Objectives of IRDA Act, 1999

The association of insurance has had a long term impact on India’s history. This deep engrossing history finds its presence in several writings and inscriptions mentioned in Manusmriti, Arthashastra and Dharmashastra. These famous writings mainly aim at explaining how and why the distribution of utilities and resources is vital. They also contain strategies for explaining how the resources can be used in times of calamities and crises like drought, floods, epidemics, etc. With the increase in life insurance businesses in India from 1818 to the establishment of the Indian life assurance companies act of 1914, the increase in the condition of insurance businesses in India had already advanced. Although due to the presence of a large number of insurance companies and the growing influence of increasing investment in insurance-based businesses, there were also reports of an increase in unfair trade norms and practices. Hence, finally to legalise the general insurance business and with the proposals offered by the Malhotra committee brief,  the insurance regulatory and development authority act, of 1999 was formed by the Indian Government. Thus this intrigues one to know what the insurance regulatory and development authority act(IRDA), 1999 and the objectives of the IRDA Act, of 1999. The importance of insurance policies can also be better understood by knowing about the provisions of the IRDA Act, 1999.

What is the IRDA Act of 1999?

The insurance regulatory and development authority act(IRDA), 1999 was primarily passed by the Indian government to ensure the proper functioning and keep control of the insurance-based investments and agencies under legal order. It can be described as an act to supply the benchmark of a structure to preserve the benefits of keepers of insurance-based strategies. The objectives of the IRDA Act of 1999 primarily involved maintenance, promotion and providing orderly development of the insurance market, agency and corporations. The provisions of the IRDA Act, 1999 also focused on matters associated therewith or incidentally referred to and most importantly brought some fundamental changes to the Insurance policy act passed in 1938. The insurance regulatory and development authority act of 1999 fundamentally consists of six chapters with each chapter providing information about important data such as the transfer of resources and assets, duties and responsibilities, creation and association, etc. The objectives of the IRDA Act of 1999 are also well mentioned in its narrative along with the provisions of the IRDA Act of 1999 that helped determine norms and ordinances for legal growth and development of the insurance business.

Objectives of the IRDA Act, 1999

The insurance regulatory and development authority act of 1999 fundamentally focused on providing a safe and legally well-structured arena for insurance based operations keeping in mind the policyholders as well as the corporations that run the insurance strategies. The objective of the IRDA Act of 1999 was to enforce the legal ordinances provided by the Act in regular maintenance with the provisions of the IRDA Act 1999. Some of the major objectives of the IRDA Act of 1999 are:

• To protect the rights and provide fair insurance options to the policy bearer
• To maintain the insurance corporation rightfully and ensure the economical awareness of the policy management
• To continuously form norms to aim that the industry functions without any hindrance

Provisions of the IRDA Act of 1999

The insurance regulatory and development act of India of 1999 provides rigid and definite norms through its role in the insurance business and management. The criteria and aim of the fulfilment of the objectives of the IRDA Act of 1999 are specified and addressed through the provisions of the IRDA Act of 1999. The insurance regulatory and development act of India of 1999 clearly explains that keeping in check the insurance business policies and protecting the interests of the policy bearers is a vital part of the act. The insurance regulatory and development act of India of 1999 also clearly signifies ensuring the use of fair trade norms and insurance strategies. The most vital provisions of the IRDA Act of 1999 are:

• The IRDA authority must undergo the work needed to regulate policy norms
• It should also be able to enhance and maintain constant development of the insurance-based market and the reinsurance aimed at regulations along with proper monitoring

Conclusion

The article has attempted to provide a brief knowledge about the insurance regulatory and development act of India of 1999. The narrative also allows the user to briefly learn about the objectives of the IRDA Act of 1999. The article also provides a short narrative on the description of the provisions of the IRDA Act of 1999.