Introduction-
1912 Indian Life Assurance Companies Act was the first insurance legislation introduced in India that aimed at the conduct of the business of insurance companies. In these respects, this Act represented a noteworthy landmark in the growth of the insurance industry in India for the reason that it was the very first time that the authorities took a regulatory step for the operations of life insurance companies.
Key Needs of the Act-
1. Registration- The Act required as a prerequisite the registration with the Indian government of all life insurance companies doing business in the country.
2. Financial Reporting- These companies must present their annual accounts to the authorities for approval.
3. Investment Restrictions- Some limitations were imposed upon the life insurance companies in respect of their investments.
4. Policyholder Protection- The Act also obtained provisions that were aimed at protecting the interests of policyholders such as a requirement for companies to make sure that adequate reserves were set up.
Insurance Regulation in India has Empires itself On Ladies from other Acts –
It is because of the Indian Life Assurance Companies Act, of 1912, that a few other legislations were made to follow also regulate insurance affairs in India. These include-
1. Indian Insurance Companies Act, 1928- this legislation widened the scope of regulation so as to cover life and non-life insurance companies.
2. Insurance Act of 1938- This enacted law was a consolidation and amendment of the previous insurance laws and was intended to provide an all-inclusive regulatory framework for the insurance business in India.
3. General Insurance Business (Nationalisation) Act, 1972- This Act promulgated a nationalization of the general insurance business in India that resulted in the establishment of the General Insurance Corporation of India (GIC).
4. Life Insurance Corporation Act, 1956- The Act also sought to devolve the life insurance business in India thereby establishing the Life Insurance Corporation of India.
Insurance Regulatory and Development Authority (IRDAI)-
The Insurance Regulatory and Development Authority (IRDAI) came into being in 1999 as an independent authority to regulate, control, and develop the insurance industry in India. The IRDAI has the following responsibilities –
- Protecting the interests of the insured policyholders.
- Development of the insurance industry.
- Insurance companies to be guided by sound principles and practices.
- Settling grievances/policy issues of the insured and the insurance companies.
Current Scenario-
Nowadays, the Indian life and nonlife insurance market has evolved into one of the most potent business markets in the world. Since the economic policy reformations in the 1990s, growth, and diversity in the insurance market have been of significant proportion. The IRDAI ensures that the framework for the development of the insurance industry in India is secure and fully developed.
Conclusion –
The insurance industry in India received its first regulating framework with the Indian Life Assurance Companies Act of 1912.
However, the system has improved a lot, because of the progress the IRDAI has made in protecting policyholders’ interests and the development of the industry itself.
FAQ-
1. How is a health insurance claim lodged?
In most cases, all that is needed is the notification of the claim, the documents to be submitted, and a wait for the approval and settlement of the claim.
2. What factors determine the car insurance premium?
Factors such as the model of the car, make, engine capacity, where it is based and age and past driving record of the insured will determine the premium.
3. What is meant by a waiting period in a health insurance policy?
A waiting period is the time you have to pass before particular benefits such as pre-existing diseases, come into effect.
Again, for further elaboration on the matter, do check the guidance available on the IRDAI’s website – https://irdai.gov.in/
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