Explain IRDA act?

Ans: insurance regulatory and development authority (IRDA) act 1999 was passed to make
the insurance regulation more efficient and to develop the insurance sector according to the
fast changing global economic changes especially against the liberalization and globalization.
The act empowered the government to establish an authority to protect the interest
of the insurance policy holders. Its purpose is regulated, promote and ensure orderly growth of
insurance industry.
Malhotra committee: The government of India constituted a high power committee
headed by sri. R. N. Malhotra, former governor of the reserve bank of India in april 199. The
committee was entrusted with the responsibility of examining and studying the structure of
insurance sector and recommend ways and methods to make it more efficient and competitive.
The committee submitted its report in January 1994 with a series of
recommendations. The prominent recommendation stressed by the committee was
establishment of a strong and efficient insurance regulatory authority which should be a
statutory and autonomous body on the lines of SEBI.

After a lengthy discussion and further studies, finally in December 1998, the bills
was introduced along with the recommendations of the standing committee on finance and
finally the act came into force in 1999.
Provisions of the Act: The act empowered the central government to establish insurance
regulatory and development authority. It should be a body corporation having perpetual
succession and a common seal with power subject to the provisions of the act. Authority is
managed by a board headed by chairperson appointed by the central government.
The insurance regulatory and development authority empowered to make necessary
amendments to the insurance act 1938, life insurance act 1956 and general insurance business
(Nationalisation) act 1972. consequently the recommended amendments were made in
respective acts.