Daily Current Affairs : 13-March-2024
The Insurance Regulatory and Development Authority of India (IRDAI) plays a crucial role in safeguarding the interests of insurance policyholders in India. Established in 1999, this statutory body operates under the Ministry of Finance and is headquartered in Hyderabad. The recent regulations introduced by IRDAI aim to create a unified framework that enhances consumer protection.
Background of IRDAI
IRDAI was formed under the IRDA Act of 1999, with the primary aim of overseeing and developing the insurance industry in India. Its powers and responsibilities are defined by both the IRDA Act and the Insurance Act of 1938. The authority ensures that insurance companies operate fairly and fulfill their obligations to policyholders.
Key Objectives of the New Regulations
In 2024, IRDAI consolidated eight separate regulations into a new set of guidelines referred to as the IRDAI (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations. The principal objectives of these guidelines include:
- Protection of Policyholders: Ensuring that the interests of policyholders are prioritized.
- Fulfillment of Obligations: Making sure that insurers and distribution channels meet their responsibilities.
Important Measures Introduced
The new regulations introduce several key measures to enhance policyholder protection:
- 30-Day Free-Look Period: Policyholders can review their insurance policies for 30 days. If they are not satisfied, they can return the policy for a full refund.
- Nominee Information Requirement: Life insurance policies must collect compulsory nominee information, ensuring that beneficiaries are clearly identified.
- Electronic Policy Offerings: Policies can now be offered electronically, with strict data privacy safeguards in place to protect personal information.
- Prevention of Mis-selling: The regulations aim to reduce instances of mis-selling and unfair practices in the insurance sector.
- Grievance Redressal Systems: Insurers are required to establish systems for addressing complaints and grievances from policyholders.
Vision for the Future
IRDAI’s “Vision Insurance for All” initiative aims to achieve comprehensive insurance coverage across India by 2047. This vision includes allocating states and union territories to specific insurers to increase market penetration. Additionally, in 2023, IRDAI plans to introduce the “Bima Trinity,” which comprises Bima Sugam, Bima Vistar, and Bima Vaahaks. These initiatives are designed to streamline insurance activities and improve accessibility for all.
Important Points:
Establishment of IRDAI: Founded in 1999 under the IRDA Act to oversee the insurance industry in India.
Unified Regulations: In 2024, IRDAI consolidated eight regulations into the IRDAI (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations.
Key Objectives:
- Protect the interests of policyholders.
- Ensure insurers fulfill their obligations.
Important Measures Introduced:
- 30-Day Free-Look Period: Allows policyholders to return policies for a full refund within 30 days.
- Nominee Information Requirement: Mandatory collection of nominee details for life insurance policies.
- Electronic Policy Offerings: Policies can be offered electronically with data privacy safeguards.
- Prevention of Mis-selling: Regulations aimed at reducing mis-selling and unfair practices.
- Grievance Redressal Systems: Insurers must establish systems to address complaints from policyholders.
Vision for the Future:
- “Vision Insurance for All” aims for comprehensive coverage by 2047.
- Introduction of the “Bima Trinity” (Bima Sugam, Bima Vistar, Bima Vaahaks) to streamline insurance activities and enhance accessibility.
Why In News
The Insurance Regulatory and Development Authority of India (IRDAI), exercising its powers under the Insurance Act of 1938 and the IRDA Act of 1999, has framed the IRDAI (Protection of Policyholders’ Interests and Allied Matters of Insurers) Regulations, 2024, which consolidates eight separate regulations into a unified framework, aiming to enhance transparency and accountability in the insurance sector.
MCQs about IRDAI
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What is the primary goal of the IRDAI?
A. To promote foreign investment in India
B. To protect the interests of insurance policyholders
C. To regulate the stock market
D. To increase government revenue
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Which of the following measures allows policyholders to review their insurance policies?
A. Nominee Information Requirement
B. 30-Day Free-Look Period
C. Grievance Redressal Systems
D. Electronic Policy Offerings
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What does the “Bima Trinity” initiative include?
A. Bima Sugam, Bima Vistar, and Bima Vaahaks
B. Bima Policy, Bima Claim, and Bima Refund
C. Bima Access, Bima Coverage, and Bima Protection
D. Bima Secure, Bima Trust, and Bima Future
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What does IRDAI’s regulation on electronic policy offerings emphasize?
A. Increasing premiums for electronic policies
B. Collecting more personal data from policyholders
C. Implementing data privacy safeguards
D. Allowing unregulated policy sales
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