Introduction Irda

7/29/2019 Introduction Irda

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INTRODUCTION

In order to provide better insurance coverage to citizens and also to

augment the flow of long-term resources for financing infrastructure, the

Government of India opened the insurance sector to foreign and Indian

companies. Insurance Regulatory and Development Authority Act, 1999 was

passed. A statutory body is set up to monitor the working of insurance

companies. The Act contains 32 sections and three schedules. The schedules

contain amendments made in Insurance Act, 1938, Life Insurance

Corporation Act, 1956 and General Insurance Business (Nationalization)

Act, 1972.

The Insurance Regulatory and Development Authority is a body

corporate by the name having perpetual succession and a common seal with

power, subject to the provisions of the Act, to acquire, hold and dispose of

property, both movable and immovable, and to contract and shall, by the

said name, sue or be sued.

The Insurance Regulatory and Development Authority (IRDA) is a

national agency of the Government of India based in Hydrabad. It was

formed by an act of Indian Parliament known as IRDA Act 1999, which was

amended in 2002 to incorporate some emerging requirements. Mission of

IRDA as stated in the act is "to protect the interests of the policyholders, to

regulate, promote and ensure orderly growth of the insurance industry andfor matters connected therewith or incidental thereto."

Insurance Regulatory & Development Authority 1

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The IRDA Act, 1999

The IRDA Act was passed in 1999, providing for the establishment of

the IRDA as a ten member body, with the Chairperson, and nine other

members, of whom not more than five will be whole time members. The

IRDA is the Authority to regulate the insurance industry in India and has the

powers to issue registration certificates and licences, lay down codes of

conduct and monitor the performance of insurers and other persons referred

to in the Insurance Act and to make regulations to carry out its purposes.

The IRDA is to be advised by the Insurance Advisory Committee, toconsist of not more than 25 members. This Committee is to be appointed by

the IRDA and will represent the interests of commerce, industry, transport,

agriculture, consumer for a, surveyors, agents, intermediaries, organizations

engaged in safety and loss prevention, research bodies and employees

associations in the insurance sector.

The IRDA Act, also amended the Insurance Act, 1938, the Life

Insurance Corporation Act, 1956 and the General Insurance Business

(Nationalisation) Act, 1972. These amendments were made to give effect to

the new policy of allowing private insurance companies to transact business

in India.


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COMPOSITION OF AUTHORITY

As per the section 4 of IRDA Act' 1999, Insurance Regulatory and

Development Authority (IRDA, which was constituted by an act of

parliament) specify the composition of Authority

The Authority is a ten member team consisting of:

(a) a Chairman;

(b) not more than five whole-time members;

(c) not more than four part-time members,

Tenure of Office of Chairperson and Other Members

The Chairperson and every other whole-time member shall hold office

for a term of five years from the date on which he enters upon his office and

shall be eligible for reappointment:

Provided that no person shall hold office as a Chairperson after he has

attained the age of sixty-five years.

Provided further that no person shall hold office as a whole-time

member after he has attained the age of sixty-two years.

As part-time member shall hold office for a term not exceeding five years

from the date on which he enters upon his office.

Removal from Office

1. The Central Government may remove from office any member who-


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Is, or at any time has been, adjudged as an insolven; or

Has become physically or mentally incapable of acting as a

member; or

Has been convicted of any offence which, in the opinion of the

Central Government, involves moral turpitude; or

Has acquired such financial or other interest as is likely to affect

prejudicially his functions as a member; or

Has so abused his position as to render his continuation in office

detrimental to the public interest.

2. No such member shall be removed under clause (d) or clause (e) of sub-

section (1) unless he has been given a reasonable opportunity of being heard

in the matter.

Salary and Allowances of Chairperson and Members

1. The salary and allowances payable to, and other terms and conditions of

service of, the members other than part-time members shall be such as may

be prescribed.

2. The part-time members shall receive such allowances as may be

prescribed.

3. The salary,allowances and other conditions of service of a member shall

not be varied to his disadvantage after appointment.


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Bar on Future Employment of Members

The Chairperson and the whole-time members shall not, for a period

of two years from the date on which they cease to hold office as such, except

with the previous approval of the central Government, accep-

any employment either under the Central Government or under any

State Government; or

any appointment in any company in the insurance sector.

Administrative Powers of Chairperson

The Chairperson shall have the powers of general superintendence

and direction in respect of all administrative matters of the Authority.

Meeting of Authority

The Authority shall meet at such times and places, and shall observe

such rules and procedures in regard to transaction of business at its meetings

(including quorum at such meetings) as may be determined by regulations.

The Chairperson, or, if for any reason he is unable to attend a meeting

of the Authority, any other member chosen by the members present from

amongst themselves at the meeting, shall preside at the meeting.

All questions which come up before any meeting of the Authority

shall be decided by a majority of votes by the members present and voting,


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and in the event of an equality of votes, the Chairperson, or in his absence,

the person presiding shall have a second or casting vote.

The Authority may make regulations for the transaction of business at

its meetings.

Officers and Employees of Authority

The Authority may appoint officers and such other employees as it

considers necessary for the efficient discharge of its functions under this

Act.

The terms and other conditions of service of officers and other

employees of the Authority appointed shall be governed by regulations made

under this Act.


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EXPECTATIONS/OBJECTIVES

The law of India has following expectations from IRDA:

1. To protect the interest of and secure fair treatment to policyholders;

2. 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;

3. To set, promote, monitor and enforce high standards of integrity, financial

soundness, fair dealing and competence of those it regulates;

4. To ensure that insurance customers receive precise, clear and correct

information about products and services and make them aware of their

responsibilities and duties in this regard;

5. To ensure speedy settlement of genuine claims, to prevent insurance

frauds and other malpractices and put in place effective grievance redressal

machinery;

6. To promote fairness, transparency and orderly conduct in financial

markets dealing with insurance and build a reliable management information


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system to enforce high standards of financial soundness amongst market

players;

7. To take action where such standards are inadequate or ineffectively

enforced;

8. To bring about optimum amount of self-regulation in day to day working

of the industry consistent with the requirements of prudential regulation.

DUTIES, POWERS & FUNCTIONS OF IRDA

Section 14 of IRDA Act, 1999 lays down the duties, powers and

functions of IRDA as follows:

(1) Subject to the provisions of this Act and any other law for the time being

in force, the Authority shall have the duty to regulate, promote and ensure

orderly growth of the insurance business and re-insurance business.

(2) Without prejudice to the generality of the provisions contained in sub-

section (1), the powers and functions of the Authority shall include,

(a) issue to the applicant a certificate of registration, renew, modify,

withdraw, suspend or cancel such registration;

(b) protection of the interests of the policy holders in matters concerning

assigning of policy, nomination by policy holders, insurable interest,

settlement of insurance claim, surrender value of policy and other terms and

conditions of contracts of insurance;


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(c) specifying requisite qualifications, code of conduct and practical training

for intermediary or insurance intermediaries and agents;

(d) specifying the code of conduct for surveyors and loss assessors;

(e) promoting efficiency in the conduct of insurance business;

(f) promoting and regulating professional organisations connected with the

insurance and re-insurance business;

(g) levying fees and other charges for carrying out the purposes of this Act;

(h) calling for information from, undertaking inspection of, conducting

enquiries and investigations including audit of the insurers, intermediaries,

insurance intermediaries and other organisations connected with the

insurance business;

(i) control and regulation of the rates, advantages, terms and conditions that

may be offered by insurers in respect of general insurance business not socontrolled and regulated by the Tariff Advisory Committee under section

64U of the Insurance Act, 1938 (4 of 1938);

(j) specifying the form and manner in which books of account shall be

maintained and statement of accounts shall be rendered by insurers and other

insurance intermediaries;

(k) regulating investment of funds by insurance companies;

(l) regulating maintenance of margin of solvency;


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(m) adjudication of disputes between insurers and intermediaries or

insurance intermediaries;

(n) supervising the functioning of the Tariff Advisory Committee;

(o) specifying the percentage of premium income of the insurer to finance

schemes for promoting and regulating professional organisations referred to

in clause (f);

(p) specifying the percentage of life insurance business and general

insurance business to be undertaken by the insurer in the rural or social

sector; and

(q) exercising such other powers as may be prescribed.


