Insurance Regulation in India

Insurance Regulation in India

• The Insurance industry in India was initially regulated by the Controller of Insurance under the Insurance Act 1938.
• The Insurance Regulatory and Development Authority of India (IRDA) is responsible for regulating the industry.

Insurance Market

• The Indian market for terrorism risk insurance was formed in April 2002.
• The initial limit of indemnity per location was ₹750 crores, which was increased to ₹1500 crores in April 2014.
• The total premium collected by the pool in 2014-15 was ₹472.33 crores.

India Motor Third Party Declined Risk Insurance Pool

• The IRDA set up the India Motor Third Party Declined Risk Insurance Pool (DR Pool) in April 2012.
• The pool covers liability only for commercial vehicles that are declined by an insurer.
• The risk is shared by the ceding company, GIC, and the pool in the ratio of 20:5:75.
• The total premium received by the pool in 2014-15 was ₹317 crores.

Regulatory Environment

• The Insurance Act, 1938 and its Rules and Regulations govern the industry.
• The Insurance Regulatory and Development Authority (IRDA) Act, 1999 is another key governing law.
• IRDA regulations also play a crucial role in shaping the industry.
• Tax laws affecting premium and claim proceeds treatment also impact the industry.
• Inheritance laws, which vary between communities and states, also have an influence.