Insurance Regulatory and Development Authority of India (IRDAI)

Context: IRDAI slaps ₹1 crore fine on Edelweiss Life

Statutory, Autonomous Body under Ministry of Finance

Formed under: IRDA Act, 1999

Key Facts:

• Established: 1999 (Act passed), operational from April 2000

• Headquarters: Hyderabad, Telangana (shifted from Delhi in 2001)

• Structure: 10-member body (1 Chairperson, 5 full-time, 4 part-time members)

Objectives:

• Promote competition, improve customer satisfaction

• Ensure financial soundness of the insurance market

• Protect policyholder interests

Recent Developments (2024):

• Removed age limit (65 years) for purchasing health insurance

• Directed insurers to create senior citizen-specific health policies and grievance redressal channels

Historical Background:

• Insurance in India dates back to the 19th century (Oriental Life Insurance Co., 1818)

• Life Insurance Nationalised: 1956 (LIC formed)

• General Insurance Nationalised: 1972 (GIC and four subsidiaries created)

• Reform Era:

  • 1993: Malhotra Committee set up

  • 1994: Recommended private entry + FDI

  • 2000: IRDA opened market to private players (FDI cap initially 26%, now 74% as per 2021 Budget)

Key Functions (Section 14, IRDAI Act 1999):

• License & regulate insurers, intermediaries, surveyors

• Specify qualifications & codes of conduct

• Protect policyholder interests

• Regulate investment norms, solvency margins

• Frame tariffs, policy terms not under Tariff Advisory Committee

• Adjudicate insurer-intermediary disputes

• Promote professional bodies in insurance

• Enforce rural/social sector insurance obligations

Insurance Repository System:

• Electronic platform to hold policies in dematerialised form

• Enhances transparency, efficiency & ease of access

Significance for India:

• Insurance + banking contribute ~7% to GDP

• Promotes financial inclusion, risk mitigation, long-term capital formation