Insurance Regulatory and Development Authority in India is an agency of government of India for insurance sector’s supervision and development. It regulates the Indian insurance Industry to protect the interests of policyholders and ensures the proper working. IRDA was set up as an autonomous apex statutory body. It’s prime functions are to protect the interests of policyholders, to regulate, promote and ensure upliftment of the insurance industry. It frames the guidelines for insurance industry under section 114A of the Insurance Act 1938.
From the year 2000, IRDA has registered new insurance companies for healthy growth or development of the industry. Some other functions and duties of IRDA, according to the act, are as follows:
• Protecting policyholders’ interests.
• Licensing and establishing norms for insurance intermediaries.
• Promoting professional organizations in Insurance.
• Regulating and overseeing premium rates and terms of non-life insurance covers.
• Specifying financial reporting norms of insurance companies.
• Regulating investment of policyholders’ funds by insurance companies.
• Ensuring and maintaining the solvency margin by insurance companies.
• Ensuring Insurance coverage in rural areas and of vulnerable sections of society.
History of Insurance, in India, has got very deep roots. People in ancient times used to pool resources so that they could be redistributed in times of calamities such as fire, floods, epidemics and famine. The Indian Insurance market today consists of 52 insurance companies of which 24 are in Life Insurance business and 28 are non-life insurers. And Life Insurance corporation (LIC) is the sole public sector company among the life insurers.
IRDA is statutory body for regulating and developing the insurance industry in India. It was constituted by ‘Insurance Regulatory and Development Authority Act, 1999. The agency operates from it’s headquarter at Hyderabad, Telangana. Earlier it had it’s headquarter in Delhi till 2001. As per the IRDA Act, section (4), IRDA is a ten-member body, consisting of: A chairman, Five whole-time members and Four part-time members and all the members are appointed by the Government of India.