Ajay Seth appointed as IRDAI chairman

Basic Overview

• Statutory Body under Ministry of Finance

• Established by: Insurance Regulatory and Development Authority Act, 1999

• Began Functioning: April 2000

• HQ: Hyderabad, Telangana (moved from Delhi in 2001)

• Tasked with: Regulating and licensing the insurance and re-insurance industries in India

Historical Background

• Life Insurance in India:

  • Started with Oriental Life Insurance Co., 1818 (Calcutta)

  • Indian Life Assurance Companies Act, 1912 – first life insurance law

  • Insurance Act, 1938 – consolidated regulations

  • Nationalisation:

    • LIC formed in 1956, absorbing 245 insurers & societies

    • Monopoly until late 1990s

• General Insurance:

  • Started with Triton Insurance Co., 1850 (Calcutta)

  • Nationalised in 1973 under General Insurance Business (Nationalisation) Act, 1972

  • 107 insurers merged into 4 PSU insurers:

    • National Insurance, New India Assurance, Oriental Insurance, United India Insurance

  • GIC created in 1971, became national reinsurer in 2000

• Insurance Sector Reforms:

  • Malhotra Committee (1993) recommended:

    • Entry of private sector

    • Foreign companies via joint ventures

  • IRDA established in 1999, opened up insurance sector in August 2000

  • FDI Limits:

    • 26% → 49% in 2015

    • 74% in 2021 Union Budget

Organisational Structure (As per IRDAI Act, 1999 – Section 4)

• Total Members: 10

  • 1 Chairman

  • 5 Full-time Members

  • 4 Part-time Members

• Current Chairman (as of July 2025): Ajay Seth

• Other Full-Time Members: T.L. Alamelu, K. Ganesh, Pournima Gupte, Praveen Kutumbe, Sujay Banarji

Functions of IRDAI (Section 14, IRDAI Act, 1999)

1. Issue/renew/modify/cancel insurer registrations

2. Protect interests of policyholders

3. Specify qualifications and training of agents

4. Specify code of conduct for:

   • Intermediaries

   • Surveyors and loss assessors

5. Promote efficiency in insurance business

6. Regulate rates, advantages, T&Cs (not under TAC)

7. Inspect/investigate insurers & intermediaries

8. Regulate investment of insurer funds

9. Maintain solvency margins

10. Adjudicate disputes between insurers and intermediaries

11. Supervise Tariff Advisory Committee

12. Promote insurance in rural/social sectors

13. Levy fees, specify accounting formats

14. Specify premium percentages to fund professional organisations

Recent Developments (2024–2025)

• Health Insurance Reforms (April 1, 2024):

  • Removed upper age limit (previously 65 years) for buying health policies

  • Directed insurers to:

    • Design senior citizen–friendly products

    • Create dedicated grievance redressal channels for elderly

• Insurance Repository System:

  • Allows maintenance of policies in electronic form (e-policy)

  • Improves transparency, security, and ease of access

Economic Contribution

• Insurance + Banking = ~7% of India's GDP

Key Legislation

• IRDA Act, 1999 – Establishes and empowers IRDAI

• Insurance Act, 1938 – Core regulation of insurance

• LIC Act, 1956

• GIBNA Act, 1972 (General Insurance Business Nationalisation)

Prelims Pointers