Regulatory Environment – IRDAI
Just as RBI regulates Banks and SEBI regulates Stock Markets, the IRDAI (Insurance Regulatory and Development Authority of India) regulates the Insurance sector. It is the "Police" that ensures insurers don't cheat you.
About IRDAI
- Est: 1999 (Headquartered in Hyderabad).
- Mission: To protect the interests of policyholders and regulate the industry.
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Key Functions of IRDAI
- Licensing: No company can sell insurance without an IRDAI license.
- Product Approval: Every new policy (e.g., "Corona Kavach") must be approved by IRDAI before launch.
- Solvency Margin: Ensures companies keep enough spare cash to pay claims even in disasters (like Covid).
- Grievance Redressal: Helps customers fight against rejected claims.
Policyholder Rights
As a customer, IRDAI gives you powerful rights:
- Free Look Period: You have 15 days (30 days for online) to return a policy after buying if you don't like the terms. You get a full refund.
- Grace Period: Extra time (usually 30 days) to pay premium after due date without policy lapsing.
- Claim Settlement: Insurers must settle claims within 30 days of receiving documents.
Insurance Ombudsman
If an insurance company rejects your claim unjustly, where do you go? Court? No, it's slow. You go to the Insurance Ombudsman.
- It is: A quasi-judicial body for quick dispute resolution.
- Cost: Free for customers.
- Power: Its order is binding on the Insurance Company (they must obey), but not on you (you can still go to court).
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Summary
- IRDAI: The supreme regulator.
- Free Look: Your 15-day "try and buy" period.
- Ombudsman: The specialized court for insurance complaints.
- Safety: Your money is safe because IRDAI monitors the financial health of unrelated insurers strictly.
Quiz Time! 🎯
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