The Insurance Regulatory and Development Authority of India (Irdai) is an autonomous and statutory body which is responsible for managing and regulating insurance and re-insurance industry in India.
Irdai is a 10-member body- a chairman, five full-time members and four part-time members. It was constituted under an Act of Parliament in 1999 and the agency’s headquarters is in Hyderabad.
History of India’s insurance industry
In I950, the Government of India nationalised India’s insurance industry and established Life Insurance Corporation (LIC) of India. In the 1990s, the government decided to open up the insurance sector to private players. A committee was set up to propose reforms and the Irdai was formed.
In 2000, when the market was opened up, foreign firms were allowed to buy of up to 26 per cent stake in Indian insurance companies. Later, foreign direct investment in the insurance sector was capped at 49 per cent. This was finally changed to 100% in Budget 2020.
The role of Irdai
Insurance is a growing sector in India. According to media reports, India’s life insurance companies saw 11.36 per cent growth in collective premium income to Rs 48.26 trillion or $684.64 billion during the financial year ended March 2020.
Irdai, therefore, has many roles. First, it has to protect the interests of insurance policy holders and ensure that they are treated in a just manner. It also has to monitor policy issuers to ensure that the common man’s interests are not subverted.