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INTRODUCTION In order to provide better insurance coverage to citizens and also to augment the flow of long-term resources for financing infrastructure, the Government of India opened the insurance sector to foreign and Indian companies. Insurance Regulatory and Development Authority Act, 1999 was passed. A statutory body is set up to monitor the working of insurance companies. The Act contains 32 sections and three schedules. The schedules contain amendments made in Insurance Act, 1938, Life Insurance Corporation Act, 1956 and General Insurance Business (Nationalization) Act, 1972. The Insurance Regulatory and Development Authority is a body corporate by the name having perpetual succession and a common seal with power, subject to the provisions of the Act, to acquire, hold and dispose of property, both movable and immovable, and to contract and shall, by the said name, sue or be sued. The Insurance Regulatory and Development Authority (IRDA) is a national agency of the Government of India based in Hydrabad. It was formed by an act of Indian Parliament known as IRDA Act 1999, which was amended in 2002 to incorporate some emerging requirements. Mission of IRDA as stated in the act is "to protect the interests of the policyholders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto."

Insurance Regulatory & Development Authority

The IRDA Act, 1999 The IRDA Act was passed in 1999, providing for the establishment of the IRDA as a ten member body, with the Chairperson, and nine other members, of whom not more than five will be whole time members. The IRDA is the Authority to regulate the insurance industry in India and has the powers to issue registration certificates and licences, lay down codes of conduct and monitor the performance of insurers and other persons referred to in the Insurance Act and to make regulations to carry out its purposes. The IRDA is to be advised by the Insurance Advisory Committee, to consist of not more than 25 members. This Committee is to be appointed by the IRDA and will represent the interests of commerce, industry, transport, agriculture, consumer for a, surveyors, agents, intermediaries, organizations engaged in safety and loss prevention, research bodies and employees associations in the insurance sector. The IRDA Act, also amended the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the General Insurance Business (Nationalisation) Act, 1972. These amendments were made to give effect to the new policy of allowing private insurance companies to transact business in India.

Insurance Regulatory & Development Authority

COMPOSITION OF AUTHORITY As per the section 4 of IRDA Act' 1999, Insurance Regulatory and Development Authority (IRDA, which was constituted by an act of parliament) specify the composition of Authority The Authority is a ten member team consisting of: (a) (b) (c) a Chairman; not more than five whole-time members; not more than four part-time members,

Tenure of Office of Chairperson and Other Members The Chairperson and every other whole-time member shall hold office for a term of five years from the date on which he enters upon his office and shall be eligible for reappointment: Provided that no person shall hold office as a Chairperson after he has attained the age of sixty-five years. Provided further that no person shall hold office as a whole-time member after he has attained the age of sixty-two years. As part-time member shall hold office for a term not exceeding five years from the date on which he enters upon his office. Removal from Office 1. The Central Government may remove from office any member who-

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Is, or at any time has been, adjudged as an insolven; or Has become physically or mentally incapable of acting as a member; or Has been convicted of any offence which, in the opinion of the Central Government, involves moral turpitude; or Has acquired such financial or other interest as is likely to affect prejudicially his functions as a member; or Has so abused his position as to render his continuation in office detrimental to the public interest. 2. No such member shall be removed under clause (d) or clause (e) of subsection (1) unless he has been given a reasonable opportunity of being heard in the matter. Salary and Allowances of Chairperson and Members 1. The salary and allowances payable to, and other terms and conditions of service of, the members other than part-time members shall be such as may be prescribed. 2. The part-time members shall receive such allowances as may be prescribed. 3. The salary,allowances and other conditions of service of a member shall not be varied to his disadvantage after appointment.

Insurance Regulatory & Development Authority

Bar on Future Employment of Members The Chairperson and the whole-time members shall not, for a period of two years from the date on which they cease to hold office as such, except with the previous approval of the central Government, accep any employment either under the Central Government or under any State Government; or any appointment in any company in the insurance sector. Administrative Powers of Chairperson The Chairperson shall have the powers of general superintendence and direction in respect of all administrative matters of the Authority. Meeting of Authority The Authority shall meet at such times and places, and shall observe such rules and procedures in regard to transaction of business at its meetings (including quorum at such meetings) as may be determined by regulations. The Chairperson, or, if for any reason he is unable to attend a meeting of the Authority, any other member chosen by the members present from amongst themselves at the meeting, shall preside at the meeting. All questions which come up before any meeting of the Authority shall be decided by a majority of votes by the members present and voting,

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and in the event of an equality of votes, the Chairperson, or in his absence, the person presiding shall have a second or casting vote. The Authority may make regulations for the transaction of business at its meetings. Officers and Employees of Authority The Authority may appoint officers and such other employees as it considers necessary for the efficient discharge of its functions under this Act. The terms and other conditions of service of officers and other employees of the Authority appointed shall be governed by regulations made under this Act.

Insurance Regulatory & Development Authority

EXPECTATIONS/OBJECTIVES The law of India has following expectations from IRDA: 1. To protect the interest of and secure fair treatment to policyholders; 2. To bring about speedy and orderly growth of the insurance industry (including annuity and superannuation payments), for the benefit of the common man, and to provide long term funds for accelerating growth of the economy; 3. To set, promote, monitor and enforce high standards of integrity, financial soundness, fair dealing and competence of those it regulates; 4. To ensure that insurance customers receive precise, clear and correct information about products and services and make them aware of their responsibilities and duties in this regard; 5. To ensure speedy settlement of genuine claims, to prevent insurance frauds and other malpractices and put in place effective grievance redressal machinery; 6. To promote fairness, transparency and orderly conduct in financial markets dealing with insurance and build a reliable management information
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system to enforce high standards of financial soundness amongst market players; 7. To take action where such standards are inadequate or ineffectively enforced; 8. To bring about optimum amount of self-regulation in day to day working of the industry consistent with the requirements of prudential regulation.

DUTIES, POWERS & FUNCTIONS OF IRDA Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA as follows: (1) Subject to the provisions of this Act and any other law for the time being in force, the Authority shall have the duty to regulate, promote and ensure orderly growth of the insurance business and re-insurance business. (2) Without prejudice to the generality of the provisions contained in subsection (1), the powers and functions of the Authority shall include, (a) issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration; (b) protection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance;

Insurance Regulatory & Development Authority

(c) specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents; (d) specifying the code of conduct for surveyors and loss assessors; (e) promoting efficiency in the conduct of insurance business; (f) promoting and regulating professional organisations connected with the insurance and re-insurance business; (g) levying fees and other charges for carrying out the purposes of this Act; (h) calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organisations connected with the insurance business; (i) control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938); (j) specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries; (k) regulating investment of funds by insurance companies; (l) regulating maintenance of margin of solvency;

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(m) adjudication of disputes between insurers and intermediaries or insurance intermediaries; (n) supervising the functioning of the Tariff Advisory Committee; (o) specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organisations referred to in clause (f); (p) specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector; and (q) exercising such other powers as may be prescribed.

