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IRDAI New Regulation

Facts for Prelims (FFP)

 

Source: IRDAI

 Context: The Insurance Regulatory and Development Authority of India (IRDAI) exercising powers under the Insurance Act, 1938 and IRDA Act, 1999, has framed regulations (IRDAI (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations, 2024) consolidating 8 separate regulations into a unified framework.

The main objective: It is to protect the interests of policyholders and ensure insurers and distribution channels fulfil their obligations.

Key measures include A 30-day free-look period for policy returns, compulsory nominee information collection for life insurance, electronic policy offerings with data privacy safeguards, prevention of mis-selling and unfair practices, and establishment of grievance redressal systems in insurer offices.

 

About IRDAI:

IRDAI (HQ: Hyderabad; est 1999), safeguards insurance customers’ interests as a statutory body under the IRDA Act 1999. It operates under the Ministry of Finance, overseeing and developing the insurance industry. Its powers and functions are defined by the IRDAI Act, 1999 and Insurance Act, 1938.

IRDAI’s “Vision Insurance for All” initiative aims for comprehensive coverage by 2047, allocating states and union territories to insurers for increased penetration. In 2023, IRDAI plans to launch “Bima Trinity” – Bima Sugam, Bima Vistar, Bima Vaahaks – with insurers to streamline insurance activities.

 

About the Insurance Sector in India:

India has a low insurance penetration at 4.2% and an insurance density of $91 in 2021 (from USD 11 in 2001). India’s insurance market is forecasted to become one of the fastest-growing globally in the next decade, as per the Economic Survey. In 2023, India ranked as the 10th largest insurance market globally and is projected to climb to the 6th position by 2032.