Insurance Regulatory and Development Authority of India (IRDAI)

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Overview:

The Insurance Regulatory and Development Authority of India (IRDAI) recently asked the general insurers to talk to transport authorities of 28 states and eight union territories to provide mandatory covers for the uninsured vehicles.

Why in News?

  • ·The Insurance Regulatory and Development Authority of India (Irdai) has recently come up with a 'zero-tolerance' policy to achieve 100% motor insurance.

 

About IRDAI:

  • It is an autonomous and statutory body established under the IRDA Act 1999.
  • It is the apex body that supervises and regulates the insurance sector in India.
  • Objective: To protect the interests of policyholders, to regulate, promote and ensure orderly growth of the insurance industry in India.
  • Nodal Ministry: Ministry of Finance.
  • Head Office: Hyderabad.
  • Composition: IRDAI is a 10-member body- a Chairman, five full-time members, and four part-time members appointed by the Government of India.
  • Functions:
    • To have a fair regulation of the insurance industry while ensuring financial soundness of the applicable laws and regulations.
    • Frame regulations periodically so that there is no ambiguity in the insurance industry.
    • Registering and regulating insurance companies;
    • 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 the maintenance of solvency margin by insurance companies;
    • Ensuring insurance coverage in rural areas and of vulnerable sections of society.

 


Q1) What is meant by Insurance?

Insurance is a legal agreement between an individual and the insurance company, under which, the insurer promises to provide financial coverage (Sum assured) against contingencies for an amount (premium). The types of insurance in India can be broadly divided into two categories:General Insurance and Life Insurance.

Source: Ask state govts to provide mandatory cover for uninsured vehicles: Irdai