IRDA Role in insurance industry Insurance Regulatory and Development Authority India www.irda.gov.in
IRDA Insurance Regulatory and Development Authority (IRDA) India
Insurance Regulatory and Development Authority (IRDA) India, is a state-owned authority, responsible for giving license and supervising insurance companies in India.It was constituted by Parliament of India act called Insurance Regula
tory and Development Authority Act, 1999, with the main purpose to regulate the insurance industry of India.IRDAI’s headquarter is situated in Hyderabad.
Every organization, either commercial or non-profit based, has a mission statement which depicts the reasons for which the organization was formed and the work of the organization carries. It is a guidance tool, which keeps the organization on the track to make its way to achieving its vision and other set objectives.
IRDIA’s mission is, has followed as mentioned by the authority itself.
· To protect the interest of and secure fair treatment to policyholders.
· To bring about the 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 the growth of the economy.
· To set, promote, monitor and enforce high standards of integrity, financial soundness, fair dealing and competence of those it regulates.
· To ensure speedy settlement of genuine claims, to prevent insurance frauds and other malpractices and put in place effective grievance redressal machinery.
· 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.
· To take action where such standards are inadequate or ineffectively enforced.
· To bring about optimum amount of self-regulation in the day-to-day working of the industry consistent with the requirements of the prudential regulation.
The authority is composed of ten members who are appointed by the Government of India. These are:
· A Chairman
· Five whole-time members
· Four part-time members
Duties, Powers and Functions of IRDA
IRDA is the government based organization, so all the duties and functions IRDA performs or the power it has been according given to it by Act which was used at the time of its formation. The main functions are to regulate, promote, issues license to new insurance companies, make sure that the insurance companies working procedures are according to the law and help the industry to grow.
It is also responsible for protecting the interest of policyholders by continuously monitoring insurance company’s functions and the products they offer. Also responsible for adjusting disputes occurred between the insurer and the insured.
It also creates law for the selection of agents by insurance companies. IRDA is responsible for preparing reports and publishing them for public viewing about the industry performance. The reports are mostly published on the yearly basis. These reports give in an in-depth analysis of the industry in general and of an insurance company’s performance, for a specified period, in particular.
IRDA is responsible for creating laws and policies for India’s insurance industry and making sure that these laws and policies are not violated by any insurance company. In case an insurance company violates the law, levied by IRDAI, IRDAI has the power to cancel the license of that company or impose the heavy penalty.
All insurance companies can deposit 100Crores at IRDA. to establish an insurance company this is the must. if company loss IRDA can settle claims with this budget. but lot of insurance of showing more than 700 Crores in their company including ICICI, HDFC, reliance, max Bupa and other etcc.. except LIC.