Let us try to understand the notion of the insurance regulator of India with the analogy of a joint family. A typical joint family consists of children, parents and grandparents. The grandparents or sometimes parents, act as guardians for each member by taking care of everyone’s needs and ensuring a fine balance of fair practises to keep the household united. He/she treats everyone equally and supports the family in crisis and directs them on how to steer out of trouble. Just like the head of the family, the IRDAI runs the insurance industry based on a set of rules and guidelines.
What is IRDAI?
Let us now try to understand the IRDAI in depth. The term IRDAI is an abbreviation for the Insurance Regulation and Development Authority of India. This authority oversees the operations of General Insurance and Life Insurance and acts as a regulator for insurance companies in India.
The primary goal of the IRDAI is to safeguard the interest of policyholders and regulate insurance companies. The IRDAI is also known as the apex body for the insurance industry in India. The IRDAI was set up in 2000 after the proposal of the Malhotra Committee Report in 1999. As of September 2020, 24 Life Insurance Companies and 31 General Insurance Companies have registered themselves with the IRDAI.
Objectives of IRDAI
The principal objectives of the Insurance Regulation and Development Authority of India are to impose the provisions under the Insurance Act, with the following mission statement:
- To defend the interest of policyholders and ensure their fair treatment.
- To govern the insurance industry with complete integrity and ensure economic soundness of the industry.
- To routinely frame regulations to make sure that the industry operates with clarity.
Role of IRDAI in the Car Insurance Sector
Today, many car insurance companies can analyse your requirements and offer you the best car insurance in India. Insurance companies offer both offline and online car insurance. The IRDAI plays an essential role in highlighting the importance of policyholders and upholding their interests while structuring the rules and regulations. Here are major roles played by the IRDAI:
- To safeguard the interest of the policyholder
- To assist in increasing the growth of the insurance industry for the common man’s benefit
- To supply long-term funds in order to boost the country’s economy
- To enforce high standards of integrity, financial soundness, fair dealing and proficiency of the insurance providers
- To make sure authentic claims are settled faster and in a more efficient manner
- IRDAI has also established a grievance redressal forum to stop malpractices and frauds and protect the interest of the policyholder
- To promote fairness, transparency and systematic conduct of insurance in the economic markets
- To establish a dependable management system that ensures high standards of economic stability are pursued by insurance companies
- To take appropriate actions whenever an insurer fails to maintain high standards
- To guarantee an optimum level of self-regulation among insurance companies in the industry
What is an Insurance Ombudsman and How to Register to a Complaint with an Insurance Ombudsman?
Sometimes, there are chances that you might feel dissatisfied with the services offered by the insurance company. For example, you may wish to see changes in your car insurance details, face an issue with the car policy renewal or get stuck with the claim settlement of your policy. In such cases, you must first register a complaint with your insurance company and try to get in touch with their customer service. If you feel you are still not satisfied, you can approach the Insurance Ombudsman.
Insurance Ombudsman is a system designed by the Central Government to ensure cost-effective, impartial and efficient settlement of grievances of a policyholder. You can approach for Insurance Ombudsman in the following events:
- Insurance claim settlement delay
- Conflict over the premium of insurance
- Total or partial rejection of the claim by the insurance company
- Conflict due to the terms and conditions of the policy
- Dispute because of legal aspects of the policy
- Conflicts subjected to policy services
- Violations of regulations or rules of the Insurance Act, 1938
You can lodge the complaint in writing which is duly signed by the complainant or by their legal heirs or nominees. You can either register the complaint in person or via email/fax/post along with a hard copy.
With the increasing number of wheels on the road each day, the need for more insurance companies is rising. The economy of our country is also growing rapidly, which further encourages the entrance of new insurance companies in the market. In order to keep the pace of expansion even-handed, the IRDAI plays a crucial role in maintaining quality standards. With integrity and impartial regulations for all insurance companies, IRDAI will further contribute to strengthening the economic capacity of our country as a whole.