UNIT 5 IRM

What is the primary purpose of the IRDA Act 1999?

• To regulate and promote the insurance industry in India.

• To create a national insurance policy for all citizens.

• To provide tax benefits for insurance companies.

• To eliminate all private insurance providers in India.

List two key duties of the Insurance Regulatory and Development Authority (IRDA).

• Conducting medical examinations for policyholders.

• 1. Regulating the insurance industry to ensure financial stability. 2. Protecting the interests of policyholders.

• Setting insurance premiums for all companies.

• Providing legal advice to insurance companies.

What powers does the IRDA have in regulating insurance companies?

• The IRDA provides direct financial assistance to insurance companies.

• The IRDA is responsible for marketing insurance products directly to consumers.

• The IRDA regulates insurance companies by issuing licenses, setting financial and operational standards, approving premium rates, and ensuring policyholder protection.

• The IRDA sets global insurance rates for all countries.

Explain the role of IRDA in protecting insurance policyholders.

• IRDA does not have any role in consumer complaints or grievances.

• IRDA only provides insurance policies to government employees.

• IRDA protects insurance policyholders by regulating the insurance industry, ensuring fair practices, and providing a grievance redressal mechanism.

• IRDA is responsible for setting insurance premiums for all policies.

What are prudential norms in the context of the IRDA?

• Prudential norms are customer service standards set by insurance firms.

• Prudential norms are marketing strategies used by IRDA.

• Prudential norms are voluntary guidelines for insurance companies.

• Prudential norms are regulatory guidelines by IRDA to ensure the financial stability and soundness of insurance companies.

How does the IRDA ensure the financial stability of insurance companies?

• The IRDA allows insurance companies to operate without any regulations.

• The IRDA provides loans to insurance companies.

• The IRDA sets interest rates for insurance policies.

• The IRDA ensures financial stability by enforcing capital requirements, conducting audits, and monitoring solvency.

What is the significance of the Insurance Policyholders' Protection Fund?

• It provides tax benefits to insurance companies.

• It regulates insurance premiums to ensure affordability.

• It protects policyholders by providing compensation in case of insurer insolvency.

• It guarantees high returns on investments for policyholders.

Describe the process of licensing insurance companies under the IRDA Act.

• Insurance companies are licensed through a public voting process.

• The IRDA Act requires insurance companies to operate without any regulatory oversight.

• The process of licensing insurance companies under the IRDA Act involves application submission, document verification, assessment of fit and proper criteria, payment of licensing fees, approval process, and issuance of the license.

• Licensing is done solely based on the company's profit margins.

What are the main functions of the IRDA?

• Regulating and promoting the insurance industry, protecting policyholder interests, ensuring financial soundness of insurers, and promoting fair competition.

• Providing loans to small businesses

• Setting interest rates for banks

• Regulating stock market investments

How does the IRDA contribute to the development of the insurance sector in India?

• The IRDA focuses solely on international insurance markets.

• The IRDA regulates and promotes the insurance sector, ensuring consumer protection and market growth.

• The IRDA only provides financial assistance to insurance companies.

• The IRDA is responsible for setting insurance premiums in India.