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INSURANCE BUSINESS OVERVIEW

Insurance business is divided into four classes :

1) Life Insurance

2) Fire Insurance

3) Marine Insurance and

4) Miscellaneous Insurance.

Life Insurers transact life insurance business; General Insurers transact the

rest.

INSURANCE PRODUCTS

Life Insurance:

Popular Products: Endowment Assurance (Participating), and Money Back

(Participating). More than 80% of the life insurance business is from these

products.

General Insurance:

Fire and Miscellaneous insurance businesses are predominant. Motor

Vehicle insurance is compulsory.


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Tariff Advisory Committee (TAC) lays down tariff rates for some of the

general insurance products (please visit website of GIC for details )

Indian Insurance Industry

INSURERS

Insurance industry, as on 1.4.2000, comprised mainly two players: the state

insurers:

Life Insurers:

Life Insurance Corporation of India (LIC)

General Insurers:

General Insurance Corporation of India (GIC) (with effect from

Dec'2000, a National Reinsurer)

GIC had four subsidiary companies, namely (with effect from Dec'2000,

these subsidiaries have been de-linked from the parent company and made as

independent insurance companies.

The Oriental Insurance Company Limited

The New India Assurance Company Limited National Insurance Company Limited

United India Insurance Company Limited.


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REGULATIONS OF IRDA

There are around 37 regulations issued by IRDA. From these regulations

following are some important regulations of IRDA which are explained in

detailed.

1. Obligations of Insurers to Rural or Social Sectors Regulations, 2008.

(Fourth Amendment)

2. Life Insurance Reinsurance Regulation, 2000.

3. General Insurance Reinsurance Regulation, 2000.

4. Protection of Policy Holders Interest, 2002 (Amendment)

5. Licensing of Insurance Agent Regulation, 2000.

6. Licensing of Corporate Agent Regulation, 2002.

7. Meetings Regulation, 2000.

8. Registration of Indian Insurance Companies Regulations, 2003.

(Amendment)

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY,

(Obligations of Insurers to Rural or Social Sectors) (Fourth Amendment)

Regulations,2008


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F.No.IRDA/Reg./2/43/2008-

In exercise of the powers conferred by section 32C read with section

32B of the Insurance Act, 1938, (4 of 1938), the Authority, in consultation

with the Insurance Advisory Committee, hereby makes the following

regulations

1. Short title and commencement:

(1) These regulations may be called the Insurance Regulatory and

Development Authority (Obligations of Insurers to Rural or Social

Sectors) Regulations, 2008.

(2) They shall come into force from the date of their publication in

the Official Gazette.

(3) In the Insurance Regulatory and Development Authority

(Obligations of Insurers to Rural or Social Sectors) Regulations, 2002,

The first provison to Regulation 3 shall e deleted and replaced

to read as under:

Provided that in cases where an insurance company commences

operations in the second half of the financial year and is in operations

for less than six months as at 31 st March of the relevant financial year,

(i) no rural or social sector obligations shall be applicable for the said

period, and (ii) the annual obligations as indicated in the Regulations

shall be reckoned from the next financial year which shall be

considered as the first year of operations for the purpose of

compliances. In cases where an insurance company commences


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operations in the first half of the financial year, the applicable

obligations for the first year shall be 50 per cent of the obligations as

specified in these Regulations.

2. Definitions:

In these regulations, unless the context otherwise requires -

a. Act means the Insurance Act, 1938 (4 of 1938);

b. Authority means the Insurance Regulatory and Development

Authority established under the provisions of section 3 of the

Insurance Regulatory and Development Authority Act, 1999 (41 of

1999);

c. Rural sector shall mean any place as per the latest census which has,

i. a population of not more than five thousand;

ii. a density of population of not more than four hundred per square

kilometre; and

iii. At least seventy five per cent of the male working population is

engaged in agriculture.

d. Social sector includes unorganised sector, informal sector,

economically vulnerable or backward classes and other categories of

persons, both in rural and urban areas;

e. Unorganised sector includes self-employed workers such as

agricultural labourers, bidi workers, brick kiln workers, carpenters,

cobblers, construction workers, fishermen, hamals, handicraft artisans,

handloom and khadi workers, lady tailors, leather and tannery


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workers, papad makers, powerloom workers, physically handicapped

self-employed persons, primary milk producers, rickshaw pullers,

safai karmacharis, salt growers, seri culture workers, sugarcane

cutters, tendu leaf collectors, toddy tappers, vegetable vendors,

washerwomen, working women in hills, or such other categories of

persons.,

f. economically vulnerable or backward classes means persons who

live below the poverty line;

g. other categories of persons includes persons with disability as

defined in the Persons with Disabilities (Equal Opportunities,

Protection of Rights, and Full Participation) Act, 1995 and who may

not be gainfully employed; and also includes guardians who need

insurance to protect spastic persons or persons with disability;

h. All words and expressions used herein and not defined herein but

defined in the Insurance Act, 1938 (4 of 1938), or in the Insurance

Regulatory and Development Authority Act, 1999 (41 of 1999), shall

have the meanings respectively assigned to them in those Acts.

3. Obligations:

Every insurer, who begins to carry on insurance business after the

commencement of the Insurance Regulatory and Development Authority

Act, 1999 (41 of 1999), shall, for the purposes of sections 32B and 32C of

the Act, ensure that he undertakes the following obligations, during the first

five financial years, pertaining to the persons in

(a) Rural sector,


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(i) In respect of a life insurer,

Ten per cent in the first financial year;

Seven per cent in the second financial year;

Ten per cent in the third financial year;

Twelve per cent in the fourth financial year;

Fifteen per cent in the fifth year, of total policies written direct in that

year;

(ii) In respect of a general insurer,

Two per cent in the first financial year;

Three per cent in the second financial year;

Five per cent thereafter, of total gross premium income written direct

in that year.

(b)Social sector, in respect of all insurers,

Five thousand lives in the first financial year;

Seven thousand five hundred lives in the second financial year;

Ten thousand lives in the third financial year;

Fifteen thousand lives in the fourth financial year;

Twenty thousand lives in the fifth year;

Provided that in the first financial year, where the period of operation is less

than twelve months, proportionate percentage or number of lives, as the case

may be, shall be undertaken.

Provided further that, in case of a general insurer, the obligations specified

shall include insurance for crops.


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Provided further that the Authority may normally, once in every five years,

prescribe or revise the obligations as specified in Regulation 3.

4. Obligations of existing insurers:

(1) The obligations of existing insurers as on the date of

commencement of IRDA Act shall be decided by the Authority after

consultation with them and the quantum of insurance business to be

done shall not be less than what has been recorded by them for the

accounting year ended 31st March, 2000.

(2) The Authority shall review such quantum of insurance business

periodically and give directions to the insurers for achieving the

specified targets.

