Insurance Regulatory Development Authority of India (IRDAI)
Every sector of the country has a central body which determines the regulations for that particular sector to follow. The insurance companies in India are supervised by a body called the IRDAI- Insurance Regulatory Development Authority of India. Both Life Insurance and General Insurance companies fall under this body. It is the organisation that sets the rules and guidelines for the smooth functioning of the Indian Insurance Industry- both Life Insurance and General Insurance. The regulation and development of these industries also fall under the IRDAI.
What is IRDAI?
Insurance Regulatory Development Authority of India (IRDAI) is a regulatory body created with the aim of protecting your interests. It also regulates and sees to the development of the insurance industry, while monitoring insurance-related activities.
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What is the purpose of IRDAI?
The credibility of the insurance sector was threatened due to the establishment of many insurance companies which practised their own business rules and rates. Due to this, the Government of India established an independent body which could regulate the rules and protect the interests of customers. This is how IRDAI came into existence.
This body now monitors the development of the Insurance Industry in India.
How does IRDAI work?
IRDAI works as an autonomous body. Their main task is to ensure and regulate fair prices in the insurance industry for all customers. IRDAI has a wide scope of work and it sets boundaries by not favoring any insurance companies but works for the overall development of the industry as a whole.
- It monitors and protects the interests of policyholders by ensuring that no insurance company can deny the claim on the basis of free will and honour the scope of the cover
- It sets a code of conduct for the Insurance Industry of the country as a whole
- It prevents the occurrence of misdeeds and conducts investigations
- It regulates the rates offered by all insurance companies so it is fair for all customers
- It provides resolution in case of any dispute between the insurer and policyholder
Role of IRDAI in the Insurance Industry
The insurance industry of India works as per the guidelines set as per the IRDAI.
Here are some of the significant responsibilities of IRDAI.
- Ensure the systematic growth of the insurance industry to benefit customers who invest in insurance policies for safeguarding their life and family
- Promote fair dealings between the insurance companies and policyholders
- Provide resolution in case of disputes and expedite claim settlement
- Prevent frauds and scams by setting proper standards for the industry and conducting vigilance
What is Insurance Ombudsman?
Insurance Ombudsman is a scheme initiated by the Government of India to ensure a cost-effective, efficient and impartial settlement of your grievances. There are 17 Ombudsman offices in India, each covering different regions (jurisdictions). You can file your complaint without paying anything at an office that covers your jurisdiction.
Once the grievance is lodged, the office of Ombudsman arranges a hearing. This hearing is attended by the claimant and the representatives of the insurer. Usually, the Ombudsman declares the award within three months of the hearing. However, you can approach an Ombudsman only if the value of the claim is less than or equal to `30 lakh.