Insurance sector & consumer protection Act

 

INSURANCE SECTOR & CONSUMER PROTECTION ACT

 

As per official reports and statistics, the Indian insurance sector consists of

68 insurance companies, out of which 24 provide life insurance, 27 provide

general insurance, 6 provide health insurance and the remaining 11 are

re-insurers. The gross premiums written in India amounted to Rs. 5.53

trillion out of which Rs. 4.58 trillion were generated through life insurance

and Rs. 1.51 trillion were generated through other insurances.

 

CONSUMER ISSUES

Insurance is necessary for consumers as it provides them with protection

from any unexpected financial loss as it provides them with the means to

recover from such a loss. As a result, consumer grievances must be

addressed:

1. False/misleading information about the insurance plan and the policy.

2. Unfair terms of insurance.

3. Rejection of genuine claims without reason.

4. Delay in grant of compensation upon acceptance of claim.

5. Non-payment of entire amount of claim.

6. Charging of extra premium.

7. Wrongful cancellation of policy.

 

IRDAI

Following the recommendations of the Malhotara Committee Report in

1999, the Insurance Regulatory and Development Authority of India was

established by the Insurance and Regulatory Authority of India Act, 1999.

The purpose of the IRDAI is to act as a regulator of the insurance sector and protect the interests of policyholders.

For grievance redressal, the IRDA offers two channels:

1. The Insurance Ombudsman Scheme allows for out-of-court settlements

for individual policyholders. The appointment, jurisdiction and powers

of the Insurance Ombudsman are given in the Insurance Ombudsman

Rules, 2017.

2. The Integrated Grievance Management System allows consumers to

submit their complaints to the IRDAI which enables it to monitor the

working of the insurance companies.

For the purpose of protecting the interests of the consumers, the IRDAI has

passed many regulations, some of which have been discussed below.

1. The IRDAI (Re-insurance) Regulations, 2018 lays down the process for

re-insurance.

2. The IRDAI (Insurance Brokers) Regulations, 2018 amended the existing

regulations in order to supervise the functioning of the insurance

broker.

3. The IRDAI (Protection of Policyholders Interests) Regulations, 2017

expands the applicability of these regulations to micro-insurance agents,

IMF, web aggregators and insurance repositories.

4. The IRDAI (Appointed Actuary) Regulations, 2017 lays down the duties

and obligations of appointed actuaries.

5. The IRDAI (Outsourcing of activities by Indian Insurers) Regulations,

2017 lays down restrictions on the type of activities which can be

Out sourced by Indian insurers.

6. The IRDAI (Insurance Web Aggregators) Regulations, 2017 deals with

duties and obligations of insurance web aggregators.

7. The IRDAI (Health Insurance) Regulations, 2016 amends the existing

regulation in order to comprehensively deal with health insurance

providers in India.

8. The IRDAI (Issuance of e-Insurance Policies) Regulations, 2016 lays

down the procedure for issuance of e-insurance policies by insurance

providers.