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

(Life Insurance Reinsurance) Regulations, 2000

File No. IRDA/REG/12/2000:

In exercise of the powers conferred by section 114A of the Insurance

Act, 1938, sections 14 and 26 of the Insurance Regulatory and Development

Authority Act, 1999, the Authority, in consultation with the Insurance

Advisory Committee hereby makes the following regulations, namely:



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1. These regulations may be called the Insurance Regulatory and

Development Authority (Life Insurance - Reinsurance) Regulations,

2000.

2. They shall come into force on the date of their notification in the

Official Gazette.

2. Definitions:

In these regulations, unless the context otherwise requires:

a. Act means the Insurance Act 1938 (4 of 1938);

b. Authority means the Insurance Regulatory and Development

Authority established under sub-section (1) of Section 3 of the

Insurance Regulatory and Development Authority Act 1999 (41 of

1999);

c. Retention means the amount of risk which an insurer assumes for his

own account.

d. Words and expressions used and not defined in these regulations but

defined in the Insurance Act, 1938 (4 of 1938) or Insurance

Regulatory and Development Authority Act, 1999 (41 of 1999), shall

have the meanings respectively assigned to them in those Acts as the

case may be.

3. Procedure to be followed for reinsurance arrangements:


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1. Every life insurer shall draw up a programme of reinsurance in respect

of lives covered by them. The profile of such a programme, duly certified

by the Appointed Actuary, which shall include the name(s) of the

reinsurer(s) with whom the insurer proposes to place business, shall be

filed with the Authority, at least forty five days before the

commencement of each financial year, by the insurer. Provided that the

Authority may, if it considers necessary, elicit from the insurer any

additional information, from time to time, and the insurer shall furnish

the same to the Authority forthwith.

3. The Authority shall scrutinize such a programme of reinsurance as

referred to in sub-regulation (2), and may suggest changes, if it

consider necessary, and the insurer shall incorporate such changes

forthwith in his programme.

4. Every insurer shall retain the maximum premium earned in India

commensurate with his financial strength and volume of business.

5. The reinsurer, chosen by the insurer, shall enjoy a credit rating of a

minimum of BBB of Standard and Poor or equivalent rating of any

international rating agency:

Provided that placement of business by the insurer with any other reinsurer

shall be with the prior approval of the Authority.

Provided further that no programme of reinsurance shall be on originalpremium basis unless the Authority approves such programme.

Provided further that no life insurer shall have reinsurance treaty

arrangement with its promoter company or its associate/group company,


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except on terms which are commercially competitive in the market and with

the prior approval of the Authority, which shall be final and binding.

6. Every insurer shall submit to the Authority statistics relating to its

reinsurance transactions in such forms as it may specify, together with

its annual accounts.

4. Inward Reinsurance Business:

1. Every insurer who wants to write inward reinsurance business shall

adopt a well-defined underwriting policy for underwriting inward

reinsurance business.

2. An insurer shall ensure that decisions on acceptance of reinsurance

business are made by persons with adequate knowledge and

experience, preferably in consultation with the insurers appointed

actuary.

3. An insurer shall file with the Authority, at least forty five days before

the commencement of each financial year, a note on its underwriting

policy indicating the classes of business, geographical scope,

underwriting limits and profit objective.

4. An insurer shall also file any changes to the note referred to in sub-

regulation (3) as and when a change in underwriting policy is made.


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(General Insurance - Reinsurance) Regulations, 2000

F.No.IRDA/Reg./7/2000:


Act, 1938, sections 14 and 26 of the Insurance Regulatory and Development

Authority Act, 1999, the Authority, in consultation with the Insurance

Advisory Committee, hereby makes the following regulations, namely:

1. Short title and commencement :

These regulations may be called the Insurance Regulatory and

Development Authority (General Insurance - Reinsurance)

Regulations, 2000.

They shall come into force on the date of their notification in the

Official Gazette.

2. Procedures to be followed by Reinsurer Arrangements

(1) The Reinsurance Programme shall continue to be guided by the

following objectives to:

a. maximize retention within the country;

b. develop adequate capacity;

c. secure the best possible protection for the reinsurance costs incurred;

d. Simplify the administration of business.


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2. Every insurer shall maintain the maximum possible retention

commensurate with its financial strength and volume of business. The

Authority may require an insurer to justify its retention policy and

may give such directions as considered necessary in order to ensure

that the Indian insurer is not merely fronting for a foreign insurer.

3. Every insurer shall cede such percentage of the sum assured on each

policy for different classes of insurance written in India to the Indian

reinsurer as may be specified by the Authority in accordance with the

provisions of Part IVA of the Insurance Act, 1938.

4. The reinsurance programme of every insurer shall commence from the

beginning of every financial year and every insurer shall submit to the

Authority, his reinsurance programmes for the forthcoming year, 45

days before the commencement of the financial year;

5. Within 30 days of the commencement of the financial year, every

insurer shall file with the Authority a photocopy of every reinsurance

treaty slip and excess of loss cover covernote in respect of that year

together with the list of reinsurers and their shares in the reinsurance

arrangement;

6. The Authority may call for further information or explanations in

respect of the reinsurance programme of an insurer and may issue

such direction, as it considers necessary;

7. Insurers shall place their reinsurance business outside India with only

those reinsurers who have over a period of the past five years counting

from the year preceding for which the business has to be placed,

enjoyed a rating of at least BBB (with Standard & Poor) or equivalent

rating of any other international rating agency. Placements with other


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reinsurers shall require the approval of the Authority. Insurers may

also place reinsurances with Lloyds syndicates taking care to limit

placements with individual syndicates to such shares as are

commensurate with the capacity of the syndicate.

8. The Indian Reinsurer shall organise domestic pools for reinsurance

surpluses in fire, marine hull and other classes in consultation with all

insurers on basis, limits and terms which are fair to all insurers and

assist in maintaining the retention of business within India as close to

the level achieved for the year 1999-2000 as possible. The

arrangements so made shall be submitted to the Authority within three

months of these regulations coming into force, for approval.

9. Surplus over and above the domestic reinsurance arrangements class

wise can be placed by the insurer independently with any of the

reinsurers complying with sub-regulation (7) subject to a limit of 10%

of the total reinsurance premium ceded outside India being placed

with any one reinsurer. Where it is necessary in respect of specialised

insurance to cede a share exceeding such limit to any particular

reinsurer, the insurer may seek the specific approval of the Authority

giving reasons for such cession.

10.Every insurer shall offer an opportunity to other Indian insurers

including the Indian Reinsurer to participate in its facultative and

treaty surpluses before placement of such cessions outside India.

11.The Indian Reinsurer shall retrocede at least 50% of the obligatory

cessions received by it to the ceding insurers after protecting the

portfolio by suitable excess of loss covers. Such retrocession shall be

at original terms plus an over-riding commission to the Indian


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Reinsurer not exceeding 2.5%. The retrocession to each ceding insurer

shall be in proportion to its cessions to the Indian Reinsurer.

12.Every insurer shall be required to submit to the Authority statistics

relating to its reinsurance transactions in such forms as the Authority

may specify, together with its annual accounts.

3. Inward Reinsurance Business

Every insurer wanting to write inward reinsurance business shall have a

well-defined underwriting policy for underwriting inward reinsurancebusiness. The insurer shall ensure that decisions on acceptance of

reinsurance business are made by persons with necessary knowledge and

experience. The insurer shall file with the Authority a note on its

underwriting policy stating the classes of business, geographical scope,

underwriting limits and profit objective. The insurer shall also file any

changes to the note as and when a change in underwriting policy is made.

