Role of the Insurance Regulatory and Development Authority

The Indian economy is growing day by day, that is why there is a need for a regulatory body that helps properly in looking after these big institutes whether they are following the guidelines or not the IRDA of India does the same job. Follow the article to get more information related to the specific topic.

The IRDA Overview

IRDA is the “Insurance Regulatory and Development Authority” of India. It is mainly a regulatory body that comes under the jurisdiction of the Ministry of Finance in the Indian government. This was started under the Insurance Regulatory and Development Authority Act in the year 1999 this act was passed by the Parliament, Government of India.

It is a 10-member body of the IRDA including the chairman of the authority, five full-time, and four part-time members who are appointed by the Indian government. The IRDA headquarters is in Hyderabad, Telangana; earlier it was situated in New Delhi in the year 2001.

India is a very large economy which is why there is a need for a body that helps in the regulation of the insurance system that is where the IRDA comes into action. The very first insurance started in the country was situated in Calcutta which was started during the 1850s, as the market grew new companies started to come and give great competition to other companies, that is why there was a need for a regulatory body so that these companies do not take advantage of the people who are not aware of different rules that should be followed.

Role of the IRDA

Several insurance companies have denied the coverage of the policy holders, the regulation of the market, and the minimization of different sorts of partial acts that were done after the establishment of IRDA.

Just like the others banking systems in our country are regulated as per the guidelines given by the RBI. These guidelines restrict the bankers from not behaving with the account holders in an unruly way. The banks cannot implement their own rules for the customers. For instance, the loans that the institutes offer should be based on the pre-defined rates of interest set by the RBI (Reserve Bank of India). 

It is an autonomous body that has the only mission to maintain fair practices in the field of insurance so that the customers can be aware and escape heavy losses of their money. This industry is growing day by day in millions and by the year 2020 it will reach about $280 billion, and it is possible that this growth is not stopping here at all. The major role that helps to keep up with the growth in this industry has been given below:

• The IRDA plays a very crucial role in the insurance industry practices as it ensures and also encourages the growth of insurance industries so that the people who are spending their hard-earned money on these policies can benefit and can be sure that they have invested in a fair policy.
• They also help in protecting the major interests of the policyholders, so that the system can be easily trusted.
• They have to also help in resolving disputes of all types and also in speeding up the claims.
• One of the major roles is the promotion of high standards of integrity and the fair dealing of the policies in the markets.
• The role of the IRDA is also to set standards, also to keep a check on frauds and scams, so that the major losses can be easily prevented.

Conclusion

As has been mentioned above in the article, as the country’s economy is growing day by day the need for a fair body that helps in the proper regulation of the institutions is also increasing simultaneously, which is where the IRDA of India comes into action. This article distinctively talked about the role of the insurance regulatory and development authority.