TMI BlogTHE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIAX X X X Extracts X X X X X X X X Extracts X X X X ..... THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY OF INDIA - By: - Mr. M. GOVINDARAJAN - Other Topics - Dated:- 12-11-2018 - - Act The Central Government enacted the Insurance Regulatory and Development Authority of India Act, 1999 ( Act for short) t o provide for the establishment of an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto. The Act is applicable to the whole of India. Establishment of Authority Section 3 of the Act gives powers to the Central Government to constitute the Authority for insurance which may be called as The Insurance Regulatory and Development ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority of India (IRDAI for short). The Authority shall be a body corporate by the name aforesaid having perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold and dispose of property, both movable and immovable, and to contract and shall, by the said name, sue or be sued. The head office is situated at Hyderabad and the branches are located in Delhi and Mumbai. Composition of the IRDAI Section 4 of the Act provides that the Authority shall consist of the following members- a Chairperson; not more than five whole time members; not more than four part time members to be appointed by the Central Government. The Authority now has five whole time members and fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur part time members. The Chairperson shall have the powers of general superintendence and direction in respect of all administrative matters of the Authority. Appointment of Members The Members of the IRDAI are to be appointed by the Central Government from amongst persons of ability, integrity and standing who have knowledge or experience in life insurance, general insurance, actuarial science, finance, economics, law, accountancy, administration or any other discipline which would, in the opinion of the Central Government, be useful to the IRDAI. The Central Government shall, while appointing the Chairperson and the whole-time members, ensure that at least one person each is a person having knowledge or experience in life ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urance, general insurance or actuarial science, respectively. Tenure of Members The Chairperson and every other whole-time member shall hold office for a term of five years from the date on which he enters upon his office and shall be eligible for reappointment. No person shall hold office as a Chairperson after he has attained the age of sixty-five years. No person shall hold office as a whole-time member after he has attained the age of sixty-two years. A part-time member shall hold office for a term not exceeding five years from the date on which he enters upon his office. Removal of Members A Member may relinquish his office by giving in writing to the Central Government notice of not less than three months. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Government may remove from office any member who- (a) is, or at any time has been, adjudged as an insolvent; or (b) has become physically or mentally incapable of acting as a member; or (c) has been convicted of any offence which, in the opinion of the Central Government, involves moral turpitude; or (d) has acquired such financial or other interest as is likely to affect prejudicially his functions as a member; or (e) has so abused his position as to render his continuation in office detrimental to the public interest. No such member shall be removed under clause (d) or clause (e) unless he has been given a reasonable opportunity of being heard in the matter. Restrictions on Members The Chairperson and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whole-time members shall not, for a period of two years from the date on which they cease to hold office as such, except with the previous approval of the Central Government, accept- any employment either under the Central Government or under any State Government; or any appointment in any company in the insurance sector. Mission of the IRDAI The mission of IRDA is as detailed below- to protect the interest of and secure fair treatment to policyholders; to bring about speedy and orderly growth of the insurance industry (including annuity and superannuation payments) for the benefit of the common man and to provide long term funds for accelerating the growth of the economy; to set, promote, monitor and enforce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... high standards of integrity, financial soundness, fair dealing and competence of those it regulates; to ensure speedy settlement of genuine claims, to prevent insurance frauds and other malpractices and put in place effective grievance redressal machinery; to promote fairness, transparency and orderly conduct in financial markets dealing with insurance and build a reliable management information system to enforce high standards of financial soundness amongst market players; to take action where such standards are inadequate or ineffectively enforced; to bring about optimum amount of self-regulation in day-to-day working of the industry consistent with the requirements of prudential regulation. Duties, functions and powers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of IRDAI Section 14 prescribes the following duties, functions and powers of IRDAI- 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, insurable interest, 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; promoting efficiency in the conduct of insurance business; promoting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and regulating professional organisations 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 organisations connected with the insurance business; control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938); specifying the form and manner in which books of account shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries; regulating investment of funds by insurance companies; regulating maintenance of margin of solvency adjudication