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INSURANCE BUSINESS OVERVIEW Insurance business is divided into four classes : 1) Life Insurance 2) Fire Insurance 3) Marine Insurance and 4) Miscellaneous Insurance. Life Insurers transact life insurance business; General Insurers transact the rest. INSURANCE PRODUCTS Life Insurance: Popular Products: Endowment Assurance (Participating), and Money Back (Participating). More than 80% of the life insurance business is from these products. General Insurance: Fire and Miscellaneous insurance businesses are predominant. Motor Vehicle insurance is compulsory.
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Tariff Advisory Committee (TAC) lays down tariff rates for some of the general insurance products (please visit website of GIC for details )

Indian Insurance Industry INSURERS Insurance industry, as on 1.4.2000, comprised mainly two players: the state insurers: Life Insurers:

Life Insurance Corporation of India (LIC)

General Insurers:

General Insurance Corporation of India (GIC) (with effect from Dec'2000, a National Reinsurer)

GIC had four subsidiary companies, namely (with effect from Dec'2000, these subsidiaries have been de-linked from the parent company and made as independent insurance companies.

The Oriental Insurance Company Limited The New India Assurance Company Limited National Insurance Company Limited United India Insurance Company Limited.

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REGULATIONS OF IRDA There are around 37 regulations issued by IRDA. From these regulations following are some important regulations of IRDA which are explained in detailed. 1. Obligations of Insurers to Rural or Social Sectors Regulations, 2008. (Fourth Amendment) 2. Life Insurance Reinsurance Regulation, 2000. 3. General Insurance Reinsurance Regulation, 2000. 4. Protection of Policy Holders Interest, 2002 (Amendment) 5. Licensing of Insurance Agent Regulation, 2000. 6. Licensing of Corporate Agent Regulation, 2002. 7. Meetings Regulation, 2000. 8. Registration of Indian Insurance Companies Regulations, 2003. (Amendment)

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY, (Obligations of Insurers to Rural or Social Sectors) (Fourth Amendment) Regulations,2008

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F.No.IRDA/Reg./2/43/2008In exercise of the powers conferred by section 32C read with section 32B of the Insurance Act, 1938, (4 of 1938), the Authority, in consultation with the Insurance Advisory Committee, hereby makes the following regulations 1. Short title and commencement: (1) These regulations may be called the Insurance Regulatory and Development Authority (Obligations of Insurers to Rural or Social Sectors) Regulations, 2008. (2) They shall come into force from the date of their publication in the Official Gazette. (3) In the Insurance Regulatory and Development Authority (Obligations of Insurers to Rural or Social Sectors) Regulations, 2002, The first provison to Regulation 3 shall e deleted and replaced to read as under: Provided that in cases where an insurance company commences operations in the second half of the financial year and is in operations for less than six months as at 31st March of the relevant financial year, (i) no rural or social sector obligations shall be applicable for the said period, and (ii) the annual obligations as indicated in the Regulations shall be reckoned from the next financial year which shall be considered as the first year of operations for the purpose of compliances. In cases where an insurance company commences
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operations in the first half of the financial year, the applicable obligations for the first year shall be 50 per cent of the obligations as specified in these Regulations. 2. Definitions: In these regulations, unless the context otherwise requires a. Act means the Insurance Act, 1938 (4 of 1938); b. Authority means the Insurance Regulatory and Development Authority established under the provisions of section 3 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999); c. Rural sector shall mean any place as per the latest census which has, i. ii. iii. a population of not more than five thousand; a density of population of not more than four hundred per square kilometre; and At least seventy five per cent of the male working population is engaged in agriculture. d. Social sector includes unorganised sector, informal sector, economically vulnerable or backward classes and other categories of persons, both in rural and urban areas; e. Unorganised sector includes self-employed workers such as agricultural labourers, bidi workers, brick kiln workers, carpenters, cobblers, construction workers, fishermen, hamals, handicraft artisans, handloom and khadi workers, lady tailors, leather and tannery
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workers, papad makers, powerloom workers, physically handicapped self-employed persons, primary milk producers, rickshaw pullers, safai karmacharis, salt growers, seri culture workers, sugarcane cutters, tendu leaf collectors, toddy tappers, vegetable vendors, washerwomen, working women in hills, or such other categories of persons., f. economically vulnerable or backward classes means persons who live below the poverty line; g. other categories of persons includes persons with disability as defined in the Persons with Disabilities (Equal Opportunities, Protection of Rights, and Full Participation) Act, 1995 and who may not be gainfully employed; and also includes guardians who need insurance to protect spastic persons or persons with disability; h. All words and expressions used herein and not defined herein but defined in the Insurance Act, 1938 (4 of 1938), or in the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999), shall have the meanings respectively assigned to them in those Acts. 3. Obligations: Every insurer, who begins to carry on insurance business after the commencement of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999), shall, for the purposes of sections 32B and 32C of the Act, ensure that he undertakes the following obligations, during the first five financial years, pertaining to the persons in (a) Rural sector,

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(i) In respect of a life insurer,


Ten per cent in the first financial year; Seven per cent in the second financial year; Ten per cent in the third financial year; Twelve per cent in the fourth financial year; Fifteen per cent in the fifth year, of total policies written direct in that year; (ii) In respect of a general insurer,

Two per cent in the first financial year; Three per cent in the second financial year; Five per cent thereafter, of total gross premium income written direct in that year.

(b) Social sector, in respect of all insurers,


Five thousand lives in the first financial year; Seven thousand five hundred lives in the second financial year; Ten thousand lives in the third financial year; Fifteen thousand lives in the fourth financial year; Twenty thousand lives in the fifth year;

Provided that in the first financial year, where the period of operation is less than twelve months, proportionate percentage or number of lives, as the case may be, shall be undertaken. Provided further that, in case of a general insurer, the obligations specified shall include insurance for crops.
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Provided further that the Authority may normally, once in every five years, prescribe or revise the obligations as specified in Regulation 3. 4. Obligations of existing insurers: (1) The obligations of existing insurers as on the date of

commencement of IRDA Act shall be decided by the Authority after consultation with them and the quantum of insurance business to be done shall not be less than what has been recorded by them for the accounting year ended 31st March, 2000. (2) The Authority shall review such quantum of insurance business periodically and give directions to the insurers for achieving the specified targets.

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (Life Insurance Reinsurance) Regulations, 2000 File No. IRDA/REG/12/2000: In exercise of the powers conferred by section 114A of the Insurance Act, 1938, sections 14 and 26 of the Insurance Regulatory and Development Authority Act, 1999, the Authority, in consultation with the Insurance Advisory Committee hereby makes the following regulations, namely:

1. Short title and commencement:


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1. These regulations may be called the Insurance Regulatory and Development Authority (Life Insurance - Reinsurance) Regulations, 2000. 2. They shall come into force on the date of their notification in the Official Gazette.

2. Definitions: In these regulations, unless the context otherwise requires: a. Act means the Insurance Act 1938 (4 of 1938); b. Authority means the Insurance Regulatory and Development Authority established under sub-section (1) of Section 3 of the Insurance Regulatory and Development Authority Act 1999 (41 of 1999); c. Retention means the amount of risk which an insurer assumes for his own account. d. Words and expressions used and not defined in these regulations but defined in the Insurance Act, 1938 (4 of 1938) or Insurance Regulatory and Development Authority Act, 1999 (41 of 1999), shall have the meanings respectively assigned to them in those Acts as the case may be.