4. Outstanding Loss Provisioning

(1) Every insurer shall make outstanding claims provisions for every

reinsurance arrangement accepted on the basis of loss information

advices received from Brokers/ Cedants and where such advices are

not received, on an actuarial estimation basis.

(2) In addition, every insurer shall make an appropriate provision for

incurred but not reported (IBNR) claims on its reinsurance accepted

portfolio on actuarial estimation basis.


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(Protection of Policyholders Interest) Regulation, 2002 [AMENDMENT]

F. No. IRDA/Reg./ 10/2002:

In exercise of the powers conferred by clause of sub-section (2) of

section 114A of the Insurance Act, 1938 read with sections 14 and 26 of the

Insurance Regulatory and Development Authority Act, 1999, the Authority,

in consultation with the Insurance Advisory Committee, hereby makes the

following regulations to amend the Insurance Regulatory and Development

Authority (Protection of Policyholders Interests) Regulations, 2002,

namely:-

1 Short title and commencement:

1. These regulations may be called the Insurance Regulatory andDevelopment Authority (Protection of Policyholders Interests)

(Amendment) Regulations, 2002.

2. They shall come into force on the date of their publication in the

Official Gazette.

2. Definition:

For the existing sub-regulation (1) of regulation 3 of the Insurance

Regulatory and Development Authority (Protection of Policyholders

Interests) Regulations, 2002 the following shall be substituted:-


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(1) Notwithstanding anything mentioned in regulation 2(e) above, a

prospectus of any insurance product shall clearly state the scope of

benefits, the extent of insurance cover and in an explicit manner

explain the warranties, exceptions and conditions of the insurance

cover and, in case of life insurance, whether the product is

participating (with-profits) or non-participating (without-profits). The

allowable rider or riders on the product shall be clearly spelt out with

regard to their scope of benefits, and in no case, the premium relatable

to health related or critical illness riders in case of term or group

products shall exceed 100% of premium under the basic product. All

other riders put together shall be subject to a ceiling of 30% of the

premium of the basic product. Any benefit arising under each of the

riders shall not exceed the sum assured under the basic product.

Provided that the benefit amount under riders shall be subject to section

2(11) of the Insurance Act, 1938.

Explanation:

The rider or riders attached to a life policy shall bear the nature and

character of the main policy, viz. participating or non-participating and

accordingly the life insurer shall make provisions, etc., in its books.


(Licensing of Insurance Agents) Regulations, 2000


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In exercise of the powers conferred by sub-section (6) of section 42 and

clauses (k), (l), (m), (n), (o) and (p) of sub-section (2) of section 114A of the

Insurance Act, 1938 (4 of 1938), the Authority, in consultation with the

Insurance Advisory Committee, hereby makes the following regulations,

namely:-


(1) These regulations may be called Insurance Regulatory and

Development Authority (Licensing of Insurance Agents) Regulations,

2000.

(2) They shall come into force on the date of their publication in the

Official Gazette.

2. Issue or renewal of licence -

(1) A person desiring to obtain or renew a licence (hereinafter

referred to as the applicant to act as an insurance agent or a

composite insurance agent shall proceed as follows:-

a. the applicant shall make an application to a designated person,

i. in Form IRDA-Agents-VA, if the applicant is an individual;

ii. in Form IRDA-Agents-VC, if the applicant is a firm or a company:


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Provided that the applicant, who desires to be a composite insurance agent,

shall make two separate applications.

(b) The fees payable by the applicant to the Authority shall be as

specified in Regulation 7.

(2) The designated person may, on receipt of the application along

with the evidence of payment of fees to the Authority, and on being

satisfied that the applicant,

i. possesses the qualifications as specified under Regulation 4;

ii. possesses the practical training as specified under Regulation 5;

iii. has passed the examination as specified under Regulation 6;

iv. has furnished the application complete in all respects;

v. has the requisite knowledge to solicit and procure insurance business;

and

vi. is capable of providing the necessary service to the policyholders;

Grant or renew, as the case may be, a licence in Form IRDA-Agents-VB,

along with identity card in Form IRDA-Agents-VZ:

Provided that in the case of a corporate agent, the identity card shall be in

Form IRDA-Agent-VY.

Provided further that such identity card from one life insurer and such

identity card from one general insurer shall be provided to the applicant

seeking licence to act as a composite insurance agent.


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Provided further that in the case of a firm or a company, all of its partners or

directors, as the case may be, shall fulfil the requirements of sub-clauses (i)

to (iii).

Provided further a licence issued in accordance with this regulation shall

entitle the applicant to act as insurance agent for one life insurer or one

general insurer or both, as the case may be.

(3) If the designated person refuses to grant or renew a licence under

this regulation, he shall give the reasons there for to the applicant.

3. Qualifications of the applicant

The applicant shall possess the minimum qualification of a pass in 12th

Standard or equivalent examination conducted by any recognised

Board/Institution, where the applicant resides in a place with a population of

five thousand or more as per the last census, and a pass in 10th Standard or

equivalent examination from a recognised Board/ Institution if the applicant

resides in any other place.

4. Practical Training:

(1) The applicant shall have completed from an approved institution,

at least, one hundred hours practical training in life or general

insurance business, as the case may be, which may be spread over

three to four weeks, where such applicant is seeking licence for the

first time to act as insurance agent.

Provided that the applicant shall have completed from an approved

institution, at least, one hundred fifty hours practical training in life and


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general insurance business, which may be spread over six to eight weeks,

where such applicant is seeking licence for the first time to act as a

composite insurance agent.

(2) Where the applicant, referred to under sub-regulation (1), is

a. an Associate/Fellow of the Insurance Institute of India, Mumbai;

b. an Associate/Fellow of the Institute of Chartered Accountants of

India, New Delhi;

c. an Associate/Fellow of the Institute of Costs and Works Accountants

of India, Calcutta;d. an Associate/Fellow of the Institute of Company Secretaries of India,

New Delhi;

e. an Associate/Fellow of the Actuarial Society of India, Mumbai;

f. a Master of Business Administration of any Institution / University

recognised by any State Government or the Central Government; or

g. possessing any professional qualification in marketing from any

Institution / University recognised by any State Government or the

Central Government--

He shall have completed, at least, fifty hours practical training from an

approved institution.

Provided that such applicant shall have completed from an approved

institution, at least, seventy hours practical training in life and general

insurance business, where such applicant is seeking licence for the first time

to act as a composite insurance agent.


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(3) An applicant, who has been granted a licence after the

commencement of these regulations, before seeking renewal of

licence to act as an insurance agent, shall have completed, at least

twenty-five hours practical training in life or general insurance

business, as the case may be, from an approved institution.

Provided that such applicant before seeking renewal of licence to act as a

composite insurance agent shall have completed from an approved

institution, at least, fifty hours practical training in life and general

insurance business.

5. Examination:

The Applicant shall have passed the pre-recruitment examination in life

or general insurance business, or both, as the case may be, conducted by the

Insurance Institute of India, Mumbai, or any other examination body.

6. Fees payable:

(1) The fees payable to the Authority for issue or renewal of licence

to act as insurance agent or a composite insurance agent shall be

rupees two hundred and fifty.

(2) The additional fees payable to the Authority, under the

circumstances mentioned in sub-section (3) of section 42 of the Act,

shall be rupees one hundred.

