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."
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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:
1. Short title and commencement:
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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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INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY
(General Insurance - Reinsurance) Regulations, 2000
F.No.IRDA/Reg./7/2000:
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:
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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INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY
(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.
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY,
(Licensing of Insurance Agents) Regulations, 2000
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F.No.IRDA/Reg./7/2000:
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. Short title and commencement:
(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.
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY
(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. Short title and commencement:
(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
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 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
specified in Regulation 7.
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,
Insurance Regulatory and Development Authority (Meetings) Regulations,
2000
F.No.IRDA/Reg./7/2000:
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:
1. These regulations may be called the Insurance Regulatory and
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.
INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY
(Registration of Indian Insurance Companies) (Amendment) Regulations,
2003
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F.No.IRDA/Reg./26/2003:
In exercise of the powers conferred by section 114A of the Insurance
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: -
1. Short title and commencement:
1. These regulations may be called the Insurance Regulatory and
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