Insurance Regulatory and Development Authority of India (IRDAI )

Context:

Saral Jeevan Bima, launched by IRDAI (Insurance Regulatory and Development Authority of India) in 2020, has become a popular term life insurance product among masses.

Key Highlights:

• Regulator IRDAI mandated life insurance companies to launch a standard term insurance policy ‘Saral Jeevan Bima’ by January 1, 2021 to help customers take informed decisions.
• IRDAI said, “A standard product will make it easier for the customers to make an informed choice, enhance the trust between the insurers and the insured, and reduce mis-selling as well as potential disputes at the time of claim settlement.”
• The Saral Jeevan Bima will be a pure term life insurance product that can be purchased by people in the age group of 18 to 65 years and will have a policy term of 4 to 40 years.
• The sum assured for the term life insurance policy will range from Rs 5 lakh to Rs 25 lakh (in multiples of Rs 50,000).
• As per the guidelines, Saral Jeevan Bima will have no maturity benefit and will have a 45-days waiting period.
• There are no exclusions, other than suicides.

Insurance Regulatory and Development Authority of India (IRDAI)

• It is a regulatory body 
• Comes under the jurisdiction of Ministry of Finance , Government of India.
• It is tasked with regulating and promoting the insurance and re-insurance industries in India.
• It was constituted by the Insurance Regulatory and Development Authority Act, 1999, an Act of Parliament passed by the Government of India.
• The agency’s headquarters are in Hyderabad, Telangana, where it moved from Delhi in 2001

Structure

Section 4 of the IRDAI Act 1999 specifies the authority’s composition. It is a ten-member body consisting of a chairman, five full-time and four part-time members appointed by the government of India.

Functions

The functions of the IRDAI are defined in Section 14 of the IRDAI Act, 1999, and include:

• Issuing, renewing, modifying, withdrawing, suspending or cancelling registrations
• Protecting policyholder interests
• Specifying qualifications, the code of conduct and training for intermediaries and agents
• Specifying the code of conduct for surveyors and loss assessors
• Promoting efficiency in the conduct of insurance businesses
• Promoting and regulating professional organisations connected with the insurance and re-insurance industry
• Levying fees and other charges
• Inspecting and investigating insurers, intermediaries and other relevant organisations
• Regulating rates, advantages, terms and conditions which may be offered by insurers not covered by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938)
• Specifying how books should be kept
• Regulating company investment of funds
• Regulating a margin of solvency
• Adjudicating disputes between insurers and intermediaries or insurance intermediaries
• Supervising the Tariff Advisory Committee
• Specifying the percentage of premium income to finance schemes for promoting and regulating professional organisations
• Specifying the percentage of life- and general insurance business undertaken in the rural or social sector
• Specifying the form and the manner in which books of accounts shall be maintained, and statement of accounts shall be rendered by insurers and other insurer intermediaries.