Published: 11th May, 2019
The Insurance Regulatory and Development Authority of India (IRDAI) has set up a committee to review the regulatory framework on micro-insurance and recommend measures to increase the demand for such products.
Context
The Insurance Regulatory and Development Authority of India (IRDAI) has set up a committee to review the regulatory framework on micro-insurance and recommend measures to increase the demand for such products.
About
IRDAI and its composition
- Following the recommendations of the N. Malhotra Committee report (1994), IRDAI was setup as an autonomous body under the IRDA Act, 1999. Its headquarters is in Hyderabad.
- The committee has been formed in the backdrop of a less- than-desired off take of micro-insurance products despite their inherent benefits. Its market penetration remains low.
- The 13-member panel comprising officials of the IRDAI, insurers and NGOs is chaired by IRDAI Executive Director Suresh Mathur.
- The committee has representatives from life, general and health insurance companies in the public and private sectors.
Functions : Section 14 of the IRDA Act, 1999 lays down the functions of IRDA.
- Regulating the insurance industry and protects the customers
- Promotion of competition to enhance customer satisfaction
- Promoting professional organizations in insurance
- Licensing and establishing norms for insurance intermediaries
- Lowering premiums for ensuring the financial security of the insurance sector.
- Specifying financial reporting norms of insurance companies
- Regulating investment of policyholders’ funds by insurance companies
- Ensuring the maintenance of solvency margin by insurance companies
- Ensuring insurance coverage in rural areas and of vulnerable sections of society
- It will also suggest changes in the distribution structure, if any, including mobile-based and technology driven solutions.
Micro-insurance Policy:
- Micro-insurance refers to products offering coverage to low-income households or to individuals who have little savings and is tailored specifically for lower valued assets and compensation for illness, injury or death.
- Though it promises to support sustainable livelihoods of the poor, its market penetration remains low.
- A general or life insurance policy with a sum assured of Rs.50,000 or less is covered under micro-insurance policy.
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