The Insurance
Regulatory And development
authority Bill was approved by the Lok Sabha
on December 1,1999, and
after approval of the Rajya Sabha was enacted as a the Insurance
Regulatory And development
authority (IRDA), act, 1999. The IRDA Act 1999, was gazetted on April
19, 2000, .As per the first Schedule
of the IRDA Act, 1999, certain amendments were made to the Insurance Act,
1938, the Life Insurance
Corporation Act, 1956, and the general Insurance Business nationalization Act, 1972, to pave the way for liberalizations of the Insurance sector. The preamble of the IRDA act calls it. An Act to provide for the establishment of an authority to protect the interest of holders of Insurance policies
to regular promote and
ensure orderly growth of the
industry and for matters
connected there with or a incident thereto....
In terms of the IRDA act and
amendments to the Insurance Act, the office of the Controller of Insurance
has become redundant under normal circumstances, . However the
Central Government retains its powers to appoint a person to be the Controller of Insurance
in certain specific situations. The authority is a body corporate having
perpetual succession and common
seal. It consists of a
Chairperson and other members not exceeding to the nine in number of whom
not more than five would serve full time
and not more than four would serve time part time, to be appointed by the Central
Government from amongst persons of
ability , integrity and standing who
have the knowledge or experience of life insurance, general
Insurance actuarial science , finance economic law, accountancy, administration or any other discipline which in the opinion of the central government shall be useful of the
Authority . As per the Act, the
Chairperson would hold office for a term of 5 year or until the age
of 65 years. The whole time members would hold office for a term of 5 years, or until the age of 62 years. A part time member would not office
for a term not exceeding 5 years.
The duties of the IRDA have been spelt out in the Act as to
regulate promote and ensure orderly growth of the Insurance business and reinsurance business. The powers and functions
of the IRDA have been listed out as follows. 1.
Issue to the applicant a certification
of registration , renew, modify,
withdrawn, suspend , or cancel such
registration. 2. Protection of the interests of the policy holder in matters concerning
assigning of policy, nomination
by policy holder insurable
interest settlement of
Insurance claim, surrender value
of the policy and other terms and a
conditions of contract of
Insurance . 3. Specifying the requisite
qualifications code of the
conduct and practical training
for intermediary or
Insurance intermediaries and agents.
4. Specifying the code of
conduct for surveyors and the loss assessors. 5.
Promoting efficiency in the conduct of Insurance business. 6.
Promoting and regulations
professionals organizations connected with the insurance with and
reinsurance business. 7. Levying
fees and other charges or carrying
out the purpose of the IRDS Act,:
8. Calling for information from,
undertaking inspection and conducting enquiries intermediaries and other organizations connected
with the insurance business. 9. Control and regulations of the rates,
advantage terms and condition
that may be offered by insurance
in respect of general insurance business not so controlled and regulated by TAC under section 64U of the insurance Act 1938:
10. Specifying the form and
manner in th which books and of
account will be maintained and statement
of the accounts will be rendered by the insurers and insurance
intermediaries.
SNAP-SHOTS OF THE ECONOMY. A student of insurance
should have an overview of the external environment in which the insurers are functioning at present at and are expected to function
in the future. The trends called
out the from contemporary literature give a
rough indication of the extent to
which is the insurers need to prepare
themselves to face the challenges. Economics
liberalizations has caused cascading
effects on various aspects of the Indian economy. The country’s transformation from a
conventional agricultural economics
to an industrialized economy has
raised a volley of new a challenges
to the nation’s
infrastructure especially on the
service sector. India has crossed new milestones in the diverse areas such as a
exploration of the oils in the high seas, launching of artificial satellites
creations of state of the art
power plants and refineries acquiring
of business process from
different countries and higher inflow of the foreign direct
investment. All these have
been created by the a bigger market for
the support systems including insurance.
