1.01. Insurance in India has come of age.Insurers have been operating in India for a very long time, but insurance then was entirely the monopoly of the state-owned Life Insurance Corporation and four general Insurance Companies. In the post- liberalisation phase, private entrepreneurs have also come on to the scene. Since insurance is concerned with the protection of a citizen™s life and /or properties as well as national wealth, ever since insurance emerged as a business, Government, in view of its strong societal links, have felt the need for its proper monitoring and regulation through extensive legislation.
1.02. In order to protect the interests of holders of insurance policies, on 19th of April, 2000, the Government set up the Insurance Regulatory and Development Authority (IRDA) under the Insurance Regulatory and Development Authority Act, 1999 (IRDA Act), to regulate, promote and ensure the orderly growth of the insurance industry and for matters connected therewith or incidental thereto and further to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the General Insurance Business (Nationalisation) Act,1972.
1.03. Insurance business has always been truly global and international in scope. Recognizing this, regulators of different countries banded together to form the International Association of Insurance Supervisors (IAIS). India is among the more than one hundred members of IAIS. The broad principles of IAIS are meant to see that:
¢ There is recognition of the fact that insurance is an international subject;
¢ Insurance requires to be monitored properly to ensure its healthy growth; and
¢ There is a standards setting mechanism.
1.04. The International standards are mainly concentrated around the following areas:
¢ Control over registration of companies
¢ Management of business through fit and proper persons to be employed
¢ Pricing of products to be done on prudent lines
¢ Management of Investments and associated Risks
¢ Maintenance of required Solvency margin
¢ Proper settlement of claims of policy holders.
1.05. Hence, world over, the focus is on building control systems around the above key factors through regulations. In India, IRDA has implemented such controls through the following key regulations, as amended from time to time:
1. IRDA (Registration of Indian Insurance Companies) Regulations, 2000
2. IRDA (Assets, Liabilities and Solvency Margin of Insurers) Regulations, 2000
3. IRDA (Appointed Actuary) Regulations, 2000
4. IRDA (Actuarial Report and Abstract) Regulations, 2000
5. IRDA (Investment) Regulations, 2000
6. IRDA (Preparation of Financial Statements and Auditor™s Report of Insurance Companies) Regulations, 2000
7. IRDA (General Insurers Re-insurance) Regulations, 2000
8. IRDA (Life Insurers Re-insurance) Regulations, 2000
9. IRDA (Protection of Policyholders™ Interest) Regulations, 2000
10. IRDA (Distribution of Surplus) Regulations, 2000
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