7. Code of Conduct:


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1) Every person holding a licence shall adhere to the code of conduct

specified below:-

i. Every insurance agent shall:

a. identify himself and the insurance company of whom he is an

insurance agent;

b. disclose his licence to the prospect on demand;

c. disseminate the requisite information in respect of insurance products

offered for sale by his insurer and take into account the needs of the

prospect while recommending a specific insurance plan;d. disclose the scales of commission in respect of the insurance product

offered for sale, if asked by the prospect;

e. indicate the premium to be charged by the insurer for the insurance

product offered for sale;

f. explain to the prospect the nature of information required in the

proposal form by the insurer, and also the importance of disclosure of

material information in the purchase of an insurance contract;

g. bring to the notice of the insurer any adverse habits or income

inconsistency of the prospect, in the form of a report (called

Insurance Agents Confidential Report) along with every proposal

submitted to the insurer, and any material fact that may adversely

affect the underwriting decision of the insurer as regards acceptance

of the proposal, by making all reasonable enquiries about the

prospect;

h. inform promptly the prospect about the acceptance or rejection of the

proposal by the insurer;


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i. obtain the requisite documents at the time of filing the proposal form

with the insurer; and other documents subsequently asked for by the

insurer for completion of the proposal;

j. render necessary assistance to the policyholders or claimants or

beneficiaries in complying with the requirements for settlement of

claims by the insurer;

k. advise every individual policyholder to effect nomination or

assignment or change of address or exercise of options, as the case

may be, and offer necessary assistance in this behalf, wherever

necessary;

ii. No insurance agent shall,

a. solicit or procure insurance business without holding a valid licence;

b. induce the prospect to omit any material information in the proposal

form;

c. induce the prospect to submit wrong information in the proposal form

or documents submitted to the insurer for acceptance of the proposal;

d. behave in a discourteous manner with the prospect;

e. interfere with any proposal introduced by any other insurance agent;

f. offer different rates, advantages, terms and conditions other than those

offered by his insurer;

g. demand or receive a share of proceeds from the beneficiary under aninsurance contract;

h. force a policyholder to terminate the existing policy and to effect a

new proposal from him within three years from the date of such

termination;


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i. have, in case of a corporate agent, a portfolio of insurance business

under which the premium is in excess of fifty percent of total

premium procured, in any year, from one person (who is not an

individual) or one organisation or one group of organisations;

j. apply for fresh licence to act as an insurance agent, if his licence was

earlier cancelled by the designated person, and a period of five years

has not elapsed from the date of such cancellation;

k. become or remain a director of any insurance company;

(iii) Every insurance agent shall, with a view to conserve the

insurance business already procured through him, make every attempt

to ensure remittance of the premiums by the policyholders within the

stipulated time, by giving notice to the policyholder orally and in

writing;

8. Cancellation of licence:

The designated person may cancel a licence of an insurance agent, if the

insurance agent suffers, at any time during the currency of the licence, from

any of the disqualifications mentioned in sub-section (4) of section 42 of the

Act, and recover from him the licence and the identity card issued earlier.

9. Issue of duplicate licence:

The Authority may issue a duplicate licence replace a licence lost,

destroyed, or mutilated on payment a fee of rupees fifty.

10. Non-application to existing insurance agents:


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Nothing contained in Regulations 4 to 6 of these Regulations shall apply

to the existing agents before the commencement of these Regulations.


(Licensing of corporate Agents) Regulations, 2002

F. No. IRDA/Reg./ 10/2002:

In exercise of the powers conferred by section 42 and section 42D and

clauses (k), (l), (m), (n), (o) and (p) of sub-section (2) of section 114A of the

Insurance Act, 1938 (4 of 1938), the Authority, in consultation with the

Insurance Advisory Committee, hereby makes the following regulations

namely:-


(1) These regulations may be called the Insurance Regulatory and

Development Authority (Licensing of Corporate Agents) Regulations,

2002.

(2) They shall come into force on the date of their publication in the

Official Gazette.

2. Issue or renewal of licence:

(1) A person desiring to obtain or renew a licence (hereinafter

referred to as the applicant to act as a corporate agent or a

composite corporate agent shall proceed as follows:-


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a. the applicant shall make an application to a designated person in Form

IRDA-Corporate Agents-A-1:

Provided that the applicant, who desires to be a composite corporate agent,

shall make two such separate applications.

(b) The fees payable by the applicant to the Authority shall be as


(2) The designated person may, on receipt of the application along

with the evidence of payment of fees to the Authority, and on being

satisfied that the corporate insurance executive of the applicant:-

1. possesses the qualifications as specified under Regulation 4;

2. possesses the practical training as specified under Regulation 5;

3. has passed the examination as specified under Regulation 6;

4. has furnished an application complete in all respects;

5. has the requisite knowledge to solicit and procure insurance business;

and

6. is capable of providing the necessary service to the policyholders;

Grant or renew, as the case may be, a licence in Form IRDA-Corporate

Agents-L-1.

Provided that the identity card shall be in Form IRDA- Corporate Agents-

ID-1.


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Provided that a licence issued in accordance with this regulation shall entitle

the applicant to act as corporate insurance agent for one life insurer or one

general insurer or both, as the case may be.

Notwithstanding anything contained in the above, the Authority may refuse

or reject, for reasons being recorded, an application if it feels that the grant

of licence may be against public interest or when the application is from

such a person or group of persons who is or are already engaged as

insurance agents, brokers, etc.

(3) The designated person shall grant or renew the licence within aperiod of 3 months from the date of application.

(4) The designated person shall, if the consideration of the application

is likely to get delayed, within 60 days of the receipt of the application

inform the applicant the reasons for such a delay, and the likely time it

would take to do so.

(5) If the designated person refuses to grant or renew a licence under

this regulation, he shall give the reasons thereof to the applicant.

(6) An individual desiring to become a Specified Person of a

corporate agent/ composite corporate agent shall apply through the

corporate agent/ composite corporate agent in Form IRDA-Corporate

Agent-A-2 to the insurer.

(7) The designated person of the insurer may, on receipt of such an

application along with the evidence of payment of fees to the


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Authority, grant or renew, as the case may be, a certificate in Form

IRDA-Corporate Agents-L-2:

(8) The fees payable by the applicant to the Authority shall be as


3. Qualifications:

(1) The applicant being a corporate agent shall ensure that depending

upon the nature of the entity, the Partnership Deed, Memorandum of

Association or any other document evidencing the constitution of the

entity shall contain as one of its main objects soliciting or procuring

insurance business as a Corporate Agent.

(2) The corporate insurance executive shall possess the minimum

qualification of a pass in 12th Standard or equivalent examination

conducted by any recognised Board/Institution, where the applicant

resides in a place with a population of five thousand or more as per

the last census, and a pass in 10th Standard or equivalent examination

from a recognised Board/ Institution if the applicant resides in any

other place.

(3) A specified person shall possess the minimum qualifications

stipulated in sub-regulation (2) above.

(4) Every corporate insurance executive and each of the specified

persons shall also not suffer from any of the disqualifications

specified under Section 42D of the Act.

4. Practical Training:


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Where an applicant is seeking licence for the first time to act as a

corporate agent, a corporate insurance executive of such an applicant

shall have completed from an approved institution, at least, one

hundred hours practical training which may be spread over three to

four weeks, in either life or general insurance business, as the case

may be. Provided that the corporate insurance executive of the

applicant shall have completed from an approved institution, at least,

one hundred fifty hours practical training which may be spread over

six to eight weeks both in life and general insurance business, where

such an applicant is seeking licence for the first time to act as a

composite corporate agent.