of disputes between insurers and intermediaries or insurance intermediaries; supervising the functioning of the Tariff Advisory Committee; specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organizations; specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector; and exercising such other powers as may be prescribed. The IRDAI may constitute Insuran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Advisory Council. The IRDAI is given power to make regulations consistent with the Acts and Rules to carry out the purposes of the Act. The IRDAI may, by a general or special order in writing, also form committees of the members and delegate to them the powers and functions of the Authority as may be specified by the regulations. Meetings of the Authority The Authority shall meet at such times and places and shall observe such rules and procedures in regard to transaction of business at its meetings (including quorum at such meetings) as may be determined by the regulations. The Chairperson, or if for any reason he is unable to attend a meeting of the Authority, any other member chosen by the members present from amongst them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... selves at the meeting shall preside at the meeting. All questions which come up before any meeting of the Authority shall be decided by a majority of votes by the members present and voting, and in the event of an equality of votes, the Chairperson, or in his absence, the person presiding shall have a second or casting vote. The Authority may make regulations for the transaction of business at its meetings. No act or proceeding of the Authority shall be invalid merely by reason of any vacancy in, or any defect in the constitution of, the Authority; or any defect in the appointment of a person acting as a member of the Authority; or any irregularity in the procedure of the Authority not affecting the merits of the case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fund A fund called as the Insurance Regulatory and Development Authority of India Fund has been created. In this Fund the following amounts are credited- all Government grants, fees and charges received by the IRDAI; all sums received by the Authority from such other source as may be decided upon by the Central Government; the percentage of prescribed premium income received from the insurer. The said Fund may be utilized for- the salaries, allowances and other remuneration of the members, officers and other employees of the Authority; the other expenses of the Authority in connection with the discharge of its functions and for the purposes of this Act. Accounts and Audit The IRDAI shall ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intain proper accounts and other relevant records and prepare an annual statement of accounts in such form as may be prescribed by the Central Government in consultation with the Comptroller and Auditor-General of India. The accounts of the IRDAI shall be audited by the Comptroller and Auditor-General of India at such intervals as may be specified by him and any expenditure incurred in connection with such audit shall be payable by the IRDAI to the Comptroller and Auditor-General. The Comptroller and Auditor-General of India and any other person appointed by him in connection with the audit of the accounts of the IRDAI shall have the same rights, privileges and IRDAI in connection with such audit as the Comptroller and Auditor-General gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erally has in connection with the audit of the Government accounts and, in particular, shall have the right to demand the production of books of account, connected vouchers and other documents and papers and to inspect any of the offices of the IRDAI. The accounts of the IRDAI as certified by the Comptroller and Auditor-General of India or any other person appointed by him in this behalf together with the audit-report thereon shall be forwarded annually to the Central Government and that Government shall cause the same to be laid before each House of Parliament. Returns The IRDAI shall furnish to the Central Government at such time and in such form and manner as may be prescribed, or as the Central Government may direct to furnis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h such returns, statements and other particulars in regard to any proposed or existing programme for the promotion and development of the insurance industry as the Central Government may, from time to time, require. The IRDAI shall, within nine months after the close of each financial year, submit to the Central Government a report giving a true and full account of its activities including the activities for promotion and development of the insurance business during the previous financial year. Copies of the reports received shall be laid , as soon as may be after they are received, before each House of Parliament Powers of Central Government The IRDAI shall, in exercise of its powers or the performance of its functions under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Act, be bound by such directions on questions of policy, other than those relating to technical and administrative matters, as the Central Government may give in writing to it from time to time. The IRDAI shall, as far as practicable, be given an opportunity to express its views before any direction is given. The decision of the Central Government, whether a question is one of policy or not, shall be final. The Central Government may, be notification and for reasons to be specified therein, supersede the IRDAI for such period, not exceeding six months, as may be specified in the notification and appoint a person to be the Controller of Insurance if not already done. The Central Government shall give a reasonable opportunity to IR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DAI before passing such order. The Central Government may, by notification, make rules for carrying out the provisions of this Act. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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