Growth potential in insurance sector is the a well-researched phenomenon any where in the world. It depends on several macro economic parameters. Collectively exhausting but not mutually exclusive parameters of insurance growth are gross direct premium (GDP), level and a growth rate, agriculture production and productive energy generations and incremental consumption infrastructure level and strategy of the further, implementation corporate sector and the industry inflation targeting and containment capital market volume and returns money and the banking growth rate projections of the economy and business confidence level to determine the spirit of times. Changes in the consumers demographics, largely determine reorientation of insurance business. The insurance sector has been has to translate demographic realities into the opportunities for growth . The country’s progress in terms of financial knowledge, rapid technologies innovation communication , and internet technologies evolving business environment and the globalizations, liberalizations, conglomerations, more distribution channels, and the increasing educations are clear drivers and the of change that the insurance sector can tap for is growth. As per the Swiss investment bank, Credit Suisse India’s Gross Domestic Product (GDP), at around Rs. 41,00,000 crore, has been it is a crossed the trillion dollar mark for the first time in History in April 1007, when the rupee appreciated to below 41 level against the US dollar. India has thus joined the elite club of the 12 countries with a trillion dollar economy. The annual growth rate in 2007 is over 9 per cent and over a period f time hovering around 8 to 9 per cent. During the first three quarters of 2006-2007, the six, core infrastructure industries. Viz., Crude petroleum, refinery, electricity , finished steel, cement and coal grew approximately at 8.3 per cent as compared to 5.5 per cent in the previous year. The index of industrial production showed a rise of the 10.6, per cent as a against the 8.3 per cent of the previous fiscal, The three categories of industry manufacturing , mining and electricity , also fuelled the growth of the economy. The automobile, industry registered a total production of 8.2 million vehicle in the same period with a growth a percentage of a 15.91, per cent.
Growth potential in insurance sector is the a well-researched phenomenon any where in the world. It depends on several macro economic parameters. Collectively exhausting but not mutually exclusive parameters of insurance growth are gross direct premium (GDP), level and a growth rate, agriculture production and productive energy generations and incremental consumption infrastructure level and strategy of the further, implementation corporate sector and the industry inflation targeting and containment capital market volume and returns money and the banking growth rate projections of the economy and business confidence level to determine the spirit of times. Changes in the consumers demographics, largely determine reorientation of insurance business. The insurance sector has been has to translate demographic realities into the opportunities for growth . The country’s progress in terms of financial knowledge, rapid technologies innovation communication , and internet technologies evolving business environment and the globalizations, liberalizations, conglomerations, more distribution channels, and the increasing educations are clear drivers and the of change that the insurance sector can tap for is growth. As per the Swiss investment bank, Credit Suisse India’s Gross Domestic Product (GDP), at around Rs. 41,00,000 crore, has been it is a crossed the trillion dollar mark for the first time in History in April 1007, when the rupee appreciated to below 41 level against the US dollar. India has thus joined the elite club of the 12 countries with a trillion dollar economy. The annual growth rate in 2007 is over 9 per cent and over a period f time hovering around 8 to 9 per cent. During the first three quarters of 2006-2007, the six, core infrastructure industries. Viz., Crude petroleum, refinery, electricity , finished steel, cement and coal grew approximately at 8.3 per cent as compared to 5.5 per cent in the previous year. The index of industrial production showed a rise of the 10.6, per cent as a against the 8.3 per cent of the previous fiscal, The three categories of industry manufacturing , mining and electricity , also fuelled the growth of the economy. The automobile, industry registered a total production of 8.2 million vehicle in the same period with a growth a percentage of a 15.91, per cent.
The number
of the passenger cars crew by 20.76 per
cent, two wheelers, by 13.45 per cent, three-wheelers, grew by the 20.76, per
cent two-wheeler grew by 13.45 per cent,
. Automobiles exports registered a growth of 28.74, per cent over the previous
year. Till December 2006, India was a
had a total telephone subscription
of nearly 190 millions phones.
The responsibility of providing insurance coverage for there these landmark
achievement of the nation’s
progress is vested with Indian
insurance companies who have an
a to assess and accept to the risk for insurance and reinsure the portion of the risk
that is beyond their in the retention capacity in the international market. Growth in various sectors
cells for corresponding regulatory
changes as well. In a acknowledgments
of the scope of regulatory overlaps
and realizing the increasing need for the regulatory convergence a
High level Co-ordination, Committee on a Capital or Financial Markets,
comprising the heads the of the regulatory institutions meet periodically to ensure a
certain degree of effectiveness
of supervision , consistency in
regulation and harmonization of the
supervisory practice between the banking, securities and insurance supervisors