Insurance Law

INSURANCE LAW
Insurance Regulatory and Development

Authority (IRDA)
PRESENTED BY,
ARCHANA.N
BBALLB-8THSEM
 About Insurance
 History of IRDA
 Mission of IRDA
 Regulatory frame work
 Composition of authority
 Removal from office
 Functions
 Duties and powers of IRDA
WHAT IS INSURANCE?
 In simple words it means it’s a contract between two

parties first party is insurer (insurance company) and
other party is insured (policy holder).
 An insurer is a company selling the insurance; the
insured, or policyholder, is the person or entity buying
the insurance policy.
 The amount to be charged for a certain amount of
insurance coverage is called the premium.
HISTORY OF IRDA
 The IRDA Act, 1999 was passed as per the major

recommendation of the Malhotra Committee report
(1994) which recommended establishment of an
independent regulatory authority for insurance sector in
India.
 Later, it was incorporated as a statutory body in April,
2000.
 The IRDA Act, 1999 also allows private players to enter
the insurance sector in India besides a maximum foreign
equity of 26 per cent in a private insurance company
having operations in India.
Insurance Regulatory and Development
Authority (IRDA)
 Insurance Regulatory and Development Authority
(IRDA) is an autonomous apex statutory body which
regulates and develops the insurance industry both (Life
and Non-Life Insurance Companies) in India.
 It was constituted by a Parliament of India act called
Insurance Regulatory and Development Authority Act,
1999 and duly passed by the Government of India and
was amended in 2002 to incorporate some emerging
requirements as well as to overcome some deficiencies
in the entire process.
 The agency operates from its headquarters at
Hyderabad, Telengana where it shifted from Delhi 2001.
MISSION OF IRDA
Major Objectives Of The IRDA :
 To promote orderly growth of insurance industry in the

country, including registration of the insurance
companies
 To administer the provisions of the insurance act
 To protect interests of policy holders and investors
 To device control activities needed for smooth
functioning of the insurance companies including
investment of funds and the solvency requirements to be
maintained by insurance companies
 To adjudicate (act as an judge) on disputes
COMPOSITION OF AUTHORITY
 As per the section 4 of IRDAI Act' 1999, Insurance
Regulatory and Development Authority of India (IRDAI,
which was constituted by an act of parliament) specify the
composition of Authority The authority shall consist of
followings :
 a. A Chairperson : - having Knowledge in Life , general
Insurance - Shall hold an office for the term of 5 yrs. - the
age of retirement is 65 years.
 b . Not more than five whole time Members : - having
Knowledge in Life , general Insurance - Shall hold an office
for the term of 5 yrs. - the age of retirement is 62 yrs.
 c. Not more than four -part time members : These persons
shall be appointed by the Central Govt.
Removal from office
 The Central Government may remove from office any member who-
 is, or at any time has been, adjudged as an insolvent; or
 has become physically or mentally incapable of acting as a member;
or
 has been convicted of any offence which, in the opinion of the
Central Government, involves moral turpitude; or
 has acquired such financial or other interest as is likely to affect
prejudicially his functions as a member
 No such member shall be removed under clause (d) or clause (e) of
sub-section (1) unless he has been given a reasonable opportunity of
being heard in the matter.
Functions of IRDA
As defined by the IRDA act,1999,IRDA performs the following
broad functions:
 Ensure orderly growth of the insurance industry
 Protect interest of policy holder
 Issue consumer protection guidelines to insurance companies
 Grant modify, and suspend license for insurance companies
 Lay down procedures for accounting polices to be adopted by
the insurance companies
 Inspect and audit of insurance companies and other related
agencies
 Re-insurance limit monitoring
Functions of IRDA
 Screening of accounting standards, transparency
requirements in reporting
 Ensure the health of the industry by preventing sickness
through appropriate action
 Publish information about the industry
 Prescribe qualification and training needs of agents
 Monitor the charges for various services by insurance
company
 Monitor investment
Duties and Responsibilities of IRDA
 Issue to the applicant a certificate of registration, renew,

modify, withdraw, suspend or cancel such registration
 Protection of the interests of the policy holders in
matters concerning assigning of policy, nomination by
policy holders, settlement of insurance claim, surrender
value of policy and other terms and conditions of
contracts of insurance
 specifying requisite qualifications, code of conduct and
practical training for intermediary or insurance
intermediaries and agents
 specifying the code of conduct for surveyors and loss
assessors
Duties and Responsibilities of IRDA
 promoting and regulating professional organizations

connected with the insurance and re-insurance business
 levying fees and other charges for carrying out the
purposes of this Act
 calling for information from, undertaking inspection of,
conducting enquiries and investigations including audit
of the insurers, intermediaries, insurance intermediaries
and other organizations connected with the insurance
business;
CASE LAW
 M/S. Radiant Overseas Pvt. Ltd. v/s Insurance

Regulatory & Development Authority Of India &
Another

Insurance Law

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INSURANCE LAW

Insurance Regulatory and Development

 In simple words it means it’s a contract between two

 The IRDA Act, 1999 was passed as per the major

 To promote orderly growth of insurance industry in the

 Issue to the applicant a certificate of registration, renew,

 promoting and regulating professional organizations

 M/S. Radiant Overseas Pvt. Ltd. v/s Insurance

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