The Insurance Regulatory and Development Authority of India is a statutory body under the Insurance Regulatory and Development Authority Act of 1999.
It is the apex authority responsible for the regulation of the insurance industry in India and ensures its development and smooth running. Its prime objective is to safeguard the interest of the policyholder, promote rapid and well-organized growth of the insurance market, and bring speedy settlement of genuine claims.
It further promotes transparency, fairness, and stability in these insurance markets.
 IRDAI regulates life as well as non-life insurance companies and helps them to work within the framework of statutory law and thereby assures the market of financial security. These have been expressed in the IRDA Act, 1999 and the Insurance Act, 1938 under which authority is empowered to frame regulations that oversee this industry. Prudential regulation is one of the core areas where it ensures the soundness of insurers’ finances at all times, while dealing with them fairly.
It has also established an effective grievance forum so that the grievances from the policyholders’ side are heard without being prolonged. IRDAI is, therefore, the growth and development factor of the Indian insurance industry that protects the insured and maintains the standards in the industry.
The objective of IRDAI is to protect the interests of the policyholders and ensuring the fair treatment of policyholders. It tries to stimulate the quick and harmonized development of the insurance market, annuities, and allowance payments in line with the public’s interests and for long-term savings to stimulate economic growth.
It establishes, promotes, monitors and enforces high standards of integrity, financial soundness, fairness, and competence among regulated entities.
It ensures timely settlement of valid claims; avoids the commission of fraud and malpractice in insurance transactions and fosters powerful grievance mechanisms. It also seeks to promote greater transparency, fairness and order in practices within financial markets concerning insurance and a good reliable management information system in support of maintaining high standards of finance of the participants in the market.
When such standards are not adequately or not effectively enforced, steps shall be taken to remedy it. Lastly, it promotes the optimal level of self-regulation within the industry in agreement with wise regulatory principles.
IRDAI also regulates the business efficiency, promotion and supervising professional organizations dealing in insurance and reinsurance businesses, and imposition of fees for the implementation of the Act. It pertains to solicitation, audit, and inspection of insurers and intermediaries and associations while controlling tariffs, benefits, and general conditions of insurance, excluding those governed by the provisions of section 64U of the Insurance Act, 1938. Regulation deals with how the account of an insurer is prepared and presented.
Regulation includes reviewing the investment of funds by insurance companies to ensure that they maintain appropriate solvency margins. It also administers conflict resolution between the insurers and agents, oversees the activities of the Tariff Advisory Committee, requires setting premium income for professional associations promotion, imposes insurance needs in rural or social sectors, and performs any other function assigned.