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Procedure to be followed for reinsurance arrangements:


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1. Every life insurer shall draw up a programme of reinsurance in respect of lives covered by them. The profile of such a programme, duly certified by the Appointed Actuary, which shall include the name(s) of the reinsurer(s) with whom the insurer proposes to place business, shall be filed with the Authority, at least forty five days before the commencement of each financial year, by the insurer. Provided that the Authority may, if it considers necessary, elicit from the insurer any additional information, from time to time, and the insurer shall furnish the same to the Authority forthwith. 3. The Authority shall scrutinize such a programme of reinsurance as referred to in sub-regulation (2), and may suggest changes, if it consider necessary, and the insurer shall incorporate such changes forthwith in his programme. 4. Every insurer shall retain the maximum premium earned in India commensurate with his financial strength and volume of business. 5. The reinsurer, chosen by the insurer, shall enjoy a credit rating of a minimum of BBB of Standard and Poor or equivalent rating of any international rating agency: Provided that placement of business by the insurer with any other reinsurer shall be with the prior approval of the Authority. Provided further that no programme of reinsurance shall be on original premium basis unless the Authority approves such programme. Provided further that no life insurer shall have reinsurance treaty arrangement with its promoter company or its associate/group company,

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except on terms which are commercially competitive in the market and with the prior approval of the Authority, which shall be final and binding. 6. Every insurer shall submit to the Authority statistics relating to its reinsurance transactions in such forms as it may specify, together with its annual accounts.

4. Inward Reinsurance Business: 1. Every insurer who wants to write inward reinsurance business shall adopt a well-defined underwriting policy for underwriting inward reinsurance business. 2. An insurer shall ensure that decisions on acceptance of reinsurance business are made by persons with adequate knowledge and experience, preferably in consultation with the insurers appointed actuary. 3. An insurer shall file with the Authority, at least forty five days before the commencement of each financial year, a note on its underwriting policy indicating the classes of business, geographical scope, underwriting limits and profit objective. 4. An insurer shall also file any changes to the note referred to in subregulation (3) as and when a change in underwriting policy is made.

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INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (General Insurance - Reinsurance) Regulations, 2000 F.No.IRDA/Reg./7/2000: In exercise of the powers conferred by section 114A of the Insurance Act, 1938, sections 14 and 26 of the Insurance Regulatory and Development Authority Act, 1999, the Authority, in consultation with the Insurance Advisory Committee, hereby makes the following regulations, namely: 1. Short title and commencement : These regulations may be called the Insurance Regulatory and Development Authority (General Insurance Reinsurance) Regulations, 2000. They shall come into force on the date of their notification in the Official Gazette. 2. Procedures to be followed by Reinsurer Arrangements (1) The Reinsurance Programme shall continue to be guided by the

following objectives to: a. maximize retention within the country; b. develop adequate capacity; c. secure the best possible protection for the reinsurance costs incurred; d. Simplify the administration of business.
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2. Every insurer shall maintain the maximum possible retention commensurate with its financial strength and volume of business. The Authority may require an insurer to justify its retention policy and may give such directions as considered necessary in order to ensure that the Indian insurer is not merely fronting for a foreign insurer. 3. Every insurer shall cede such percentage of the sum assured on each policy for different classes of insurance written in India to the Indian reinsurer as may be specified by the Authority in accordance with the provisions of Part IVA of the Insurance Act, 1938. 4. The reinsurance programme of every insurer shall commence from the beginning of every financial year and every insurer shall submit to the Authority, his reinsurance programmes for the forthcoming year, 45 days before the commencement of the financial year; 5. Within 30 days of the commencement of the financial year, every insurer shall file with the Authority a photocopy of every reinsurance treaty slip and excess of loss cover covernote in respect of that year together with the list of reinsurers and their shares in the reinsurance arrangement; 6. The Authority may call for further information or explanations in respect of the reinsurance programme of an insurer and may issue such direction, as it considers necessary; 7. Insurers shall place their reinsurance business outside India with only those reinsurers who have over a period of the past five years counting from the year preceding for which the business has to be placed, enjoyed a rating of at least BBB (with Standard & Poor) or equivalent rating of any other international rating agency. Placements with other

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reinsurers shall require the approval of the Authority. Insurers may also place reinsurances with Lloyds syndicates taking care to limit placements with individual syndicates to such shares as are commensurate with the capacity of the syndicate. 8. The Indian Reinsurer shall organise domestic pools for reinsurance surpluses in fire, marine hull and other classes in consultation with all insurers on basis, limits and terms which are fair to all insurers and assist in maintaining the retention of business within India as close to the level achieved for the year 1999-2000 as possible. The arrangements so made shall be submitted to the Authority within three months of these regulations coming into force, for approval. 9. Surplus over and above the domestic reinsurance arrangements class wise can be placed by the insurer independently with any of the reinsurers complying with sub-regulation (7) subject to a limit of 10% of the total reinsurance premium ceded outside India being placed with any one reinsurer. Where it is necessary in respect of specialised insurance to cede a share exceeding such limit to any particular reinsurer, the insurer may seek the specific approval of the Authority giving reasons for such cession. 10.Every insurer shall offer an opportunity to other Indian insurers including the Indian Reinsurer to participate in its facultative and treaty surpluses before placement of such cessions outside India. 11.The Indian Reinsurer shall retrocede at least 50% of the obligatory cessions received by it to the ceding insurers after protecting the portfolio by suitable excess of loss covers. Such retrocession shall be at original terms plus an over-riding commission to the Indian

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Reinsurer not exceeding 2.5%. The retrocession to each ceding insurer shall be in proportion to its cessions to the Indian Reinsurer. 12.Every insurer shall be required to submit to the Authority statistics relating to its reinsurance transactions in such forms as the Authority may specify, together with its annual accounts.

3. Inward Reinsurance Business Every insurer wanting to write inward reinsurance business shall have a well-defined underwriting policy for underwriting inward reinsurance business. The insurer shall ensure that decisions on acceptance of reinsurance business are made by persons with necessary knowledge and experience. The insurer shall file with the Authority a note on its underwriting policy stating the classes of business, geographical scope, underwriting limits and profit objective. The insurer shall also file any changes to the note as and when a change in underwriting policy is made. 4. Outstanding Loss Provisioning (1) Every insurer shall make outstanding claims provisions for every reinsurance arrangement accepted on the basis of loss information advices received from Brokers/ Cedants and where such advices are not received, on an actuarial estimation basis. (2) In addition, every insurer shall make an appropriate provision for incurred but not reported (IBNR) claims on its reinsurance accepted portfolio on actuarial estimation basis.

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INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (Protection of Policyholders Interest) Regulation, 2002 [AMENDMENT] F. No. IRDA/Reg./ 10/2002: In exercise of the powers conferred by clause of sub-section (2) of section 114A of the Insurance Act, 1938 read with sections 14 and 26 of the Insurance Regulatory and Development Authority Act, 1999, the Authority, in consultation with the Insurance Advisory Committee, hereby makes the following regulations to amend the Insurance Regulatory and Development Authority (Protection of Policyholders Interests) Regulations, 2002, namely:-

1 Short title and commencement: 1. These regulations may be called the Insurance Regulatory and Development Authority (Protection of Policyholders Interests) (Amendment) Regulations, 2002. 2. They shall come into force on the date of their publication in the Official Gazette.

