The Insurance Regulatory and Development Authority of India has approved eight principle-based consolidated regulations for the insurance sector, leading to regulatory change.
The regulations, approved at the 125th meeting of the board held on March 19, cover various areas such as protection of policyholders’ interests, responsibilities in the rural and social sectors, electronic insurance market, insurance products and operation of foreign reinsurance branches, as well as aspects of registration, actuarial, finance, investment and corporate governance.
They come after the notification of the first consolidated regulation on the costs of managing insurers in January 2024, which replaces 34 existing regulations with six regulations and introduces two new regulations.
IRDAI (Rural, Social Sector and Vehicle Third Party Liabilities), 2024
The regulator has revised the minimum business obligations in the rural, social sector and third-party motor business for insurers as set out in the Insurance Act.
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The unit of measurement for village duties will now be the gram panchayat
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The scope of the social sector has been extended to cover cardholders and beneficiaries under various schemes.
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Under the Third Party Carriage Obligations, the unit of measurement will be the renewal of insurance cover on goods vehicles, passenger vehicles and tractors.
IRDAI (Bima Sugam – Electronic Insurance Market) Rules, 2024
Approved creation of digital public infrastructure called Bima Sugam.
This marketplace serves as a one-stop solution for all insurance stakeholders including customers, insurers, intermediaries and agents
Registration, Capital Structure, Transfer of Shares and Amalgamation of Insurers Rules, 2024 of IRDAI
This streamlines seven regulations into one comprehensive framework to improve the ease of doing business in the insurance industry.
It simplified various processes including registration of insurers, transfer of shareholding, capital structure, merger of insurers and listing of shares on stock exchanges.
IRDAI (Corporate Governance for Insurers) Rules, 2024
This is the first time that aspects of governance under existing guidelines have been communicated in the form of a regulation. They aim to create a sound governance framework for insurers by defining the roles and responsibilities of the board and management and emphasizing the importance of governance in the functioning of an insurance company.
They emphasize transparency, accountability and ethical behavior.
IRDAI (Insurance Products) Rules, 2024
They combine six regulations into a single framework.
These provisions promote good governance in product design and pricing, including strengthening the principles governing guaranteed returns and special returns along with their disclosure.
The regulations encourage the development of innovative insurance products that meet the requirements of different sections of society.
IRDAI (Registration and Branch Operations of Foreign Reinsurers and Lloyd’s India), 2024
This aims to promote the systematic development of the reinsurance sector in India.
These regulations aim to streamline the operations of reinsurance entities, promote transparency and stability, and create an enabling environment for the growth and expansion of the reinsurance sector.
IRDAI (Actuarial, Financial and Investment Functions of Insurers) Regulations, 2024
This consolidates nine regulations into one framework focused on increasing the efficiency and responsiveness of insurers’ actuarial, financial and investment functions.
The goal is to implement sound and responsive management practices to effectively perform actuarial, financial and investment functions, protect the interests of policyholders and promote ease of doing business.
They also emphasize the preparation and reporting of regulatory filings by insurers for transparency and accuracy.
IRDAI (Protection of Interests of Policyholders and Related Matters of Insurers) Rules, 2024
These provisions focus on several key objectives aimed at ensuring fair treatment of potential customers during the recruitment and sale of insurance policies and protecting the interests of policyholders during their interactions with insurers and distribution channels.
They also include complaint handling and policyholder-centric management.
The regulations also ensure that the opening or closing of places of business by insurers, both domestically and abroad, is done in a manner that prioritizes the interests of policyholders.