Page 111 - DCOM309_INSURANCE_LAWS_AND_PRACTICES

Insurance Laws and Practices

Notes Self Assessment

Fill in the blanks:
1. The Office of ……………………………….. was established to implement this Act.

2. The Malhotra committee submitted its report in 1994 which recommended that
…………………….. companies be allowed to operate in India.

7.2 Overview of IRDA Act

Let’s have an overview of the IRDA Act. The IRDA (Insurance Regulatory and Development
Authority) is the national regulatory body for Insurance industry (both Life and Non-Life
Insurance Companies) under the auspices of Government of India, situated at Hyderabad. IRDA
was established by an Act enacted in Indian Parliament known as IRDA Act 1999 and was
amended in 2002 to incorporate some emerging requirements as well as to overcome some
deficiencies in the entire process.

Notes The mission of IRDA as stated in the Act is as follows:
(a) To protect the interests of the policyholders,
(b) To promote, regulate and ensure orderly growth of the insurance industry and for
matters connected therewith or incidental thereto, and

(c) Conduction of insurance businesses across India in an ethical manner.

Full force and maximum utility of various institutions like Advisory Committee and self-
regulatory organizations are not yet realized in India as the regulator seems to be in a long-
learning mode. Due to over delegations, it is the individual incumbents that decide the pace and
extent of utilization of prudential and statutory bodies.
Research on insurance sector is limited to opinion being sought through legacy channels. The
Indian market mulls and patiently awaits the revision of Insurance Act along with establishment
meaningfully functioning regulatory bodies that are devoid of excess delegation and subjective
localization of development agencies.

Did u know? Unlike other Indian administrative regulatory bodies which are highly
proactive, IRDA is perceived as a silent regulator with activities confined to its local
existence.

Self Assessment

Fill in the blanks:
3. It is the individual incumbents that decide the pace and extent of utilization of
………………………… and ………………………………… bodies.
4. Research on insurance sector is limited to opinion being sought through
……………………… channels.

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