2. Definition: For the existing sub-regulation (1) of regulation 3 of the Insurance Regulatory and Development Authority (Protection of Policyholders Interests) Regulations, 2002 the following shall be substituted:-

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(1) Notwithstanding anything mentioned in regulation 2(e) above, a prospectus of any insurance product shall clearly state the scope of benefits, the extent of insurance cover and in an explicit manner explain the warranties, exceptions and conditions of the insurance cover and, in case of life insurance, whether the product is participating (with-profits) or non-participating (without-profits). The allowable rider or riders on the product shall be clearly spelt out with regard to their scope of benefits, and in no case, the premium relatable to health related or critical illness riders in case of term or group products shall exceed 100% of premium under the basic product. All other riders put together shall be subject to a ceiling of 30% of the premium of the basic product. Any benefit arising under each of the riders shall not exceed the sum assured under the basic product. Provided that the benefit amount under riders shall be subject to section 2(11) of the Insurance Act, 1938. Explanation: The rider or riders attached to a life policy shall bear the nature and character of the main policy, viz. participating or non-participating and accordingly the life insurer shall make provisions, etc., in its books.

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY, (Licensing of Insurance Agents) Regulations, 2000

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F.No.IRDA/Reg./7/2000: In exercise of the powers conferred by sub-section (6) of section 42 and clauses (k), (l), (m), (n), (o) and (p) of sub-section (2) of section 114A of the Insurance Act, 1938 (4 of 1938), the Authority, in consultation with the Insurance Advisory Committee, hereby makes the following regulations, namely:1. Short title and commencement: (1) These regulations may be called Insurance Regulatory and Development Authority (Licensing of Insurance Agents) Regulations, 2000. (2) They shall come into force on the date of their publication in the Official Gazette. 2. Issue or renewal of licence (1) A person desiring to obtain or renew a licence (hereinafter

referred to as the applicant to act as an insurance agent or a composite insurance agent shall proceed as follows:a. the applicant shall make an application to a designated person, i. ii. in Form IRDA-Agents-VA, if the applicant is an individual; in Form IRDA-Agents-VC, if the applicant is a firm or a company:

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Provided that the applicant, who desires to be a composite insurance agent, shall make two separate applications. (b) The fees payable by the applicant to the Authority shall be as specified in Regulation 7. (2) The designated person may, on receipt of the application along with the evidence of payment of fees to the Authority, and on being satisfied that the applicant, i. ii. iii. iv. v. vi. possesses the qualifications as specified under Regulation 4; possesses the practical training as specified under Regulation 5; has passed the examination as specified under Regulation 6; has furnished the application complete in all respects; has the requisite knowledge to solicit and procure insurance business; and is capable of providing the necessary service to the policyholders; Grant or renew, as the case may be, a licence in Form IRDA-Agents-VB, along with identity card in Form IRDA-Agents-VZ: Provided that in the case of a corporate agent, the identity card shall be in Form IRDA-Agent-VY. Provided further that such identity card from one life insurer and such identity card from one general insurer shall be provided to the applicant seeking licence to act as a composite insurance agent.

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Provided further that in the case of a firm or a company, all of its partners or directors, as the case may be, shall fulfil the requirements of sub-clauses (i) to (iii). Provided further a licence issued in accordance with this regulation shall entitle the applicant to act as insurance agent for one life insurer or one general insurer or both, as the case may be. (3) If the designated person refuses to grant or renew a licence under this regulation, he shall give the reasons there for to the applicant. 3. Qualifications of the applicant The applicant shall possess the minimum qualification of a pass in 12th Standard or equivalent examination conducted by any recognised Board/Institution, where the applicant resides in a place with a population of five thousand or more as per the last census, and a pass in 10th Standard or equivalent examination from a recognised Board/ Institution if the applicant resides in any other place. 4. Practical Training: (1) The applicant shall have completed from an approved institution, at least, one hundred hours practical training in life or general insurance business, as the case may be, which may be spread over three to four weeks, where such applicant is seeking licence for the first time to act as insurance agent. Provided that the applicant shall have completed from an approved institution, at least, one hundred fifty hours practical training in life and
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general insurance business, which may be spread over six to eight weeks, where such applicant is seeking licence for the first time to act as a composite insurance agent. (2) Where the applicant, referred to under sub-regulation (1), is a. an Associate/Fellow of the Insurance Institute of India, Mumbai; b. an Associate/Fellow of the Institute of Chartered Accountants of India, New Delhi; c. an Associate/Fellow of the Institute of Costs and Works Accountants of India, Calcutta; d. an Associate/Fellow of the Institute of Company Secretaries of India, New Delhi; e. an Associate/Fellow of the Actuarial Society of India, Mumbai; f. a Master of Business Administration of any Institution / University recognised by any State Government or the Central Government; or g. possessing any professional qualification in marketing from any Institution / University recognised by any State Government or the Central Government-He shall have completed, at least, fifty hours practical training from an approved institution. Provided that such applicant shall have completed from an approved institution, at least, seventy hours practical training in life and general insurance business, where such applicant is seeking licence for the first time to act as a composite insurance agent.

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(3)

An applicant, who has been granted a licence after the

commencement of these regulations, before seeking renewal of licence to act as an insurance agent, shall have completed, at least twenty-five hours practical training in life or general insurance business, as the case may be, from an approved institution. Provided that such applicant before seeking renewal of licence to act as a composite insurance agent shall have completed from an approved institution, at least, fifty hours practical training in life and general insurance business. 5. Examination: The Applicant shall have passed the pre-recruitment examination in life or general insurance business, or both, as the case may be, conducted by the Insurance Institute of India, Mumbai, or any other examination body. 6. Fees payable: (1) The fees payable to the Authority for issue or renewal of licence to act as insurance agent or a composite insurance agent shall be rupees two hundred and fifty. (2) The additional fees payable to the Authority, under the

circumstances mentioned in sub-section (3) of section 42 of the Act, shall be rupees one hundred. 7. Code of Conduct:

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1) Every person holding a licence shall adhere to the code of conduct specified below:i. Every insurance agent shall: a. identify himself and the insurance company of whom he is an insurance agent; b. disclose his licence to the prospect on demand; c. disseminate the requisite information in respect of insurance products offered for sale by his insurer and take into account the needs of the prospect while recommending a specific insurance plan; d. disclose the scales of commission in respect of the insurance product offered for sale, if asked by the prospect; e. indicate the premium to be charged by the insurer for the insurance product offered for sale; f. explain to the prospect the nature of information required in the proposal form by the insurer, and also the importance of disclosure of material information in the purchase of an insurance contract; g. bring to the notice of the insurer any adverse habits or income inconsistency of the prospect, in the form of a report (called Insurance Agents Confidential Report) along with every proposal submitted to the insurer, and any material fact that may adversely affect the underwriting decision of the insurer as regards acceptance of the proposal, by making all reasonable enquiries about the prospect; h. inform promptly the prospect about the acceptance or rejection of the proposal by the insurer;

