Insurance Regulatory and Development Authority of India (IRDAI)

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Overview:

The Insurance Regulatory and Development Authority of India (IRDAI) is planning to unveil a host of new measures, including 100 per cent cashless claim settlement in health cover.

About Insurance Regulatory and Development Authority of India (IRDAI):

  • It is a statutory body formed under an Act of Parliament, i.e., Insurance Regulatory and Development Authority Act, 1999 (IRDAI Act 1999) for overall supervision and development of the Insurance sector in India.
  • It is also responsible for registering and/or licensing insurance, reinsurance companies and intermediaries according to the regulations. 
  • Entities regulated by IRDAI:
    • Life Insurance Companies - Both public and private sector Companies
    • General Insurance Companies - Both public and private sector Companies. Among them, there are some standalone Health Insurance Companies which offer health Insurance policies.
    • Re-Insurance Companies
    • Agency Channel
    • Intermediaries which include the following:
      • Corporate Agents
      • Brokers
      • Third Party Administrators
      • Surveyors and Loss Assessors.
  • Composition: It is a 10-member body- a chairman, five full-time members and four part-time members appointed by the Government of India.
  • To protect the interests of policyholders, the IRDAI was granted significant responsibilities including
    • Efficiently conducting insurance business and protecting the interests of the policyholders in matters concerning assigning of policy, nomination by policyholders, insurable interest, settlement of insurance claim, surrender value of the policy and other terms and conditions of contracts of insurance.
    • Approving product terms and conditions offered by various insurers.
    • Regulating investment of funds by insurance companies and maintaining a margin of solvency.
    • Specifying financial reporting norms of insurance companies.
    • Ensuring insurance coverage is provided in the rural areas and also to the vulnerable sections of society.
  • IRDAI’s Head Office is at Hyderabad.

 


Q1) What are ReInsurance Companies?

The term reinsurer refers to a company that provides financial protection to insurance companies. Reinsurers handle risks that are too large for insurance companies to handle on their own and make it possible for insurers to obtain more business than they would otherwise be able to. Reinsurers also make it possible for primary insurers to keep less capital on hand needed to cover potential losses.

Source: IRDAI plans 100% cashless health claims, more long-term products, flexible plans for old people