Where the corporate insurance executive of the applicant, referred to

under sub-regulation (1), is:

a. an Associate/Fellow of the Insurance Institute of India, Mumbai;

b. an Associate/Fellow of the Institute of Chartered Accountants of

India, New Delhi;

c. an Associate/Fellow of the Institute of Costs and Works Accountants

of India, Calcutta;

d. an Associate/Fellow of the Institute of Company Secretaries of India,

New Delhi;

e. an Associate/Fellow of the Actuarial Society of India, Mumbai;

f. a Master of Business Administration of any Institution/ University

recognised by any State Government or the Central Government; or

g. possessing Certified Associate ship of Indian Institute of Bankers

(CAIIB); or


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h. Possessing any professional qualification in marketing from any

Institution/ University recognised by any State Government or the

Central Government.

He shall have completed, at least, fifty hours practical training from an

approved institution.

Provided that such corporate insurance executive of the applicant shall have

completed from an approved institution, at least, seventy hours practical

training in life and general insurance business, where such applicant is

seeking licence for the first time to act as a composite corporate agent.

(3) A Specified Person shall undergo a practical training of not less

than 100 hours in life or general insurance business, as the case may

be, from an approved institution. In case of training in both life and

general insurance, the duration of practical training shall be not less

than 150 hours. However, if he falls within one of the categories as

given in sub-regulation (2) above, he shall have completed fifty hours

from an approved institution.

Provided that such a specified person of the corporate agent shall have

completed from an approved institution, at least, seventy hours practical

training in life and general insurance business, where such specified person

of the corporate agent is seeking certificate for the first time which will

enable him to procure both life and general insurance business.

5. Examination:


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(1) The corporate insurance executive of the applicant or a specified

person shall have passed the pre-recruitment examination in life or

general insurance business, or both, as the case may be, conducted by

the Insurance Institute of India, Mumbai, or any other examination

body duly recognised by the Authority.

2) The examining body shall issue a certificate to every successful

specified person, which shall enable him to procure insurance

business on behalf of the corporate agent he is working for.

6. Fees payable:

(1) The fees payable to the Authority for issue or renewal of licence

to act as a corporate agentshall be rupees two hundred and fifty.

(2) Every specified person of the corporate agent shall, apply through

the corporate agent to the designated person of the insurer to obtain

the certificate, accompanied by a fees of rupees five hundredremitted

to the Authority.

7. Remuneration:

1) Every Corporate Agent shall be paid a commission as per

provisions of Section 40 A of the Act.

2) Every specified person shall be an employee of the corporate

agent.


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8. Code of Conduct:

1) Every Licensed Corporate Agent shall abide by the code of

conduct specified below. Every corporate agent shall:

a. be responsible for all acts of omission and commission of its corporate

insurance executive and every specified person;

b. ensure that the corporate insurance executive and all specified persons

are properly trained, skilled and knowledgeable in the insurance

products they market;

c. ensure that the corporate insurance executive and the specified persondo not make to the prospect any misrepresentation on policy benefits

and returns available under the policy;

d. ensure that no prospect is forced to buy an insurance product;

e. give adequate pre-sales and post-sales advice to the insured in respect

of the insurance product;

f. extend all possible help and cooperation to an insured in completion

of all formalities and documentation in the event of a claim;

g. give due publicity to the fact that the corporate agent does not

underwrite the risk or act as an insurer,

h. Enter into service level agreements with the insurer in which the

duties and responsibilities of both are defined.

2) Every corporate agent or a corporate insurance executive or a

specified person shall also follow the code of conduct specified


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below. Every corporate agent / corporate insurance executive /

specified person shall,

a. identify himself and the insurance company of whom he is a

representative;

b. disclose his licence/ certificate to the prospect on demand;

c. disseminate the requisite information in respect of insurance products

offered for sale by his insurer and take into account the needs of the

prospect while recommending a specific insurance plan;

d. disclose the scales of commission in respect of the insurance product

offered for sale, if asked by the prospect;

e. indicate the premium to be charged by the insurer for the insurance

product offered for sale;

f. explain to the prospect the nature of information required in the

proposal form by the insurer, and also the importance of disclosure of

material information in the purchase of an insurance contract;

g. bring to the notice of the insurer any adverse habits or income

inconsistency of the prospect, in the form of a report (called

Insurance Agents Confidential Report along with every proposal

submitted to the insurer, and any material fact that may adversely

affect the underwriting decision of the insurer as regards acceptance

of the proposal, by making all reasonable enquiries about the

prospect;

h. inform promptly the prospect about the acceptance or rejection of the

proposal by the insurer;


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i. obtain the requisite documents at the time of filing the proposal form

with the insurer; and other documents subsequently asked for by the

insurer for completion of the proposal;

j. render necessary assistance to the policyholders or claimants or

beneficiaries in complying with the requirements for settlement of

claims by the insurer;

k. advise every individual policyholder to effect nomination or

assignment or change of address or exercise of options, as the case

may be, and offer necessary assistance in this behalf, wherever

necessary;

3. No corporate agent/ corporate insurance executive/ specified

person shall,

a. solicit or procure insurance business without holding a

valid licence/ certificate;

b. induce the prospect to omit any material information in

the proposal form;

c. induce the prospect to submit wrong information in the

proposal form or documents submitted to the insurer for

acceptance of the proposal;

d. behave in a discourteous manner with the prospect;

e. interfere with any proposal introduced by any other

specified person or any insurance intermediary;

f. offer different rates, advantages, terms and conditions

other than those offered by his insurer;


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g. demand or receive a share of proceeds from the

beneficiary under an insurance contract;

h. force a policyholder to terminate the existing policy and

to effect a new proposal from him within three years

from the date of such termination;

i. No corporate agent shall have a portfolio of insurance

business from one person or one organization or one

group of organizations under which the premium is in

excess of fifty percent of total premium procured in any

year;

j. apply for fresh licence to act as an insurance agent, if his

licence was earlier cancelled by the designated person,

and a period of five years has not elapsed from the date

of such cancellation;

k. become or remain a director of any insurance company;

4) Every corporate agent shall, with a view to conserve the insurance

business already procured through him, make every attempt to ensure

remittance of the premiums by the policyholders within the stipulated

time, by giving notice to the policyholder orally and in writing.

5) No director of a company or a partner of a firm or the chiefexecutive or a corporate insurance executive or a specified person

shall hold similar position with another corporate agent of any other

insurance company.


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9.Renewal of Licence:

(1) Every licence granted by the Authority to a corporate agent or any

renewal thereof, in terms of these regulations, shall remain in force for

three years.

(2) A licence granted to a corporate agent may be renewed for a

further period of three years on submission of the application form

along-with a renewal fee of rupees two hundred and fifty, at least

thirty days prior to the date of expiry of the licence.

(3) The additional fees payable to the Authority, under the

circumstances mentioned in sub-section (3) of section 42 of the Act,

shall be rupees one hundred.

(4) The Authority may, if it is satisfied that undue hardship would be

caused otherwise, accept any application after the licence ceased to

remain in force, on the payment by the applicant of a payment of

rupees seven hundred and fifty as additional fee.

(5) Every certificate granted to the specified person shall remain in

force for a period of three years which can be renewed for a further

period of three years on submission of an application form

accompanied by fees of rupees one hundred, provided that the licence

of the corporate agent continues to be valid. The application form

along-with the fees shall be submitted at least thirty days prior to the

date of expiry.


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(6) The specified person on his ceasing to be an employee of the

corporate agent shall surrender his certificate to the designated person.

If he desires to become an individual insurance agent then he shall

follow the procedure as laid down in Insurance Regulatory and

Development Authoritys (Licensing of Insurance Agents)

Regulations, 2000. Such a person need not go through a further

process of training and pass at the examination within the period of

licence granted to them.

(7) A specified person will also be governed by the provisions of sub-

regulation (3) and (4) stated above.