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i. obtain the requisite documents at the time of filing the proposal form with the insurer; and other documents subsequently asked for by the insurer for completion of the proposal; j. render necessary assistance to the policyholders or claimants or beneficiaries in complying with the requirements for settlement of claims by the insurer; k. advise every individual policyholder to effect nomination or assignment or change of address or exercise of options, as the case may be, and offer necessary assistance in this behalf, wherever necessary; ii. No insurance agent shall, a. solicit or procure insurance business without holding a valid licence; b. induce the prospect to omit any material information in the proposal form; c. induce the prospect to submit wrong information in the proposal form or documents submitted to the insurer for acceptance of the proposal; d. behave in a discourteous manner with the prospect; e. interfere with any proposal introduced by any other insurance agent; f. offer different rates, advantages, terms and conditions other than those offered by his insurer; g. demand or receive a share of proceeds from the beneficiary under an insurance contract; h. force a policyholder to terminate the existing policy and to effect a new proposal from him within three years from the date of such termination;
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i. have, in case of a corporate agent, a portfolio of insurance business under which the premium is in excess of fifty percent of total premium procured, in any year, from one person (who is not an individual) or one organisation or one group of organisations; j. apply for fresh licence to act as an insurance agent, if his licence was earlier cancelled by the designated person, and a period of five years has not elapsed from the date of such cancellation; k. become or remain a director of any insurance company; (iii) Every insurance agent shall, with a view to conserve the insurance business already procured through him, make every attempt to ensure remittance of the premiums by the policyholders within the stipulated time, by giving notice to the policyholder orally and in writing;

8. Cancellation of licence: The designated person may cancel a licence of an insurance agent, if the insurance agent suffers, at any time during the currency of the licence, from any of the disqualifications mentioned in sub-section (4) of section 42 of the Act, and recover from him the licence and the identity card issued earlier. 9. Issue of duplicate licence: The Authority may issue a duplicate licence replace a licence lost, destroyed, or mutilated on payment a fee of rupees fifty. 10. Non-application to existing insurance agents:

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Nothing contained in Regulations 4 to 6 of these Regulations shall apply to the existing agents before the commencement of these Regulations.

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (Licensing of corporate Agents) Regulations, 2002 F. No. IRDA/Reg./ 10/2002: In exercise of the powers conferred by section 42 and section 42D and clauses (k), (l), (m), (n), (o) and (p) of sub-section (2) of section 114A of the Insurance Act, 1938 (4 of 1938), the Authority, in consultation with the Insurance Advisory Committee, hereby makes the following regulations namely:1. Short title and commencement: (1) These regulations may be called the Insurance Regulatory and Development Authority (Licensing of Corporate Agents) Regulations, 2002. (2) They shall come into force on the date of their publication in the Official Gazette. 2. Issue or renewal of licence: (1) A person desiring to obtain or renew a licence (hereinafter referred to as the applicant to act as a corporate agent or a composite corporate agent shall proceed as follows:Insurance Regulatory & Development Authority 36

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a. the applicant shall make an application to a designated person in Form IRDA-Corporate Agents-A-1: Provided that the applicant, who desires to be a composite corporate agent, shall make two such separate applications. (b) The fees payable by the applicant to the Authority shall be as specified in Regulation 7. (2) The designated person may, on receipt of the application along with the evidence of payment of fees to the Authority, and on being satisfied that the corporate insurance executive of the applicant:1. possesses the qualifications as specified under Regulation 4; 2. possesses the practical training as specified under Regulation 5; 3. has passed the examination as specified under Regulation 6; 4. has furnished an application complete in all respects; 5. has the requisite knowledge to solicit and procure insurance business; and 6. is capable of providing the necessary service to the policyholders;

Grant or renew, as the case may be, a licence in Form IRDA-Corporate Agents-L-1. Provided that the identity card shall be in Form IRDA- Corporate AgentsID-1.

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Provided that a licence issued in accordance with this regulation shall entitle the applicant to act as corporate insurance agent for one life insurer or one general insurer or both, as the case may be. Notwithstanding anything contained in the above, the Authority may refuse or reject, for reasons being recorded, an application if it feels that the grant of licence may be against public interest or when the application is from such a person or group of persons who is or are already engaged as insurance agents, brokers, etc. (3) The designated person shall grant or renew the licence within a period of 3 months from the date of application. (4) The designated person shall, if the consideration of the application is likely to get delayed, within 60 days of the receipt of the application inform the applicant the reasons for such a delay, and the likely time it would take to do so. (5) If the designated person refuses to grant or renew a licence under this regulation, he shall give the reasons thereof to the applicant. (6) An individual desiring to become a Specified Person of a

corporate agent/ composite corporate agent shall apply through the corporate agent/ composite corporate agent in Form IRDA-Corporate Agent-A-2 to the insurer. (7) The designated person of the insurer may, on receipt of such an application along with the evidence of payment of fees to the

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Authority, grant or renew, as the case may be, a certificate in Form IRDA-Corporate Agents-L-2: (8) The fees payable by the applicant to the Authority shall be as specified in Regulation 7. 3. Qualifications: (1) The applicant being a corporate agent shall ensure that depending upon the nature of the entity, the Partnership Deed, Memorandum of Association or any other document evidencing the constitution of the entity shall contain as one of its main objects soliciting or procuring insurance business as a Corporate Agent. (2) The corporate insurance executive shall possess the minimum qualification of a pass in 12th Standard or equivalent examination conducted by any recognised Board/Institution, where the applicant resides in a place with a population of five thousand or more as per the last census, and a pass in 10th Standard or equivalent examination from a recognised Board/ Institution if the applicant resides in any other place. (3) A specified person shall possess the minimum qualifications stipulated in sub-regulation (2) above. (4) Every corporate insurance executive and each of the specified persons shall also not suffer from any of the disqualifications specified under Section 42D of the Act. 4. Practical Training:
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Where an applicant is seeking licence for the first time to act as a corporate agent, a corporate insurance executive of such an applicant shall have completed from an approved institution, at least, one hundred hours practical training which may be spread over three to four weeks, in either life or general insurance business, as the case may be. Provided that the corporate insurance executive of the applicant shall have completed from an approved institution, at least, one hundred fifty hours practical training which may be spread over six to eight weeks both in life and general insurance business, where such an applicant is seeking licence for the first time to act as a composite corporate agent. Where the corporate insurance executive of the applicant, referred to under sub-regulation (1), is: a. an Associate/Fellow of the Insurance Institute of India, Mumbai; b. an Associate/Fellow of the Institute of Chartered Accountants of India, New Delhi; c. an Associate/Fellow of the Institute of Costs and Works Accountants of India, Calcutta; d. an Associate/Fellow of the Institute of Company Secretaries of India, New Delhi; e. an Associate/Fellow of the Actuarial Society of India, Mumbai; f. a Master of Business Administration of any Institution/ University recognised by any State Government or the Central Government; or g. possessing Certified Associate ship of Indian Institute of Bankers (CAIIB); or

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h. Possessing any professional qualification in marketing from any Institution/ University recognised by any State Government or the Central Government. He shall have completed, at least, fifty hours practical training from an approved institution. Provided that such corporate insurance executive of the applicant shall have completed from an approved institution, at least, seventy hours practical training in life and general insurance business, where such applicant is seeking licence for the first time to act as a composite corporate agent. (3) A Specified Person shall undergo a practical training of not less than 100 hours in life or general insurance business, as the case may be, from an approved institution. In case of training in both life and general insurance, the duration of practical training shall be not less than 150 hours. However, if he falls within one of the categories as given in sub-regulation (2) above, he shall have completed fifty hours from an approved institution. Provided that such a specified person of the corporate agent shall have completed from an approved institution, at least, seventy hours practical training in life and general insurance business, where such specified person of the corporate agent is seeking certificate for the first time which will enable him to procure both life and general insurance business. 5. Examination:

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(1) The corporate insurance executive of the applicant or a specified person shall have passed the pre-recruitment examination in life or general insurance business, or both, as the case may be, conducted by the Insurance Institute of India, Mumbai, or any other examination body duly recognised by the Authority. 2) The examining body shall issue a certificate to every successful specified person, which shall enable him to procure insurance business on behalf of the corporate agent he is working for. 6. Fees payable: (1) The fees payable to the Authority for issue or renewal of licence to act as a corporate agent shall be rupees two hundred and fifty. (2) Every specified person of the corporate agent shall, apply through the corporate agent to the designated person of the insurer to obtain the certificate, accompanied by a fees of rupees five hundred remitted to the Authority.

