adjudicate and dispute between insurers and intermediaries.

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.
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8. To bring about optimum amount of self-regulation in day to day working of the industry consistent with the requirements of prudential regulation.

ROLE OF IRDA IN APPOINTMENT OF AGENTS

The condition of appointment of agents are regulated by LIC of India(agents) regulation, 1972. The procedure for appointment and renewable of licenses of agents stipulated in IRDA insurance agents regulation, 2000 will have to be strictly adhered to form the date of notification. Accordingly,
1.

A person (natural person, registered society, panchayat, co-operative society or firm or company registered under companies act, 1956.)can be appointed as insurance agent, in any place within India for soliciting or procuring insurance business, by the insurer or a designated person provided he holds a valid certificate of license issued by IRDA at the time of appointment.

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2.

The certificate of license issued by IRDA as a person that procedure prescribed in the insurance agent regulation 2000 designated person (appointed by insurance having authority to appoint agent, and notified to the authority) will receive and forward the application for issue or renewal of license, with requisite fees prescribed by IRDA, to IRDA in manner prescribed in the insurance agent regulation,2000

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Registration under IRDA

The accompanied by: The certified copy of memorandum and article of association. Name, address and occupation of directors. A Statement of the classes of insurance business done/ to be done along with statement deposits with the reserve bank of india. For life business a sum equivalent to one person of total gross premium not exceeding 10 crores returns in Indian any financial year. For general business 3percent of total gross premium not exceeding 10 crores. Reinsurance business RS 20 crore; RS 1,00,000. For co-operative life insurance business / assurance companies should be RS 2,00,000. A declaration verified by an affidavit by the principal office of the insurer that the requirement of paid up capital (RS 100 crore and 200 crore for life/ general and reinsurance business respective ) RS 250 crore for reinsurance business or working capital. A Certified copy of the list prospectus if any and

Standard policy form of insurer and the statements of the assured rates, advantages, terms and conditions to be offered in connection with insurance policy, together with a certificate in connection with life business by an actuary.
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The receipt showing payment of fee (as determined by IRDA regulation) not exceeding RS 50,000 for each class of business.

Such other document as may be specified by IRDA.

Cancellation of registration

He fails to comply with the requirement of deposits with the RBI. He fails to comply with the requirement relating to sufficiency of asset (assets-liabilities). The whole of is deposits has been refunded to him on court orders, when he case to carry on business and liabilities has been satisfied / provided for. He defaults in complying with or contravenes any requirement of insurance act/any rule/order made or direction issued there under. The IRDA has reason to believe that any claim are unpaid for 3 months after final court order in INDIA. He carries on any other business. His business has been transferred to any other person/amalgamated with any other insurer. He defaults in complying with any other direction issued/order maid by IRDA. He defaults in complying with or contravenes any requirement of companies act/LIC act/GIC act/FEMA act.
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