ANNUAL REPORT 2007-08
A circular was issued on 28th December 2006 to all life insurers advising them that the decision for closure/relocation of their places of business should be after due consideration of all the factors including the possible inconveniences to its clientele. It is essential that the Board is appraised of such decisions with appropriate reasons, since the proposal for opening the branches/offices were initially approved by the Board. Adequate notice of a minimum of 2 months on the proposed relocation/closure should be given to policyholders serviced by that branch along with the alternate arrangements
being made to service them.
organizations connected with insurance and reinsurance business:
Institute of Insurance and Risk Management was established as a joint venture of IRDAand Government of Andhra Pradesh for providing opportunities to students wishing to pursue Diploma in Insurance. A distance learning wing was also opened at IIRM. Recognising the need for more actuaries in the insurance industry, International School of Actuarial Sciences was established at IIRM. A seminar on grievances redressal of insurance sector was organised so as to educate the public on grievances redressal mechanism followed by IRDA. The Authority also conducted a Seminar on the accounting issues of Insurance companies in coordination with the Institute of Chartered Accountants.
The Life Insurance Council and the General Insurance Councils are the platforms available for the industry participants to interact and to set up practices for the healthy growth of the industry. Development of these self regulatory bodies augurs well for the industry to put across its view point on critical areas for the growth of the industry. In the same context, brokers licensed by the Authority is necessarily required to be a member of the Insurance Broker Association of India (IBA). IBA conducted an Annual Conference during 2007-08. The Association is functioning as a Self Regulatory Organization (SRO) with a Disciplinary Committee in place. A representative of the Authority is also a member of the Committee. During 2007-08 The IRDA has promoted the establishment of the Indian Institute of Insurance Surveyors and Loss Assessors (IIISLA) in order to promote
professionalism amongst surveyors. The Promotee Council of IIISLA has handed over the functioning of the Institute to the First Council that consists of elected as well as nominated members. During the Financial Year 2007-08, the Elected Council met 4 times.
Levying fees and other charges for carrying out
the purposes of the Act
The Authority in terms of powers vested by section 3 of the Insurance Act levies both registration and renewal fees from the insurers and various intermediaries associated with the insurance business. However, registration fee of Rs.50,000/- (Fifty Thousand only) is charged at the time of granting of registration certificate and not thereafter. The renewal of registration fees for insurer stand at 10 per cent of 1 per cent of the Gross Direct Business Written in India (GDPI) or Rs. 50,000 (Fifty thousand only) subject to maximum of Rs. 5 crores. In case of re-insurer the fee is chargeable based on the facultative business written by the re-insurer in India. This follow amendment of regulation 20 of IRDA (Registration of India Insurance Companies) Regulations, 2000 issued in February, 2003 after obtaining the approval ofAdvisory Council.
Later a Gazette Notification was issued..
inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organizations connected with the insurance business
The financial year 2007-08 was the eighth year of operations of insurance companies, post opening up of the sector. While the Authority has been contemplating commencement of comprehensive on-site inspection, it was considered that the registered entities should be allowed time to stabilize operations prior to taking on full scale inspection. In the meantime, as an interim measure, based on concerns which arose at different points in time, the Authority has taken up targeted on-site inspections. Other than targeted inspections (including those related to market conduct issues), the Authority has been carrying on Investment Audit of the regulated insurance entities effective for the financial year 2001- 02 onwards.