Friday, April 13, 2012

Insurance Regulatory and Development Authority (IRDA)

IRDA - Insurance Regulatory & Development Authority of India is the National Agency that governs and supervises the Insurance Sector in India. Remember the article on the stock market regulator SEBI? What SEBI is to the Stock Markets, IRDA is to the Insurance industry. The purpose of this article is to learn more about this Agency.

Establishment of Insurance Regulatory and Development Authority - IRDA

The Insurance Regulatory and Development Authority (IRDA) was formed by an act of Indian Parliament known as IRDA Act 1999. The purpose of setting up the agency, as stated in the Parliament is

1. To Protect the interests of Insurance Policy holders
2. To Regulate, Promote and Ensure orderly growth of the Insurance Industry

The Act was amended in the year 2002 to incorporate some additional regulations to further protect the interests of the Indian Citizens.

Does IRDA Govern Unit Linked Insurance Plans?

A lot of people think that Unit Linked Insurance Plans (ULIPs) are Governed by the Securities & Exchange Board of India (SEBI) because they invest in the Stock Market. Well, if you thought so too, you are incorrect.

SEBI was governing all ULIPs until 2010. But, in 2010, the Government of India ruled that Unit Linked Insurance Plans (ULIPs) are basically Insurance Products that provide an Investment advantage and hence will be governed by IRDA and not SEBI.

So, the Answer is - YES. IRDA Governs ULIPs

Chairman of the Insurance Regulatory and Development Authority (IRDA)

Mr. J Hari Narayanan is the current Chairman of the Insurance Regulatory and Development Authority of India. He has been the Chairman since June 2008.

Note: As of April 2012.

Purpose of Insurance Regulatory and Development Authority - IRDA

As outlined in the previous paragraph, the summary purpose of the IRDA is to protect the customer interest and to regulate the Insurance Sector in India. The following are the detailed purposes of the IRDA:

1. To Protect the Interest of all Insurance Policy Holders
2. To Ensure a Fair Treatment of all Insurance Policy Holders
3. To Enable the speedy and orderly growth of the insurance industry
4. To Set and Enforce Standards like Integrity, Fair Dealing etc in the Insurance Industry
5. To Ensure that insurance customers receive precise, clear and correct information about products and services sold by Insurance Co's
6. To Ensure Speedy Settlement of Insurance Claims
7. To Prevent Insurance Frauds and other Malpractices
8. To Serve as the Grievance Redressal Body for all Insurance Related Grievances

How The Insurance Regulatory and Development Authority (IRDA) Serves its Purpose

The Purposes elaborated above seem all nice and good. But, how does the Insurance Regulatory and Development Authority of India ensure that it serves its purpose? They do it by doing the following activities:

1. They Set the Rules & Regulations that all Insurance Providers in India must follow. If an Insurance Co does not adhere to all these Rules & Regulations, they will not receive the Registration which is mandatory to conduct Insurance Business in India
2. Set Basic Guidelines on Settlement of Claims, Insurance Premium, Insured Amounts, Surrender Value etc
3. Set the Basic Terms & Conditions (Contracts) of Insurance
4. Set the Qualifications & Code of Conduct for all Insurance Agents
5. Set the Code of Conduct for all Surveyors & Loss Assessors
6. Conduct Enquiries and Investigations including Auditing on all Insurance Providers, Intermediaries and Agents in the Business
7. Set the Form & Manner in which Books of Accounts will be maintained by the Insurance Co's
8. Regulating the Investment of Funds by the Insurance Co's
9. Setting Guidelines on Margin Requirements for the Insurance Co's and ensuring that they adhere to it
10. Setting Guidelines on the Fee's and other Charges that Insurance Co's can levy on the customers

The list os very long. I have just outlined the key activities of the IRDA.

Address of IRDA Head Office:

Insurance Regulatory and Development Authority
3rd Floor, Parisrama Bhavan, Basheer Bagh HYDERABAD 500 004
Andhra Pradesh (INDIA )

Ph: (040) 23381100
Fax: (040) 6682 3334

Grievance Redressal

The IRDA has set up the Integrated Grievance Management System (IGMS) to help the Policy Holders. Policy holders can Register Complaints with their respective Insurance Co's and if they do not receive a Satisfactory response, they can escalate the issue to the IRDA Grievance Cells. If you have a dispute in which the Insurance Co is being non-cooperative, you can raise your grievance to the IRDA Grievance Call Centre (IGCC)

IRDA Grievance Call Centre (IGCC) can be accessed through
A toll free number 155255 for voice calls
Email -
Address for communication for complaints by paper/fax:

Consumer affairs Department
Insurance Regulatory and Development Authority
9th Floor, United Towers,
Basheer bagh,
Hyderabad -500 029
Fax 91 – 40 - 66789768

How IRDA's Integrated Grievance Management System (IGMS) Works?

1. Policy holder needs to login in to and create a profile for registering a complaint.
2. Once the policy holder registers in to IGMS then details of complaint are passed on to respective insurance companies.
3. Policy holder can see the details of the branch offices of the insurance company while registering the complaint.
4. Policy holder receives the confirmation email after registering the complaint along with IRDA token no which will be used by IRDA and Insurance Company for tracking of the complaint through IGMS. A complaint registered through IGMS flows to the insurer’s system as well as the IRDA repository.
5. If the complainant is not satisfied with the resolution provided by Insurer, he/she can escalate the complaint for a review by IRDA for a potential violation of Regulations.
6. All the transactions between the Insurer, Insured and Remarks by IRDA are visible to the complainant.

Source: IRDA Website -


  1. sir,
    i have a taken a home loan with SBI and a home insurance is required by them.
    SBI wants me to purchase the home insurance from their concern..can SBI force me to buy a insurance of their choice ? also, does home insurance falls under non-life insurance category?

    1. Anonymous - What do you mean by home insurance? Home insurance protects your house from natural calamities, theft, fire etc.

      Usually they force home loan customers to take life insurance that is worth the amount of the home loan. I guess you are referring to the same. If this is what you are referring to - then yes, it is a good idea to take it. In case of an unfortunate event in the home loan customers life, SBI will surrender the policy and get money from the insurance company and the family members can still live in the house instead of having to sell the house.



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