Insurance Regulatory Development Authority of India (IRDAI)

The insurance companies in India are supervised by IRDAI - Insurance Regulatory Development Authority of India. IRDAI regulates the Indian Insurance Industry to protect the interests of the policyholders and work for the orderly growth of the industry.

What is IRDAI?

The Insurance Regulatory Development Authority of India (IRDAI) is a regulatory body created with the aim of protecting the policyholder’s interest. It also regulates and sees to the development of the insurance industry.

Click here to know more about IRDAI.

History and Purpose of IRDAI?

The statutory body of IRDAI was established in the year 1999, deriving its powers and functions from the IRDAI Act, 1999 and the Insurance Act, 1938. IRDAI works as an autonomous body responsible for managing and regulating the insurance and reinsurance industry in India along with registering and/or licensing insurance, reinsurance companies and intermediaries according to the regulations. Some purposes of IRDAI are:

• To protect the interest of the policyholders
• To regulate and promote the orderly growth of the insurance and reinsurance industry
• To ensure speedy claim settlement and prevent Insurance frauds and other malpractices
• To better the standards of insurance markets
• To take action when established regulatory standards are ineffectively enforced

Powers and Functions of IRDAI in the Insurance Industry

To protect the interests of policyholders, the IRDAI was granted significant responsibilities. Here are some of them.

• Efficiently conducting insurance business and protecting the interests of the policyholders in matters concerning assigning of policy, nomination by policyholders, insurable interest, settlement of insurance claim, surrender value of the policy and other terms and conditions of contracts of insurance
• Approving product terms and conditions offered by various insurers
• Regulating investment of funds by insurance companies and maintaining a margin of solvency
• Specifying financial reporting norms of insurance companies
• Ensuring insurance coverage is provided in the rural areas and also to the vulnerable sections of society

What is Insurance Ombudsman?

Office of Insurance Ombudsman is an alternate Grievance Redressal platform which has been setup with an aim to resolve grievances of aggrieved policyholders against Insurance Companies and their Intermediaries or Insurance Brokers in a speedy and cost-effective manner.

There are 17 Ombudsman Centres across the country situated in the following major cities Ahmedabad, Bengaluru, Bhopal, Bhubaneswar, Chandigarh, Chennai, Delhi, Guwahati, Hyderabad, Jaipur, Kochi, Kolkata, Lucknow, Mumbai, Noida, Pune and Patna. Click here to download the list of Ombudsman’s offices and their respective addresses.

The Insurance Ombudsmen are appointed by the Council for Insurance Ombudsmen in terms of Insurance Ombudsman Rules, 2017 (as amended from time to time) and are empowered to receive and consider complaints alleging deficiency in the required performance of an insurer (including its agents and intermediaries) or an insurance broker, on any of the following grounds:

• Delay in settlement of claims
• Any partial or total repudiation of claims by the life insurer, general insurer or health insurer
• Disputes over premium paid or payable in terms of insurance policy
• Misrepresentation of policy terms and conditions at any time in the policy document or policy contract
• Legal construction of insurance policies in so far as the dispute relates to the claim
• Policy servicing related grievances against insurers and their agents and intermediaries
• Issuance of life insurance policy, general insurance policy including health insurance policy which is not in conformity with the proposal form submitted by the proposer
• Non-issuance of insurance policy after receipt of premium in life insurance and general insurance including health insurance
• Any other matter arising from non-observance of or non-adherence to the provisions of any regulations made by the Authority (IRDAI) with regard to the protection of policyholders’ interests or regulations, instructions or guidelines issued by the IRDAI or of the terms and conditions of the policy contract, insofar as such matter relates to issues referred to the above clauses

As per the Insurance Ombudsman (Amendment) Rules 2023, an Ombudsman can award compensation up to ₹ 50 lakh to the Policyholders.

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