(8) Every corporate insurance executive or the specified person of the

corporate agent shall have completed at least twenty-five hours

practical training in life or general insurance business, as the case may

be, from an approved institution, for the purposes of renewal of

licence to the corporate agent and/or renewal of certificate to the

specified person.

Provided that such applicant before seeking renewal of licence or certificate

to act as a composite insurance agent shall have completed from an

approved institution, at least, fifty hours practical training in life and

general insurance business.

10. Cancellation of licence/ certificate:


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The designated person may cancel a licence or a certificate of a

corporate agent or a specified person, if such a corporate agent or the

corporate insurance executive or the specified person suffers, at any time

during the currency of the licence, from any of the disqualifications

mentioned in sub-section (4) of section 42D of the Act and recover from him

the licence or certificate granted to him.

11. Issue of duplicate licence:

The Authority may on payment of a fee of rupees fifty issues a duplicate

licence to replace a licence, which is lost, destroyed, or mutilated.

12. Non-application to existing insurance agents:

(1) A corporate agent who has been issued a corporate agent licence

prior to the commencement of these regulations shall exercise the

option of either continuing with the existing licence till the expiry of

the licence so granted or surrender the existing licence and apply for a

new licence in terms of regulation 3.

(2) A Person holding an individual insurance agents licence who

wishes to become a corporate agent shall surrender the individual

licence and apply afresh as per regulation 3.

13. Miscellaneous:

Every corporate agent shall maintain a register which shall contain the

name, address, telephone no, photograph, date of commencement of

employment, date of leaving the service, if any, salary paid to the specified

person.


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Insurance Regulatory and Development Authority (Meetings) Regulations,

2000


In exercise of the powers conferred by sub-section (4) of Section 10 read

with clauses (a) and (b) of sub-section (2) of section 26 of the Insurance

Regulatory and Development Authority Act, 1999 (41 of 1999), the

Authority, in consultation with the Insurance Advisory Committee, hereby

makes the following regulations, namely:-

1. Short title, extent and commencement:


Development Authority (Meetings) Regulations, 2000.

2. They shall come into force on the date of their publication in the

Official Gazette.

2. Meetings of the Authority for transaction of business and

procedure to be followed:


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1. The Authority may meet for the transaction of business, adjourn and

otherwise regulate its meetings, as provided in these regulations.

2. The Authority shall meet, as often as may be necessary but not less

than six times in a year, to transact its business.

3. The meetings of the Authority shall normally be held at its Head

Office. Whenever circumstances render it expedient to hold a

meeting elsewhere, the same may be so held at any other place in

India, at the discretion of the Chairperson.

4. The Chairperson and in his absence, the senior most full time member

of the authority shall fix the date, time and place of meetings of the

Authority and approve the items of agenda for the meetings.

5. The notice and agenda for the meeting shall be normally circulated

seven days in advance by the Designated Officer. The notice and

agenda may be delivered to the members personally upon

acknowledgement or dispatched through registered post or transmitted

through any other secure and reliable modern means of

communication, as may be recognised under any law for the time

being in force.

6. Every meeting of the Authority shall be presided over by the

Chairperson. If for any reason, the Chairperson is unable to attend a

meeting of the Authority, any other member chosen by the members

present from amongst themselves at the meeting shall preside at the

meeting.

7. All questions which come up before any meeting of the Authority

shall be decided by a majority in case of voting by the members

present and in the event of any equality of votes, the Chairperson, or

in his absence, the presiding member shall have a casting vote.


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8. An item not included in the agenda of a meeting may be taken up for

consideration, if so approved by the Chairperson or the presiding

member, as the case may be.

3. Quorum:

1. The quorum for transaction of business at a meeting of the Authority

shall be a minimum of one-third of the appointed members present.

2. Where at any time the total strength of the Authority is less than four,

the total number of members, being not less than two, shall constitute

the quorum during such time.

3. If at any meeting, quorum is not present, the Chairperson or the

presiding member, as the case may be, shall after waiting for thirty

minutes, adjourn the meeting for such hour on some other day as he

may think fit and the notice of such adjournment shall be given to all

the members and the business which was to have been brought before

the original meeting, had there been a quorum, shall be brought before

the adjourned meeting. Where at the adjourned meeting also, the

required quorum is not present, the members present, shall constitute

the quorum.

4. A member shall attend all the meetings of the Authority, save where

leave of absence has been sought and the same has been granted bythe Chairperson or the presiding member.

4. Emergent Meeting:


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1. Notwithstanding any thing contained in the foregoing regulations, the

Chairperson, may, by giving at least forty-eight hours notice, convene

an emergent meeting of the Authority at any time or place to consider

any item, which in his opinion, requires an urgent decision.

2. The Chairperson shall call an emergent meeting if he receives the

requisition in writing, signed by members constituting not less than

one-half of the total strength, stating the purpose for which they desire

the meting to be called. Upon receipt of the requisition, the

Chairperson shall by giving at least forty-eight hours notice, convene

the requisitioned emergent meeting.

5. Minutes of the meetings:

1. The Designated Officer shall record, within forty-eight hours of the

conclusion of every meeting, the minutes of all proceedings at the

meeting of the authority or committees meeting of the Authority and

after obtaining the approval of the Chairperson or the presiding

member, as the case may be, enter the minutes in books kept for that

purpose.

2. Each page of every such book shall be initialed or signed and the last

page of the record of proceedings of each meeting in such books shall

be dated and signed by the Chairperson or the presiding member, as

the case may be.

3. In no case the minutes of the proceedings of a meeting shall be

attached to any such book as aforesaid by pasting or otherwise but

may be kept on loose-leaf style and bound regularly.

4. Notwithstanding any thing contained in sub-regulation(3), the minutes

may also be kept by way of micro films or any other authentic modern


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means of safe storing and retrieval of records or printed material

produced by a computer, if the same is recognised under any law and

subject to the conditions, restrictions or safeguards mentioned in such

law.

5. The minutes of each meeting shall contain a fair and correct summary

of the decisions arrived at the meeting.

6. The minutes shall also contain

a. the names of the members present at the meeting; and

b. In the case of each decision taken at the meeting, the names of themembers, if any, dissenting from, or not concurring with the decision

taken.

(7) Nothing contained in this regulation shall be deemed to require the

inclusion in any such minutes of any matter which are detrimental to

the interests of the Authority.

(8) Minutes of the meetings kept in accordance with this regulation

shall be evidence of the proceedings recorded therein.

9. The Designated Officer shall after the approval of the minutes by the

Chairperson or the presiding member, as the case may be, send a copy

of the minutes as entered in the minutes books to every member of the

Authority for his information.

10.The Designated Officer shall also communicate, with the approval of

the Chairperson or the presiding member, the relevant extracts of the

decision taken at the meeting of the Authority or any of its

Committees to all concerned for necessary follow-up action and


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monitor their compliance by evolving a suitable reporting system.

Periodical reports on follow-up action shall be submitted to the

Authority.

6. Invitees at meeting:

Any person, whose presence at a meeting is desired for his

advice/consultation, may be invited to attend the meeting by the

Chairperson.

7. Miscellaneous provisions:

1. The provisions of these regulations shall apply mutatis mutandis to

meetings of Committees of members.

2. The Chairperson may attend any committee meeting as ex officio

member and whenever the Chairperson attends any committee

meeting, he shall preside over that meeting.

3. No member, other than the Chairperson or a person specifically

authorized by him, shall give information to the Press or any other

public media on matters relating to the working of the Authority and

decisions taken at meetings.


