IRDA Full Form – Insurance Regulatory and Development Authority of India

Also Check: IPC Full Form

IRDA Overview
Formation Year	1999
Headquarters	Sy No. 115/1, Financial District, Nanakramguda, Hyderabad – 500032
Coordinates	17.385°N 78.486°E
Services	Insurance of India
Owner	Ministry of Finance, Government of India
Key People	Debasish Panda, IAS (Chairperson)
Website	irdai.gov.in

IRDAI Headquarters

IRDAI’s headquarters are located in Hyderabad, Telangana. It was in Delhi earlier. In 2001, it relocated to Hyderabad.

Also Check: IG Full FORM

History of IRDAI

Insurance in India has a long history. It was mentioned in old documents. These documents talked about pooling money to help people after floods, fires, epidemics, and famines.

Life insurance in India started in 1818. The first company was the Oriental Life Insurance Company in Calcutta. This company closed in 1834. In 1829, Madras Equitable started life insurance in the Madras region.

The British Insurance Act came in 1870. After this, many companies were formed. Bombay Mutual was started in 1871. Oriental started in 1874. The Empire of India began in 1897. These companies were in Bombay. British companies ruled the insurance business at that time.

In 1912, the Indian Life Assurance Companies Act was enacted. This was the first law to control life insurance in India.

In 1928, the Indian Insurance Companies Act was enacted. It helped the government collect data on life and non-life insurance. This included both Indian and foreign companies. In 1938, the Insurance Act was passed. It brought all laws together. It gave strict rules to control insurance companies.

In 1950, the Insurance Amendment Act came into effect. This Act removed principal agencies. There was too much competition. Many companies followed unfair trade practices. The government decided to nationalise insurance.

On 19 January 1956, the government passed an ordinance. This nationalised life insurance. The LIC (Life Insurance Corporation of India) was formed. LIC took over 154 Indian companies, 16 foreign companies, and 75 provident societies. LIC ruled the market until the 1990s.

General insurance came to India during British rule. During the Industrial Revolution, it began with sea trade. Triton Insurance Company was the first insurance company. It was established in 1850 in Calcutta.

Also Check: IFB Full Form

In 1907, Indian Mercantile Insurance was started. It was the first Indian company to cover all types of general insurance. The General Insurance Council was established in 1957. It was part of the Insurance Association of India. It set rules for fair business.

In 1972, the General Insurance Business (Nationalization) Act was enacted. On 1 January 1973, general insurance was nationalised. 107 insurers were merged into four companies. These were National Insurance, New India Assurance, Oriental Insurance, and United India Insurance.

In 1971, the General Insurance Corporation of India (GIC) was established. Work began on January 1st, 1973.

Reforms began in the early 1990s. In 1993, the government formed a committee. R. N. Malhotra, former RBI Governor, led this committee. It gave its report in 1994. It suggested allowing private companies into the insurance sector. It also suggested foreign companies could enter as joint ventures.

In 1999, the IRDA was formed. It was made to regulate and develop the insurance sector. It started work in April 2000.

The IRDA promoted competition. It wanted to give customers more choices. It wanted to lower insurance prices. It also ensured the financial safety of the insurance sector.

In August 2000, IRDA opened the market. It invited companies to apply for licences. Foreign companies were allowed to hold 26 percent shares. IRDA made many rules to protect policyholders.

In December 2000, GIC’s four subsidiaries became separate companies. In 2002, Parliament passed a law to separate them fully. GIC became India’s national reinsurer.

Now, there are 28 general insurance companies in India. These include the Export Credit Guarantee Corporation and the Agriculture Insurance Corporation. There are 24 life insurance companies.

Insurance and banking together add about 7 percent to India’s GDP.

Also Check: IPS Full Form

In 2013, IRDAI tried to increase foreign direct investment (FDI) from 26 percent to 49 percent. In 2021, the FDI limit was raised to 74%.

Structure of IRDAI

Section 4 of the IRDAI Act, 1999, talks about the composition of the authority. IRDAI is a ten-member body. It has a chairman. It also has five full-time members. There are four part-time members. All members are appointed by the Govt. of India. The chairman of IRDAI is Mr. Debasish Panda. The full-time members are Mrs. T.L. Alamelu, Mrs. Pournima Gupte, Mr. K. Ganesh, Mr. Praveen Kutumbe, & Mr. Sujay Banarji.

Functions of IRDAI

The functions of IRDAI are given in Section 14 of the IRDAI Act, 1999. IRDAI issues, renews, modifies, withdraws, suspends, or cancels registrations of insurance companies.

• It protects the interests of policyholders.
• It sets qualifications, training, and the code of conduct for insurance agents and intermediaries.
• It also creates the standards of behavior for loss assessors and surveyors.
• IRDAI works to make the insurance industry more efficient.
• It supports and oversees insurance and reinsurance-related professional associations.
• It collects fees and other charges from companies.
• IRDAI can inspect and investigate insurers and intermediaries.
• It regulates rates, benefits, terms, and conditions of insurance policies not covered by the Tariff Advisory Committee.
• It specifies how books of accounts should be maintained.
• It regulates how insurance companies invest their funds.
• It also regulates the margin of solvency.
• IRDAI settles disputes between insurers and intermediaries.
• It oversees the Tariff Advisory Committee’s operations.
• It specifies how much of the premium income should be used to promote professional organisations.
• It also specifies the percentage of business insurers that must do in the rural or social sectors.
• It lays down the rules on how books of accounts should be kept and how statements should be submitted.

Also Check: UTI Full Form

Insurance Repository System

The Prime Minister of India announced the insurance repository system. This system helps policyholders keep their insurance policies in electronic form. They do not need to keep paper copies anymore. Insurance repositories work like share depositories or mutual fund transfer agencies.

These repositories store electronic records of insurance policies. The policies are called electronic policies or e-policies. This system makes it easy to buy, store, and manage insurance policies.

IRDAI’s Obligation under the RTI Act

The IRDAI is a public authority. It is defined as a public authority under the Right to Information Act, 2005. As a public authority, IRDAI must provide information to the public. It is required to share information according to the rules of the RTI Act. IRDAI ensures transparency by giving access to information as per the law.

Also Check: EMF Full Form

Open House at IRDAI

IRDAI will conduct an Open House for InsurTech and FinTech companies. This Open House is planned tentatively on the 15th of every month. The aim is to promote dialogue and encourage new technology in the insurance sector.

The main goal is to invite ideas and suggestions from InsurTech and FinTech firms. These ideas should help improve insurance-related activities. Such solutions will help insurance companies serve policyholders better. They will also help improve the customer experience.

Another goal is to increase insurance penetration across India. These innovative solutions will help more people get access to insurance. IRDAI invites InsurTech and FinTech companies to join this Open House. This is a great chance to showcase their new technology and innovations. Interested companies can contact IRDAI at insurtech-mission@irdai.gov.in.

Also Check: TRF Full Form

FAQs on IRDA Full Form