We regulate the Indian insurance industry to protect the interests of the policyholders and work for the orderly growth of the industry.
Background
- 1991: Government of India begins the economic reforms programme and financial sector reforms
- 1993: Committee on Reforms in the Insurance Sector, headed by Mr. R. N. Malhotra, (Retired Governor, Reserve Bank of India) set up to recommend reforms.
- 1994: The Malhotra Committee recommends certain reforms having studied the sector and hearing out the stakeholders
- Some recommended reforms
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Private sector companies should be allowed to promote insurance companies
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Foreign promoters should also be allowed
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Government to vest its regulatory powers on an independent regulatory body answerable to Parliament
Birth of IRDAI
- Insurance Regulatory and Development Authority (IRDA) set up as autonomous body under the IRDA Act, 1999
- IRDAI’s Mission: To protect the interests of policyholders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto.
IRDAI’s Activities
- Frames regulations for insurance industry in terms of Section 114A of the Insurance Act 1938
- From the year 2000 has registered new insurance companies in accordance with regulations
- Monitors insurance sector activities for healthy development of the industry and protection of policyholders’ interests