(Registration of Indian Insurance Companies) (Amendment) Regulations,

2003


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Act, 1938 (4 of 1938) read with section 26 of the Insurance Regulatory and

Development Authority Act, 1999 (41 of 1999), the Authority, in

consultation with the Insurance Advisory Committee, hereby makes the

following regulations to amend the Insurance Regulatory and Development

Authority (Registration of Indian Insurance Companies) Regulations, 2000,

namely: -



Development Authority (Registration of Indian Insurance Companies)

(Amendment) Regulations, 2003.

2. They shall come into force on the date of their publications in the

official gazette, except clause (ii) of regulation, which shall be

deemed to have come into force with effect from 1st April 2001.

2. Definitions:

In the Insurance Regulatory and Development Authority (Registration of

Indian Insurance Companies) Regulations, 2000, in sub-regulation (1) of

regulation 20, for the existing words preceding clause (a) thereof, the

following words shall be substituted:

(I) An insurer, who has been granted a certificate under section 3 of

the Act, shall make an application in form IRDA/R5 for the renewal


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of the certificate in Form IRDA/R6 to the Authority before the 31 st

day of December each year and such application shall be accompanied

by evidence of the payment of the fee which shall be higher of

(ii) At the beginning of clause (b) of sub-regulation (1) of regulation

20, the words one-fifth shall be substituted with the words one-

tenth

(iii) After Form IRDA/R4, the following Form shall be added as Form

IRDA/R5.

MEASURES TO PROTECT INTEREST OF POLYHOLDERS

Ombudsmen

The IRDA has appointed Ombudsmen. Their function is to resolve

complaints in respect of disputes between policyholders and insurers in cost

effective, efficient and impartial manner. The complaints to the Ombudsman

may relate to:

(a) partial or total repudiation of claims


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(b) any dispute regarding premium paid or payable in terms of the

policy

(c) any dispute on the legal construction of the policy relating to

claims

(d) delay in settlement of claims

(e) non-issue of any insurance document to customers after receipt

of premium.

The Ombudsman is not a judicial authority. It will act as counsel and

mediator in matters within its terms of reference. It has no right to summon

witnesses. It has to make its decision on the basis of documents submitted to

it. The complainant and the insurer are allowed to make personal

submissions. But lawyers are not permitted to argue the case.

Complaints to the Ombudsman lie only when the insurer had rejected

the complaint or no reply was received within one month of the complaint or

the reply was not satisfactory. A complaint can be made within one year

after the insurer had rejected the representation. The subject matter should

not be already before any court or consumers forum or arbitration.

The Ombudsman is expected to make a recommendation within one

month from the date of receipt of complaint. It the complainant accepts this

recommendation, the insurer has to comply within 15 days and inform the

Ombudsman accordingly. If the complainant does not accept the

Ombudsmans recommendation, the Ombudsman shall pass an award in

writing, stating the amount awarded which shall not be in excess of what is


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necessary to cover the loss suffered by the complainant as direct

consequence of the insured peril or for an amount not exceeding Rs.

20,00,000, whichever is lower. The award has to be passed within 3 months.

The complainant has to intimate his acceptance of the award within one

month by a letter of acceptance to the insurer and the insurer has to comply

within 15 days and inform the Ombudsman. If the complainant does not

intimate acceptance, the award cannot be implemented.

Right to Information Act,2005

IRDAs Obligation under the Act

The Insurance Regulatory and Development Authority (IRDA) is a public

authority as defined in the Right to Information Act, 2005. As such, the

Insurance Regulatory and Development Authority is obliged to provide

information to members of public in accordance with the provisions of thesaid Act.

Access to the Information held by IRDA

The right to information includes access to the information which is held by

or under the control of any public authority and includes the right to inspect

the work, document, records, taking notes, extracts or certified copies of

documents / records and certified samples of the materials and obtaining

information which is also stored in electronic form.


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IRDA Website

The IRDA maintains an active website (URL: http://www.irdaindia.org ).

The site is updated regularly and all the information released by the IRDA is

also simultaneously made available on the website. The information

published in public domain include the following:

1. Acts/Regulations

2. Information relating to Insurers/Reinsureres, Agents Training

Institutes, Appointed Acturies.

3. Information relating to Surveyors, Third Party Administrators,

Insurance Brokers, Corporate Agents

4. Information relating to Insurance Councils, Insurance Ombudsmen

5. Annual Report/IRDA Journal

6.Press Releases.

Complaints against Insurance Companies

IRDA has provided for a separate channel for lodging complaints against

deficiency of services rendered by Insurance Companies. If anyone has a

complaint/grievance against an insurance company for poor quality of

service rendered by any of its offices/branches, can approach the Nodal

Officer of the Insurance Company concerned. In case he is not satisfied with


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the Insurance Companys response can also file a complaint with the

Insurance Ombudsman in respective State.

Complaints from Policyholders

Policyholders who have complaints against insurers are required to first

approach the Grievance/Customer Complaints Cell of the concerned insurer.

If they do not receive a response from insurer(s) within a reasonable period

of time or are dissatisfied with the response of the company, they may

approach the Grievance Cell of the IRDA.

Insurance Information Bureau (IIB)

In order to fulfill the statutory mandate as enunciated in Section 14 (2) (1)

(e) of the IRDA Act, 1999, the Authority hereby constitutes Insurance

Information Bureau (IIB).

For efficient functioning of the insurance sector companies as well as

for the protection of the interests of the policyholders, it is necessary that

reliable, timely and accurate data is collected, processed and disseminated

by an independent body.

The Insurance Regulatory and Development Authority (IRDA) being

the regulator is having necessary access to the data related to insurance

business in the country. Hence it becomes the duty of the regulator to ensure

that the available data is processed in such a fashion that it is useful for the


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various market players, researchers, policyholders as well as the common

public at such intervals that it will be helpful for real-time decision making.

It is also essential for IRDA to undertake this activity through an

advisory body consisting of representatives of the industry, experts in the

insurance domain as well as in information technology as the data so

produced by such a body will have necessary public confidence.

CURRENT AFFAIR:

DISPUTE BETWEEN IRDA & SEBI ON ULIP

On 9th April 2010, SEBI banned 14 life insurance companies from

raising funds through Unit-linked Insurance Policies(ULIP). The life

insurance companies against whom SEBI passed the order are SBI Life,

ICICI Prudential, Tata AIG, Aegon Religare Life, Aviva Life, Bajaj Allianz,


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Bharti AXA, Birla Sunlife, HDFC Standard Life, ING Vysya Life, Kotak

Mahindra Old Mutual Life, Max New York Life, Metlife India and Reliance

Life. The Sebi order does not cover state-owned insurance major LIC.

A day later, insurance sector regulator IRDA asked the companies to

ignore the SEBI order and do business as usual.

Ulips are insurance plans with disparate investment options and have

captured the buyers imagination in the last few years. They also hold the

dubious distinction of being one of the most grossly mis-sold financial

products in the country. ULIP is an insurance product in which a bulk of the

premiums is invested in equities and bonds.

At present, over 70% of the new business premium for most insurance

companies come from ULIPs, running into thousands, if not lakhs of

customers. The genesis of the SEBI order goes back to the feud between

MFs and insurance companies.

One of the main contention is that although a ULIP is an insurance

product which comes under IRDA, part of it is also an investment product

which should ideally be regulated by SEBI.

The issue was also taken up at the meeting of the inter-regulatory

body, the High Level Coordination Committee (HLCC). It was decided at

the meeting that the two regulators should settle the issue between

themselves. So, SEBI has taken a legal process. In the context of

Introduction Irda

Documents

Transcript of Introduction Irda