The Insurance Regulatory and Development Authority (IRDAI) of India is an independent body created to protect the interests of policyholders and to regulate the functioning of the insurance sector in India. The IRDAI also works to promote insurance and ensure orderly growth of the industry.
While it is true that IRDAI is the regulator of the insurance sector, it is important for you, as a policy holder, to know and understand the role, duties and the powers that IRDAI has over life insurance companies and other insurance providers in the country.
What does the IRDAI do?
The IRDAI was formed and is governed by Section 14 of the IRDAI Act, 1999. It states the duties, powers, and functions of the IRDAI, which broadly includes:
1. Registering, Regulating and Monitoring Insurance Companies:
The IRDAI regulates insurance companies, managing premium rates and terms of non-life insurance policies. The body is also responsible for setting up licensing norms and specifying financial reporting norms for insurance companies. Listed below are the functions and duties of the IRDAI regarding regulation of Insurance Companies:
2. Protecting the Interests of Policyholders:
The IRDAI has another equally important function to play, which is protecting your interests as a policyholder. The regulatory body monitors the investment of your funds by insurance companies. It also ensures that insurance companies maintain their solvency ratio so that the policy buyer’s interests are safeguarded.
How does the IRDAI help Policyholders?
IRDA passed a resolution in 2002, called IRDA (Protection of Policyholders’ Interest) Regulations, to lay down the rules to be followed by insurance companies and their intermediaries to ensure that the policyholder’s interests are protected throughout starting from the time of buying the policy to the time of settlement of claims.
In case of grievances, a policyholder must ideally try to redress it through the insurance company’s internal grievance handling department. But if you are dissatisfied, you can approach the IRDAI and it would help solve your disputes.
Moreover, to ensure complete customer safety, even licensing of agents is under the purview of IRDAI, It issues licenses to agents who clear an insurance exam prescribed by the firm. Another scheme created by the Government of India, called the Insurance Ombudsman, ensures efficient, impartial and cost-effective settlement of your grievances. There are 17 Ombudsman offices in India, covering different regions for taking complaints.
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