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Role Of IRDAI In India’s Insurance Industry

Team AckoJan 17, 2024

The Insurance Regulatory and Development Authority of India (IRDAI) is an autonomous body located in Hyderabad. It came into existence from the Insurance Regulatory and Development Authority Act, 1999. This organization is entrusted with the responsibility of regulating the insurance industry. Apart from regulation, it also promotes the development of the industry.

Read ahead to know more about IRDAI.

Contents

IRDAI’s Mission Statement
Functions of IRDAI

IRDAI’s Mission Statement

IRDAI works towards monitoring and developing the insurance industry and ensuring fair treatment.

Fair Treatment
Every industry needs an all-encompassing entity that takes the responsibility of ensuring that its stakeholders’ interests are always looked after. In the insurance industry, policyholders are the ultimate stakeholders and the industry exists to serve them. IRDAI ensures that the policyholders are treated fairly.

Foster Growth
IRDAI works towards fostering growth of the insurance industry. It ensures that this growth is speedy as well as in an orderly fashion. Necessary decisions are taken promptly without compromising the interests of the citizens. It also provides long-term funds to facilitate economic growth.

Monitor Functioning
The insurance industry needs certain standards that act as a guideline. These standards are moral as well as regulatory. IRDAI monitors the functioning of the Indian insurance industry from promoting fair dealing and ensuring integrity to maintain financial soundness and competence of the players involved.

Ensuring Claim Settlement
For policyholders, claim settlement is the most important function of an insurance company. Insurance is not an over the counter product or a service that offers instant gratification. In a way, claim settlement is the point of exchange as far as policyholders are concerned. Thus, policyholders should not suffer during this process. Thus, IRDAI has created a grievance redressal machinery to tackle issues associated with claim settlement. It also works proactively to prevent insurance fraud.

Prudential Regulation
Be it about insurance-related activities in the financial market or promoting self-regulation in the industry, IRDAI focuses on prudential regulation. It also takes adequate action as and when required.

Functions of IRDAI

Here’s a list of important functions performed by IRDAI.

Issuing registration certificates to applicants. Also, manage other tasks related to registration such as renewal, modification, suspension, withdrawal, etc.
Ensuring policyholders are treated fairly.
Apart from the insurance companies and policyholders, insurance intermediaries are also a part of the insurance ecosystem. IRDAI specifies their code of conduct as well as provides adequate training for insurance intermediaries.
Specifying a code of conduct for other entities in the industry such as surveyors and loan assessors.
Keeping an eye on professional organizations associated with insurance as well as reinsurance business.
Conducting enquiries, audits, and inspection
Setting a standard format for accounting
Looking over the workings of the Tariff Advisory Committee

Stay Informed

You can visit IRDAI’s official website for information pertaining to car insurance, two-wheeler insurance, property insurance, etc. You can also check a list of IRDAI registered insurance companies on the website. Whether you are purchasing car insurance, two-wheeler insurance, property insurance, travel insurance, health insurance, or any other type of insurance in India, make sure to purchase it from an IRDAI registered insurance company.

IRDAI is an authoritative entity that keeps a watchful eye on the Indian insurance sector’s functioning. This government body not only penalizes defaulters but also undertakes measures to inform policyholders about insurance in general. The IRDAI website is filled with information pertaining to insurance and insurance companies. Apart from uploading handbooks and journals, the website has a dedicated Frequently Asked Questions page for quick reference. IRDAI also publishes annual reports and information pertaining to Ombudsman.