The insurance business is deep rooted in India. It was started in 1818 with establishment of Oriental Insurance Company in Calcutta. To promote transparency, regulation and orderly conduct of insurance business in the country, the Insurance Regulatory and Development Authority of India (IRDAI was established as statutory body in year 2000 under the IRDAI Act’ 1999. It came into existence after the recommendation of Malhotra Committee report. The functions of IRDA include regulation, development and research related to insurance industry.
Board of IRDAI
The board of IRDAI consists of ten members, all of which are appointed by Government of India:
- Five whole-time members
- Four part-time members
Functions of IRDA
The functions of IRDA includes:
- 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 growth of the economy;
- To set, promote, monitor and enforce 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.
- To register the companies who runs the insurance business
The insurance ombudsman was created by Government of India in 1998 with the purpose of quick disposal of the grievances of the insured customers and to mitigate their problems involved in redressal of those grievances.
- An insurance Ombudsman is appointed for a term of three years or till the incumbent attains the age of sixty five years, whichever is earlier
- The ombudsman shall pass an award within a period of three months from the receipt of the complaint. The awards are binding upon the insurance companies.
- If the customer is not satisfied with the award of the Ombudsman, he can approach other venues like Consumer Forums and Courts of law for redressal of his grievances.
- At present there are 17 insurance ombudsmen across the country.
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