IRDA has developed its internal parameters to assess the promoters’ credentials. The promoters’ long term commitment to stay in the market, their ability to bring in new techniques in insurance underwriting and administration are some of the parameters, which are assessed in the first phase. Subsequent to this preliminary assessment, IRDA conducts an in-depth assessment of the business plans submitted by the promoter.
IRDA is the sole authority for awarding licenses. There is no restriction in the number of licenses it can issue, but licenses for life and non-life business are to be issued separately. Licenses are issued only on a national basis. The new players should commence business within 15-18 months of getting the license. A new applicant has to pay a registration fee of Rs 50,000. At the time of renewal of registration every year, a fee of 0.20 per cent of 1 per cent of the gross premium or Rs 50,000 whichever is higher, is levied on the insurers carrying out insurance business in India.
IRDA has prescribed a ‘file and use’ procedure, according to which every insurer is required to file the product and pricing details alongwith copies of standard terms, conditions, and literature. In case of tariff products, the Tariff Advisory Committee is required to file product and pricing details with IRDA, like any other insurance company.
All insurance intermediaries, such as agents and corporate agents, have to undergo compulsory training prior to their obtaining a license. IRDA also specified the minimum educational qualifications for these intermediaries. IRDA conducts examinations and then issues licenses to these agents. IRDA believes that a well trained and informed intermediaries can service the consumers better. IRDA insured or renewed 1,18,154 agents licenses by the end of March 2001. The licensing of Insurance Agents Regulations have specified the qualifications for an insurance agent: hundred hours pre-licensing training, followed by an examination. In addition, for new agents 25 hours training to keep knowledge updated has also been prescribed at the time of renewal of license.
The Insurance Association and Life Insurance and General Insurance Councils have been revived and they are responsible for setting the norms for market conduct, ethical behaviour of the insurers, and breach of regulations. Continuous training has been stipulated to enhance the efficiency of the intermediaries. New players have set up call centres which are functioning on 24/7 basis.
IRDA has recognised the Actuarial Society of India and Insurance Institute of India as nodal organisations responsible for actuarial and insurance education. IRD A has drafted separate bills of the Actuarial Society of India and the Institute of Surveyors and Loss Assessors in order to grant them statutory status.
IRDA has also entered into an MOD with the Indian Institute of Management, Bangalore, to further its objective of insurance research and education. It has set up a risk management resource centre in Bangalore.
IRDA has come out with the Insurance Advertisement and Disclosure Regulations to ensure that the insurance companies adhere to fair trade practices and transparent disclosure norms while addressing the policy holders or the prospects.