The Insurance Regulatory and Development Authority (IRDAI) - Roles & Functions

The Insurance Regulatory and Development Authority or IRDAI is an agency of the Government of India, formed to supervise the country’s insurance sector. The core mission of IRDAI is to protect the interest of policyholders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith. It was established in 1999 as an autonomous body to specifically regulate and develop the insurance industry in India. In April 2000, the IRDAI was incorporated as a statutory body with the key objective to promote competition and enhance customer satisfaction while ensuring financial security of the insurance market. IRDAI opened up the insurance market in August 2000 with the invitation for application for registrations. Foreign companies were allowed ownership of up to 26 per cent. True to its title, the IRDAI has the power to frame regulations under Section 114A of the Insurance Act, 1938 and has from 2000 onwards framed various regulations for insurance business to protect policyholders’ interests.

Role of IRDAI

There are number of roles and duties that are assigned to IRDAI to ensure awareness among policyholders and the service providers.

  • IRDAI issues a certificate of registration, renewal, modification, withdrawal, suspension or cancellation to an applicant

  • It protects the interest of the policyholder on the terms and conditions of contracts of insurance

  • IRDAI specifies the code of conduct and practical training for insurance intermediaries and agents

  • Promotes efficiency and regulates professional organisations connected with the insurance business, investment of funds by insurance companies

  • IRDAI specifies the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector

The authority comprises a ten-member team — a chairman, five fulltime members and four part-time members, all appointed by the Government of India.

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