7. Remuneration: 1) Every Corporate Agent shall be paid a commission as per provisions of Section 40 A of the Act. 2) Every specified person shall be an employee of the corporate agent.

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8. Code of Conduct: 1) Every Licensed Corporate Agent shall abide by the code of conduct specified below. Every corporate agent shall: a. be responsible for all acts of omission and commission of its corporate insurance executive and every specified person; b. ensure that the corporate insurance executive and all specified persons are properly trained, skilled and knowledgeable in the insurance products they market; c. ensure that the corporate insurance executive and the specified person do not make to the prospect any misrepresentation on policy benefits and returns available under the policy; d. ensure that no prospect is forced to buy an insurance product; e. give adequate pre-sales and post-sales advice to the insured in respect of the insurance product; f. extend all possible help and cooperation to an insured in completion of all formalities and documentation in the event of a claim; g. give due publicity to the fact that the corporate agent does not underwrite the risk or act as an insurer, h. Enter into service level agreements with the insurer in which the duties and responsibilities of both are defined.

2) Every corporate agent or a corporate insurance executive or a specified person shall also follow the code of conduct specified

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below. Every corporate agent / corporate insurance executive / specified person shall, a. identify himself and the insurance company of whom he is a representative; b. disclose his licence/ certificate to the prospect on demand; c. disseminate the requisite information in respect of insurance products offered for sale by his insurer and take into account the needs of the prospect while recommending a specific insurance plan; d. disclose the scales of commission in respect of the insurance product offered for sale, if asked by the prospect; e. indicate the premium to be charged by the insurer for the insurance product offered for sale; f. explain to the prospect the nature of information required in the proposal form by the insurer, and also the importance of disclosure of material information in the purchase of an insurance contract; g. bring to the notice of the insurer any adverse habits or income inconsistency of the prospect, in the form of a report (called Insurance Agents Confidential Report along with every proposal submitted to the insurer, and any material fact that may adversely affect the underwriting decision of the insurer as regards acceptance of the proposal, by making all reasonable enquiries about the prospect; h. inform promptly the prospect about the acceptance or rejection of the proposal by the insurer;

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i. obtain the requisite documents at the time of filing the proposal form with the insurer; and other documents subsequently asked for by the insurer for completion of the proposal; j. render necessary assistance to the policyholders or claimants or beneficiaries in complying with the requirements for settlement of claims by the insurer; k. advise every individual policyholder to effect nomination or assignment or change of address or exercise of options, as the case may be, and offer necessary assistance in this behalf, wherever necessary;

3. No corporate agent/ corporate insurance executive/ specified person shall, a. solicit or procure insurance business without holding a valid licence/ certificate; b. induce the prospect to omit any material information in the proposal form; c. induce the prospect to submit wrong information in the proposal form or documents submitted to the insurer for acceptance of the proposal; d. behave in a discourteous manner with the prospect; e. interfere with any proposal introduced by any other specified person or any insurance intermediary; f. offer different rates, advantages, terms and conditions other than those offered by his insurer;

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g. demand or receive a share of proceeds from the beneficiary under an insurance contract; h. force a policyholder to terminate the existing policy and to effect a new proposal from him within three years from the date of such termination; i. No corporate agent shall have a portfolio of insurance business from one person or one organization or one group of organizations under which the premium is in excess of fifty percent of total premium procured in any year; j. apply for fresh licence to act as an insurance agent, if his licence was earlier cancelled by the designated person, and a period of five years has not elapsed from the date of such cancellation; k. become or remain a director of any insurance company;

4) Every corporate agent shall, with a view to conserve the insurance business already procured through him, make every attempt to ensure remittance of the premiums by the policyholders within the stipulated time, by giving notice to the policyholder orally and in writing. 5) No director of a company or a partner of a firm or the chief executive or a corporate insurance executive or a specified person shall hold similar position with another corporate agent of any other insurance company.

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9. Renewal of Licence: (1) Every licence granted by the Authority to a corporate agent or any renewal thereof, in terms of these regulations, shall remain in force for three years. (2) A licence granted to a corporate agent may be renewed for a further period of three years on submission of the application form along-with a renewal fee of rupees two hundred and fifty, at least thirty days prior to the date of expiry of the licence. (3) The additional fees payable to the Authority, under the

circumstances mentioned in sub-section (3) of section 42 of the Act, shall be rupees one hundred. (4) The Authority may, if it is satisfied that undue hardship would be caused otherwise, accept any application after the licence ceased to remain in force, on the payment by the applicant of a payment of rupees seven hundred and fifty as additional fee. (5) Every certificate granted to the specified person shall remain in force for a period of three years which can be renewed for a further period of three years on submission of an application form accompanied by fees of rupees one hundred, provided that the licence of the corporate agent continues to be valid. The application form along-with the fees shall be submitted at least thirty days prior to the date of expiry.

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(6) The specified person on his ceasing to be an employee of the corporate agent shall surrender his certificate to the designated person. If he desires to become an individual insurance agent then he shall follow the procedure as laid down in Insurance Regulatory and Development Authoritys (Licensing of Insurance Agents) Regulations, 2000. Such a person need not go through a further process of training and pass at the examination within the period of licence granted to them. (7) A specified person will also be governed by the provisions of subregulation (3) and (4) stated above. (8) Every corporate insurance executive or the specified person of the corporate agent shall have completed at least twenty-five hours practical training in life or general insurance business, as the case may be, from an approved institution, for the purposes of renewal of licence to the corporate agent and/or renewal of certificate to the specified person. Provided that such applicant before seeking renewal of licence or certificate to act as a composite insurance agent shall have completed from an approved institution, at least, fifty hours practical training in life and general insurance business.

10. Cancellation of licence/ certificate:

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The designated person may cancel a licence or a certificate of a corporate agent or a specified person, if such a corporate agent or the corporate insurance executive or the specified person suffers, at any time during the currency of the licence, from any of the disqualifications mentioned in sub-section (4) of section 42D of the Act and recover from him the licence or certificate granted to him. 11. Issue of duplicate licence: The Authority may on payment of a fee of rupees fifty issues a duplicate licence to replace a licence, which is lost, destroyed, or mutilated. 12. Non-application to existing insurance agents: (1) A corporate agent who has been issued a corporate agent licence prior to the commencement of these regulations shall exercise the option of either continuing with the existing licence till the expiry of the licence so granted or surrender the existing licence and apply for a new licence in terms of regulation 3. (2) A Person holding an individual insurance agents licence who wishes to become a corporate agent shall surrender the individual licence and apply afresh as per regulation 3. 13. Miscellaneous: Every corporate agent shall maintain a register which shall contain the name, address, telephone no, photograph, date of commencement of employment, date of leaving the service, if any, salary paid to the specified person.
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INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY, Insurance Regulatory and Development Authority (Meetings) Regulations, 2000

F.No.IRDA/Reg./7/2000: In exercise of the powers conferred by sub-section (4) of Section 10 read with clauses (a) and (b) of sub-section (2) of section 26 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999), the Authority, in consultation with the Insurance Advisory Committee, hereby makes the following regulations, namely:1. Short title, extent and commencement: 1. These regulations may be called the Insurance Regulatory and Development Authority (Meetings) Regulations, 2000. 2. They shall come into force on the date of their publication in the Official Gazette.

