Insurance law regulations in India
Insurance law regulations in India manage all the matters related to various insurance companies in the country. The concept of insurance in India dates back to the ancient period. The idea of getting anything insured gained its momentum from the overseas traders who used to practice marine insurance in somewhat crude form. Social insurance was the first of its kind which took shape in India. Since its introduction, the history of insurance in India has undergone many phases. Earlier, the insurance companies in India were privatized.
Entry of private companies: A landmark decision
In the later years, insurance companies were nationalized with the help of insurance laws. In the most recent move in this regard, the Insurance law regulations in India permitted the entry of private companies and foreign investment in the sector. This remarkable decision gave the industry a breath of fresh air. Much of the development and growth of the insurance sector in India owes to the decision of the government to nationalize the insurance business in India and to allow private and foreign insurance companies to establish their business in the country.
There are 4 regulatory authorities which oversee different functioning of the insurance companies in India and provide guidelines to them. These include:
- Insurance Regulatory and Development Authority (IRDA)
- Tariff Advisory Committee
- Insurance Association of India
Insurance Regulatory and Development Authority (IRDA)
Insurance Regulatory and Development Authority (IRDA) is a very powerful body which oversees important aspects of the functioning of the insurance companies in India. It was set up by the government to safeguard the interest of the insurance policy holders of the country.
Some of the important powers, duties and functions of Insurance Regulatory and Development Authority (IRDA) include:
- To regulate, ensure and promote the orderly growth of the insurance business
- To prescribe regulations on the investment of funds by insurance companies
- To regulate the maintenance of the margin of solvency
- To adjudicate the disputes between insurers and intermediaries
- To supervise the functioning of the Tariff Advisory Committee
Tariff Advisory Committee
The prime duty of Tariff Advisory Committee is to regulate and control the rates, benefits, terms and conditions offered by the insurance companies working in India.
Insurance Association of India:
All the insurance companies functional in India are members of the Insurance Association of India. It has 2 councils under its patronage. These are known as:
- Life Insurance Council
- General Insurance Council
Ombudsmen play important role in regulating and ensuring smooth functions of the insurance companies. They are appointed to address all complaints relating to settlements of claims. Anyone having a grievance against an insurance company can approach Ombudsmen for redressal.