The Insurance Regulatory and Development Authority of India (IRDAI) is the body responsible for regulating the health insurance industry sector in India. It has set a series of guidelines that lay the foundations for every insurance company to operate, in the Indian context.
The way in which IRDAI functions
Section 14 of IRDAI Act, 1999 lays down the duties, powers and functions of IRDAI.
The mission of IRDAI 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.”
To protect the interest of and secure fair treatment to policyholders;
- To bring about speedy and orderly growth of the insurance industry (including An agreement by an insurer to make periodic payments that continue during the survival of the annuitant(s) or for a and superannuation payments), for the benefit of the common man, and to provide long term funds for accelerating growth of the economy;
- To set, promote, monitor and enforce high standards of integrity, financial soundness, fair dealing and competence of those it regulates;
- To ensure speedy settlement of genuine claims, to prevent insurance frauds and other malpractices and put in place effective grievance redressal machinery;
- To promote fairness, transparency and orderly conduct in financial markets dealing with insurance and build a reliable management information system to enforce high standards of financial soundness amongst market players;
- To take action where such standards are inadequate or ineffectively enforced;
- To bring about optimum amount of self-regulation in day-to-day working of the industry consistent with the requirements of prudential regulation.
There are multiple dimensions in which the IRDAI functions to professionally regulate the Indian Insurance Sector. It is an autonomous body with full control on implementation of guidelines and monitoring the activities of the insurance companies, including insurance brokers. It provides the certification of authenticity to the insurers. Here is a list of points that give fair ideas about how it operates:
- Protecting the interests of the policyholders. It can be at the time of claims or issuance/cancellation of The legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy.
- The IRDAI mandates that no insurer has the right to deny claims, unless it is beyond the limit of the cover, according to the official The legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy document.
- The code of conduct in the market is declared and monitored by the IRDAI to maintain competitiveness in the insurance industry. The code of conduct is applicable to all insurers, surveyors, and certified loss assessors.
- The body makes it compulsory to perform an annual audit (or when required) of the insurance operations of industry players, to prevent any kind of misdeed in the market.
- IRDAI also has the responsibility in regulating the rates/terms offered by various insurers, focusing more on the interests of the customers.
- IRDAI takes into account the development of both urban and rural sectors. Accordingly, it compels the insurer to carry a balanced proportion of providing insurance products in both life and non-life domains.
Every insurer falls under the monitoring of IRDAI
Every insurance company operating in the Indian market falls under the monitoring of IRDAI. It is compulsory to follow the guidelines set by the IRDAI and adhering to the set regulations, and adjusting one’s business model accordingly. There is no compromise on this matter.
IRDAI regularly updates the guidelines
IRDAI focuses on making the insurance sector in India more efficient and consistent, regularly. It updates the guidelines that the insurers follow in carrying their operations. The new or altered guidelines aim to make the insurance sector more effective in terms of providing optimal services to the customers.
The core of IRDAI’s practice
IRDAI creates a competitive environment in the insurance market, establishing well-defined, transparent industrial practices.
- The body always aims at a systematic growth of the sector. It creates and implements suitably innovative strategies that benefit businesses and people who invest in a wide range of insurance products, ensuring a strong safety net for the huge number of customers in the Indian market.
- One of the principal objectives of IRDAI is dedicatedly protecting the interests of businesses and commoners who avail the insurance policies, at any scale. It leads to developing more trust for the overall system. Small businesses and individuals become more confident about the effectiveness of insurance products. They do not hesitate to buy reliable insurance policies from the market.
- IRDAI is responsible to check out the dynamics of insurance dealings. It has the task to monitor and judge whether the dealings are fair or not. Maintaining the integrity of the insurance sector is a top priority.
- Expediting the claim settlements is one of the major ways in which customers trust the insurers and the system. IRDAI monitors the process with a highly expert and professional approach.
- Setting the standards of insurance-related operations is also among the priorities of IRDAI.
- IRDAI shoulders the responsibility of conducting vigilance to deal with scams or frauds.
Creating guidelines with standard nomenclature
IRDAI creates guidelines that have several terms related to the insurance sector. It defines each term in clear language, focusing on the technical perspective, where needed. The regulatory body sets the terminology of various aspects directly or indirectly related to insurance operations.
IRDAI (Health Insurance) Regulations, 2016 were notified on 18-07-2016. As specified in Schedule – III of the Regulations; the Authority has to specify certain Guidelines, Regulatory Returns and Formats etc., for compliance by all Insurers and TPAs, as may be applicable. All insurers shall adhere to the standard definitions for all insurance products under the definition of ‘Health Insurance Business’ to avoid interpretation issues.
Standardization for providers
IRDAI also sets clear guidelines that tell about the standard eligibility criteria of the providers within the framework of insurance policies and their applicability. Each provider is bound to stick the guideline while delivering services to the customer.
You can check out the IRDAI site
It is wise to check out the details on the official website of IRDAI to know more about the guidelines and the way the body regulates the insurance sector. You will get lot of information from the website that will be helpful while choosing an insurer and The legal document issued to the policyholder that outlines the conditions and terms of the insurance; also called the ‘policy.
Approach an insurer certified by IRDAI
The rational step is to approach an insurer or broker (like PlanCover) that has the required certification from IRDAI. You get the assurance of availing an effective insurance product that is loaded with benefits. You will be more confident to purchase the insurance product.