• Life Insurance Laws in India 2023

    Life Insurance
    • Premiums as low as Rs.17/day for sum assured of Rs.1 crore*
    • Claim up to Rs. 1,50,000 deduction under section 80C**
    • Choose between annual and monthly premium payment options

    There are various insurance companies in India which provide life insurance products to its customers depending on their varying needs based on the number of policies sold by them and the premiums paid by their customers, these insurance companies are able to measure the success of their business. However, the insurance companies while selling life insurance products also have to bear in mind the various laws that they are governed by. They simply cannot sell their products for a price they deem fit and have to take into account the needs of their customers before selling a plan. We will have a look at some of the laws related to life insurance in India.

    Insurance Regulatory and Development Authority of India (IRDAI)

    Insurance Regulatory and Development Authority of India (IRDAI) is the controlling body which regulates the rules and regulations related to insurance in India. It is a government body and some of its functions are given below:

    • It takes care of the disputes between the insurer and the insured.
    • IRDAI not only regulates laws but also ensures the promotion of the insurance laws in India.
    • The regulatory body also prescribes new regulations with respect to the investment of funds by the insurance companies in India.
    • IRDAI regulates and ensures that the margin of solvency is maintained.

    Apart from the IRDAI, there are other bodies which function in order to ensure that laws related to insurance is maintained and the insurance industry functions in a smooth and orderly manner. These bodies are:

    • Insurance Association of India: All the insurance companies in India who are conducting business and selling insurance products are a part of the Insurance Association of India. The function of the Insurance Association of India is to advise and assist the insurers and help them set up a standard code of conduct and ensure that they conduct their business practices in a fair manner.
    • Tariff Advisory Committee: This body controls and regulates not only the rates but also the benefits and terms and conditions offered by the insurance companies in India.
    • Ombudsmen: The main function of Ombudsmen is to not only ensure that the business conducted by insurance company happens in a smooth and fair manner but also look into the customers’ complaints related to claim settlement and addressing their grievances.

    Important laws related to insurance in India

    We will have a look at some of the laws and regulations related to insurance that you must be aware of:

    • Insurance Act, 1938: These are the basic insurance laws that the insurance companies in India must comply with while conducting their business for insurance and reinsurance. This law also provides provisions related to insurance to the regulatory bodies, insurance associations, and other councils and committees.
    • Insurance Regulatory and Development Authority (IRDA) Act, 1999: This law mentions the rights, duties, and the functions of the IRDA under Section 14 of the IRDA Act, 1999 that the IRDA is supposed to carry out. The law clearly states that IRDA is to regulate, promote, and ensure that the insurance business in India grows in a fair and orderly manner. This law also lays down the code of conduct that insurance intermediaries are supposed to follow.
    • The Insurance Rules, 1939: This law ensures that the various appointment of committees, licensing of intermediaries and the rules related to the process is followed by the insurance companies while conducting business related to insurance.
    • The Redressal of Public Grievances Rules, 1998: This law states that the insurance company will address the grievances of its customers in accordance with the rules and regulations stated under the law. The law clearly states the procedures that the insurance company must follow while addressing its customer’s grievances.
    • Amendment of Insurance Act, 2015: There were certain amendments made in the Insurance Act with the aim of boosting the insurance sector in India. One of the aims behind the amendment of the act was to increase the FDI from 26% to 49%.

    Hence, these are some of the laws related to life insurance that you must be aware of. Being aware of these laws helps you make better decisions when it comes to purchasing a life insurance policy. You can also visit the official website of the IRDAI in order to get acquainted with the laws related to life insurance in detail and have a better understanding of your rights as a policyholder.

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