IRDA (Insurance Regulatory and Development Authority)

Definition:

IRDA is the Insurance Regulatory and Development Authority which is the only insurance regulatory body in India formed in 2014. The main objective of the Insurance Regulatory and Development Authority of India is to observe and regulate the provisions of insurance.

Description:

The provisions are made under the Insurance Act that applies to different insurance policies under both, life and non-life insurance segments.

IRDA acts as the regulator of the insurance industry in India. The body oversees the functioning of the Life Insurance and General Insurance companies that are registered in India. The prime objective of the IRDA is to protect the interests of the policyholders and regulate the insurance industry.

Example:

AYZ Life Insurance Company Limited tried to capture the market by paying 1% higher commission than the standard rate applicable on sales of term life insurance policies in the industry. The competitors complained about the same to IRDA. The regulatory body took strict actions against AYZ Life Insurance Company and cancelled their licence to sell term plans.

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