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Insurance Regulatory and Development Authority of India (IRDAI)

Insurance Regulatory and Development Authority of India (IRDAI) is a statutory body set up for protecting the interests of the policyholders and regulating, promoting and ensuring orderly growth of the insurance industry in India.

Insurers, reinsurers and insurance intermediaries in India are governed by the IRDAI. The primary legislation regulating the Indian insurance sector comprises the Insurance Act 1938 (the Insurance Act) and the Insurance Regulatory and Development Authority Act 1999 (the IRDA Act).

Pursuant to the powers granted to it under both of these statutes, the IRDAI has issued various regulations governing the licensing and functioning of insurers, reinsurers and insurance intermediaries.

Appeals against orders issued and decisions made by the IRDAI may be referred to the Securities Appellate Tribunal in accordance with the procedural rules notified in this regard.

Body structure

Section 4 of the IRDAI Act 1999 specifies the authority’s composition. The IRDA is a ten member body appointed by the Government of India consisting of:

  • Chairman
  • Five whole-time members
  • Four part-time members

Insurance Advisory Committee(IAC) – consists of not more than 25 members excluding ex-officio members to represent the interests of commerce, industry, transport, agriculture, consumers, surveyors, agents, intermediaries, organizations engaged in safety and loss prevention, research bodies and employees’ associations in the insurance sector.

As per Section 25 of the IRDA Act, 1999, the IAC advises the IRDA in framing of Regulations and other matters as may be prescribed.

Organizational Structure

Head Office, Hyderabad

Shri T.S. Vijayan, Chairman

Shri R.K. Nair, Member (Finance & Investment)

Shri M. Ramaprasad, Member (Non-Life)

Shri D.D. Singh, Member (Distribution)

Shri Sriram Taranikanti, Executive Director, Administration

Shri Lalit Kumar Chandel, Financial Advisor & Chief Vigilance Officer

Shri M Pulla Rao, Senior Joint Director, Administration, Accounts & HR

Shri Suresh Mathur, Senior Joint Director, Non-Life

Shri Randip Singh Jagpal, Senior Joint Director, Intermediaries

Shri A.R. Nithiayanantham, Senior Joint Director, Information Technology

Dr. Mamta Suri, Senior Joint Director, Inspection & Compliance

Smt. J Meena Kumari, Senior Joint Director, Actuarial

Shri S.N. Jayasimhan, Joint Director, Finance & Accounts (Non-Life)

Smt. Yegnapriya Bharath, Joint Director, Health

Shri H Ananthakrishnan, Joint Director, Legal & TAC

Shri V Jayanth Kumar, Joint Director, Life & Official Language

Shri Ramana Rao Addanki, Joint Director, Investment

Shri Sanjeev Kumar Jain, Joint Director, Non-Life

Shri T.S. Naik, Joint Director, Agency Distribution & Estate

Shri Mukesh Sharma, Joint Director, Administration & Inspection

Shri Rakesh Bajaj, Joint Director, Consumer Affairs & Surveyors

Regional Office, New Delhi

Supported by Deputy Directors, Senior Assistant directors, Assistant Directors, Junior Officers and Assistants.

Scope

The functions of the IRDAI are defined in Section 14 of the IRDAI Act, 1999, and include:

  • Issuing, renewing, modifying, withdrawing, suspending or cancelling registrations
  • Protecting policyholder interests
  • Specifying qualifications, the code of conduct and training for intermediaries and agents
  • Specifying the code of conduct for surveyors and loss assessors
  • Promoting efficiency in the conduct of insurance businesses
  • Promoting and regulating professional organisations connected with the insurance and re-insurance industry
  • Levying fees and other charges
  • Inspecting and investigating insurers, intermediaries and other relevant organisations
  • Regulating rates, advantages, terms and conditions which may be offered by insurers not covered by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938)
  • Specifying how books should be kept
  • Regulating company investment of funds
  • Regulating a margin of solvency
  • Adjudicating disputes between insurers and intermediaries or insurance intermediaries
  • Supervising the Tariff Advisory Committee
  • Specifying the percentage of premium income to finance schemes for promoting and regulating professional organisations
  • Specifying the percentage of life- and general-insurance business undertaken in the rural or social sector
  • Specifying the form and the manner in which books of accounts shall be maintained, and statement of accounts shall be rendered by insurers and other insurer intermediaries.

Jurisdiction

Section 1 clause 2 states that the application extends to the whole of India.

Insurance Ombudsman’s offices have been established in 17 cities all over India, each with its own jurisdiction. You have to approach the Ombudsman under whose jurisdiction the insurance company office against whom you are making a complaint falls.
Territorial Jurisdiction

The office of the Ombudsman shall be located at such place as may be specified by the Insurance Council from time to time.
The Ombudsman may hold sitting at various places within his area of jurisdiction in order to expedite disposal of complaints.

Landmark cases on dispute resolution by IRDA

KP Desai v United India Insurance Company, Maharashtra State Consumer Disputes Redressal Commission

When KP Desai underwent a laser eye surgery for correcting his eyesight, it cost him Rs 50,000. Desai had a health insurance policy with the United India Insurance Company since 1990, which he renewed every year.

After the surgery in 1997, when he filed a claim for the surgery expenses, the company rejected it stating that the surgery was purely cosmetic and not covered by the insurance.

Desai filed a complaint with the South Mumbai District Consumer Disputes Redressal forum in 1997 and the judgement ruled in his favour in April, 2004. The insurance company then filed an appeal with the Maharashtra State Consumer Disputes Redressal Commission, where the judgement was upheld.

New India Assurance v. Ashok Kumar, National Consumer Disputes Redressal Commission

Ashok Kumar purchased a second hand car in November, 2006, which was insured by New India Assurance by the previous owner. Kumar did not inform the insurance company about the registration transfer or get the insurance policy transferred to his name.

When Kumar filed a claim on the car being stolen in March, 2007, his claim was rejected on the grounds that the claim was not in his name.

Kumar filed a lawsuit and the Delhi District Commission and the State Commission ruled in his favour. New India Assurance filed an appeal with National Consumer Disputes Redressal Commission, which ruled in its favour stating the Irda regulation according to which the insurance company must be informed about the vehicle transfer within 14 days, if not, the insurance company is not liable to reimburse the claim.

Consumer Education & Research Society, Bileshwar Khand Udyog Sahakari vs. IFFCO-Tokio general insurance, National Consumer Disputes Redressal Commission

Ahmedabad-based Consumer Education & Research Society; Bileshwar Khand Udyog Sahakari paid a premium of Rs 38,520 for a Rs 2.25 lakh fire cover from IFFCO-Tokio General Insurance for a stock of molasses.

While the policy was still being validated, a portion of the stock was burnt due to spontaneous combustion. The insurance company rejected the claim on the grounds that the stock was not burnt by an actual fire.

The National Consumer Disputes Redressal Commission ruled in the favour of the insured, stating that this amounted to deficiency of service on the insurance company’s part and it was liable to pay damages amounting to Rs 1.14 lakh along with 10 per cent interest per year from 2003 onwards.