2. Meetings of the Authority for transaction of business and procedure to be followed:

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1. The Authority may meet for the transaction of business, adjourn and otherwise regulate its meetings, as provided in these regulations. 2. The Authority shall meet, as often as may be necessary but not less than six times in a year, to transact its business. 3. The meetings of the Authority shall normally be held at its Head Office. Whenever circumstances render it expedient to hold a meeting elsewhere, the same may be so held at any other place in India, at the discretion of the Chairperson. 4. The Chairperson and in his absence, the senior most full time member of the authority shall fix the date, time and place of meetings of the Authority and approve the items of agenda for the meetings. 5. The notice and agenda for the meeting shall be normally circulated seven days in advance by the Designated Officer. The notice and agenda may be delivered to the members personally upon acknowledgement or dispatched through registered post or transmitted through any other secure and reliable modern means of communication, as may be recognised under any law for the time being in force. 6. Every meeting of the Authority shall be presided over by the Chairperson. If for any reason, the Chairperson is unable to attend a meeting of the Authority, any other member chosen by the members present from amongst themselves at the meeting shall preside at the meeting. 7. All questions which come up before any meeting of the Authority shall be decided by a majority in case of voting by the members present and in the event of any equality of votes, the Chairperson, or in his absence, the presiding member shall have a casting vote.
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8. An item not included in the agenda of a meeting may be taken up for consideration, if so approved by the Chairperson or the presiding member, as the case may be.

3. Quorum: 1. The quorum for transaction of business at a meeting of the Authority shall be a minimum of one-third of the appointed members present. 2. Where at any time the total strength of the Authority is less than four, the total number of members, being not less than two, shall constitute the quorum during such time. 3. If at any meeting, quorum is not present, the Chairperson or the presiding member, as the case may be, shall after waiting for thirty minutes, adjourn the meeting for such hour on some other day as he may think fit and the notice of such adjournment shall be given to all the members and the business which was to have been brought before the original meeting, had there been a quorum, shall be brought before the adjourned meeting. Where at the adjourned meeting also, the required quorum is not present, the members present, shall constitute the quorum. 4. A member shall attend all the meetings of the Authority, save where leave of absence has been sought and the same has been granted by the Chairperson or the presiding member. 4. Emergent Meeting:

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1. Notwithstanding any thing contained in the foregoing regulations, the Chairperson, may, by giving at least forty-eight hours notice, convene an emergent meeting of the Authority at any time or place to consider any item, which in his opinion, requires an urgent decision. 2. The Chairperson shall call an emergent meeting if he receives the requisition in writing, signed by members constituting not less than one-half of the total strength, stating the purpose for which they desire the meting to be called. Upon receipt of the requisition, the Chairperson shall by giving at least forty-eight hours notice, convene the requisitioned emergent meeting. 5. Minutes of the meetings: 1. The Designated Officer shall record, within forty-eight hours of the conclusion of every meeting, the minutes of all proceedings at the meeting of the authority or committees meeting of the Authority and after obtaining the approval of the Chairperson or the presiding member, as the case may be, enter the minutes in books kept for that purpose. 2. Each page of every such book shall be initialed or signed and the last page of the record of proceedings of each meeting in such books shall be dated and signed by the Chairperson or the presiding member, as the case may be. 3. In no case the minutes of the proceedings of a meeting shall be attached to any such book as aforesaid by pasting or otherwise but may be kept on loose-leaf style and bound regularly. 4. Notwithstanding any thing contained in sub-regulation(3), the minutes may also be kept by way of micro films or any other authentic modern
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means of safe storing and retrieval of records or printed material produced by a computer, if the same is recognised under any law and subject to the conditions, restrictions or safeguards mentioned in such law. 5. The minutes of each meeting shall contain a fair and correct summary of the decisions arrived at the meeting. 6. The minutes shall also contain a. the names of the members present at the meeting; and b. In the case of each decision taken at the meeting, the names of the members, if any, dissenting from, or not concurring with the decision taken. (7) Nothing contained in this regulation shall be deemed to require the inclusion in any such minutes of any matter which are detrimental to the interests of the Authority. (8) Minutes of the meetings kept in accordance with this regulation shall be evidence of the proceedings recorded therein. 9. The Designated Officer shall after the approval of the minutes by the Chairperson or the presiding member, as the case may be, send a copy of the minutes as entered in the minutes books to every member of the Authority for his information. 10.The Designated Officer shall also communicate, with the approval of the Chairperson or the presiding member, the relevant extracts of the decision taken at the meeting of the Authority or any of its Committees to all concerned for necessary follow-up action and
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monitor their compliance by evolving a suitable reporting system. Periodical reports on follow-up action shall be submitted to the Authority.

6. Invitees at meeting: Any person, whose presence at a meeting is desired for his advice/consultation, may be invited to attend the meeting by the Chairperson. 7. Miscellaneous provisions: 1. The provisions of these regulations shall apply mutatis mutandis to meetings of Committees of members. 2. The Chairperson may attend any committee meeting as ex officio member and whenever the Chairperson attends any committee meeting, he shall preside over that meeting. 3. No member, other than the Chairperson or a person specifically authorized by him, shall give information to the Press or any other public media on matters relating to the working of the Authority and decisions taken at meetings.

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (Registration of Indian Insurance Companies) (Amendment) Regulations, 2003

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F.No.IRDA/Reg./26/2003: In exercise of the powers conferred by section 114A of the Insurance Act, 1938 (4 of 1938) read with section 26 of the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999), the Authority, in consultation with the Insurance Advisory Committee, hereby makes the following regulations to amend the Insurance Regulatory and Development Authority (Registration of Indian Insurance Companies) Regulations, 2000, namely: 1. Short title and commencement: 1. These regulations may be called the Insurance Regulatory and Development Authority (Registration of Indian Insurance Companies) (Amendment) Regulations, 2003. 2. They shall come into force on the date of their publications in the official gazette, except clause (ii) of regulation, which shall be deemed to have come into force with effect from 1st April 2001.

2. Definitions: In the Insurance Regulatory and Development Authority (Registration of Indian Insurance Companies) Regulations, 2000, in sub-regulation (1) of regulation 20, for the existing words preceding clause (a) thereof, the following words shall be substituted: (I) An insurer, who has been granted a certificate under section 3 of the Act, shall make an application in form IRDA/R5 for the renewal
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of the certificate in Form IRDA/R6 to the Authority before the 31 st day of December each year and such application shall be accompanied by evidence of the payment of the fee which shall be higher of (ii) At the beginning of clause (b) of sub-regulation (1) of regulation 20, the words one-fifth shall be substituted with the words onetenth (iii) After Form IRDA/R4, the following Form shall be added as Form IRDA/R5.

