Union Govt notifies six insurance regulations of IRDAI

Union Govt notifies six insurance regulations of IRDAI

The insurance sector in India is a rapidly growing industry, with many domestic and internationals companies offering a wide range of insurance products. With the aim to further boost the insurance penetration in India from 4.2% to world average 6.3%, Government of India notifies new rules.

• Increase in tie-up limits : to facilitate the reach of insurance to the last mile, a Corporate Agent (CA) can tie-up with 9 insurer earlier it was 3 and Insurance Marketing Firms (IMF) can tie-up with 6 insurers earlier it was 2.
• Regulatory sandbox : The regulatory sandbox is a type of programme that allows businesses and individuals to test new products, services, or business model in a controlled environment, without having fully comply with the existing regulations. In new rules, regulatory sandbox experiment period had been raised from 6 months to upto 36 months. A provision related to review of rejected application under sandbox has also been introduced.
• No prior approval for raising other form of capital : In order to facilitate easing of other form of capitals which include subordinate debt/or preference shares, the requirement of prior approval from IRDAI is dispensed with.
• Flexibility for Appointed Actuary (AA) : the experience and qualification requirements for Appointed Actuary (AA) has been made flexible to ensure sufficient supply of AA professionals in the industry. AA professionals play a significant role in maintaining the solvency level by carrying out a regular valuation of reserve held by insurers to pay future policy benefits.
• Solvency norms : The period for considering State/Central government premium dues for calculation of solvency position has been increased from 180 to 365 days.
• Ease in registration of insurance companies : in order to promote the ease of doing business in the insurance sector, the process of setting up an insurance company in India has been made simpler.

• The Insurance Regulatory and Development Authority of India (IRDAI) is an autonomous, statutory body that regulates and develops the insurance industry in India.
• It was established in 1999 by an act of the Parliament.
• RDAI is responsible for regulating the insurance sector in India and ensuring that insurance companies operate in a fair, transparent, and stable manner.
• Important functions performed by IRDAI
  • Issue licenses to insurance companies and intermediaries
  • Regulate the investment of insurance companies
  • Promote competition and fairness in the insurance market
  • Protect the interests of policyholders