MEASURES TO PROTECT INTEREST OF POLYHOLDERS Ombudsmen The IRDA has appointed Ombudsmen. Their function is to resolve complaints in respect of disputes between policyholders and insurers in cost effective, efficient and impartial manner. The complaints to the Ombudsman may relate to: (a) partial or total repudiation of claims

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(b) any dispute regarding premium paid or payable in terms of the policy (c) any dispute on the legal construction of the policy relating to claims (d) delay in settlement of claims (e) non-issue of any insurance document to customers after receipt of premium. The Ombudsman is not a judicial authority. It will act as counsel and mediator in matters within its terms of reference. It has no right to summon witnesses. It has to make its decision on the basis of documents submitted to it. The complainant and the insurer are allowed to make personal submissions. But lawyers are not permitted to argue the case. Complaints to the Ombudsman lie only when the insurer had rejected the complaint or no reply was received within one month of the complaint or the reply was not satisfactory. A complaint can be made within one year after the insurer had rejected the representation. The subject matter should not be already before any court or consumers forum or arbitration. The Ombudsman is expected to make a recommendation within one month from the date of receipt of complaint. It the complainant accepts this recommendation, the insurer has to comply within 15 days and inform the Ombudsman accordingly. If the complainant does not accept the Ombudsmans recommendation, the Ombudsman shall pass an award in writing, stating the amount awarded which shall not be in excess of what is

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necessary to cover the loss suffered by the complainant as direct consequence of the insured peril or for an amount not exceeding Rs. 20,00,000, whichever is lower. The award has to be passed within 3 months. The complainant has to intimate his acceptance of the award within one month by a letter of acceptance to the insurer and the insurer has to comply within 15 days and inform the Ombudsman. If the complainant does not intimate acceptance, the award cannot be implemented.

Right to Information Act,2005 IRDAs Obligation under the Act The Insurance Regulatory and Development Authority (IRDA) is a public authority as defined in the Right to Information Act, 2005. As such, the Insurance Regulatory and Development Authority is obliged to provide information to members of public in accordance with the provisions of the said Act.

Access to the Information held by IRDA The right to information includes access to the information which is held by or under the control of any public authority and includes the right to inspect the work, document, records, taking notes, extracts or certified copies of documents / records and certified samples of the materials and obtaining information which is also stored in electronic form.
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IRDA Website The IRDA maintains an active website (URL: http://www.irdaindia.org ). The site is updated regularly and all the information released by the IRDA is also simultaneously made available on the website. The information published in public domain include the following: 1. Acts/Regulations 2. Information relating to Insurers/Reinsureres, Agents Training Institutes, Appointed Acturies. 3. Information relating to Surveyors, Third Party Administrators, Insurance Brokers, Corporate Agents 4. Information relating to Insurance Councils, Insurance Ombudsmen 5. Annual Report/IRDA Journal 6.Press Releases. Complaints against Insurance Companies IRDA has provided for a separate channel for lodging complaints against deficiency of services rendered by Insurance Companies. If anyone has a complaint/grievance against an insurance company for poor quality of service rendered by any of its offices/branches, can approach the Nodal Officer of the Insurance Company concerned. In case he is not satisfied with

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the Insurance Companys response can also file a complaint with the Insurance Ombudsman in respective State.

Complaints from Policyholders Policyholders who have complaints against insurers are required to first approach the Grievance/Customer Complaints Cell of the concerned insurer. If they do not receive a response from insurer(s) within a reasonable period of time or are dissatisfied with the response of the company, they may approach the Grievance Cell of the IRDA.

Insurance Information Bureau (IIB) In order to fulfill the statutory mandate as enunciated in Section 14 (2) (1) (e) of the IRDA Act, 1999, the Authority hereby constitutes Insurance Information Bureau (IIB). For efficient functioning of the insurance sector companies as well as for the protection of the interests of the policyholders, it is necessary that reliable, timely and accurate data is collected, processed and disseminated by an independent body. The Insurance Regulatory and Development Authority (IRDA) being the regulator is having necessary access to the data related to insurance business in the country. Hence it becomes the duty of the regulator to ensure that the available data is processed in such a fashion that it is useful for the

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various market players, researchers, policyholders as well as the common public at such intervals that it will be helpful for real-time decision making. It is also essential for IRDA to undertake this activity through an advisory body consisting of representatives of the industry, experts in the insurance domain as well as in information technology as the data so produced by such a body will have necessary public confidence.

CURRENT AFFAIR: DISPUTE BETWEEN IRDA & SEBI ON ULIP On 9th April 2010, SEBI banned 14 life insurance companies from raising funds through Unit-linked Insurance Policies(ULIP). The life insurance companies against whom SEBI passed the order are SBI Life, ICICI Prudential, Tata AIG, Aegon Religare Life, Aviva Life, Bajaj Allianz,
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Bharti AXA, Birla Sunlife, HDFC Standard Life, ING Vysya Life, Kotak Mahindra Old Mutual Life, Max New York Life, Metlife India and Reliance Life. The Sebi order does not cover state-owned insurance major LIC. A day later, insurance sector regulator IRDA asked the companies to ignore the SEBI order and do business as usual. Ulips are insurance plans with disparate investment options and have captured the buyers imagination in the last few years. They also hold the dubious distinction of being one of the most grossly mis-sold financial products in the country. ULIP is an insurance product in which a bulk of the premiums is invested in equities and bonds. At present, over 70% of the new business premium for most insurance companies come from ULIPs, running into thousands, if not lakhs of customers. The genesis of the SEBI order goes back to the feud between MFs and insurance companies. One of the main contention is that although a ULIP is an insurance product which comes under IRDA, part of it is also an investment product which should ideally be regulated by SEBI. The issue was also taken up at the meeting of the inter-regulatory body, the High Level Coordination Committee (HLCC). It was decided at the meeting that the two regulators should settle the issue between themselves. So, SEBI has taken a legal process. In the context of the recent directions of the Securities and Exchange Board of India (SEBI) to 14 insurance companies directing them not to issue any offer document,

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advertisement, brochure soliciting money etc from investors, the IRDA deems it appropriate to issue the following statement. Policyholders of the Unit Linked Insurance Products (ULIPs) offered by different insurance companies are assured that these policies are safe and secure and the matters arising out of the recent orders of the SEBI will be addressed expeditiously in the appropriate forum in accordance with Law. The status quo will be maintained till a court decides who can regulate ULIP schemes. To resolve any ambiguity and to ensure smooth functioning in the market, the regulators have agreed to jointly seek a binding legal mandate from an appropriate court.

Solutions The court should hear its decision as fast as possible. Because of this dispute between two regulators, new insurers who entered the market, they are not able to sell their many products.

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The dual control should be removed as every party face problem because of it. The full control should be given in the hands of IRDA because at present a more control is in the hands of IRDA than SEBI.

CONCLUSION With the opening up of Insurance sector, attention has to be paid to scope and content of prudential regulation, covering solvency margins, capital adequacy, investment norms, and other aspect as well as regulations

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of tariff. An Insurance Regulatory and Development Authority (IRDA) has been set up so as to provide such a framework of regulation to insurance sector. So for any sector or organization or company or firm, their must be a regulatory body, keeping watch on its working. Such institution facilitate for the smooth working of the organization Hence IRDA will always their to protect the interests of the policyholders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto.

BIBLIOGRAPHY BOOKS:
Insurance Business Environment

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67 Insurance Institute of India

Insurance Law and Practice Business Law Chandra Bose C. L. Tyagi & Madhu Tyagi

INTERNET SOURCE:
http://www.irda.org.in http://www.google.com http://www.wikipedia.com http://www.moneycontrol.com

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