A comprehensive wide case analysis of the role of IRDA in the last decade in respect of General Insurance Industry will aid and help in understanding the details regarding the benefits of the guidelines bestowed upon on the General Insurance Companies by the IRDA as well as to know the problems faced by General Insurance Companies in complying with IRDA regulations.
Rationale of the topic:
Insurance industry in India has come a long way since the time when businesses were tightly regulated and concentrated in the hands of a few public sector insurers. Following the passage of the IRDA Act in 1999, India abandoned public sector exclusivity in the insurance industry in favour of market-driven competition. This shift has brought about major changes to the industry.
This topic will help in identifying the role of IRDA and its impact on the General Insurance Industry since its inception. IRDA plays a vital role in shaping the growth of the insurance industry as whole due to which it is very important to understand how IRDA framed and implemented the policies in order to protect the policy holders and bring transparency in the insurance market.
This is the reason why it is very important to critically analyze the role of IRDA since its inception and find out whether the general insurance companies have strictly adhered to the rules framed by IRDA and followed it without any problems faced.
Research Methodology:
Research method : Descriptive Research
Sampling tool : Questionnaire
Data collected : primary
Statistical tool used : Microsoft excel
Data collection method
Primary data: the primary data will be collected by means of a survey. Questionnaire will be prepared and the General Insurance companies will be approached to fill up the questionnaire. The filled up information will later be analyzed to obtain the required information.
Hypothesis
Null:
H0: Guidelines framed by the regulator are useful.
Alternative:
H1: Guidelines framed by the regulator is not useful.
Null:
H0: IRDA treats all the insurance companies both Public and
Private, equally and fairly.
Alternative:
H1: IRDA doesn't treat all the insurance companies both
Public and Private, equally and fairly.
Data Analysis & Interpretation
Q1. Insurance Regulations includes all the objective of insurance business.
Code
Response
Frequency
Precentage
1
Agree
10
100
2
Disagree
0
0
According to the survey collected from 10 respondents one each from 10 general insurance companies, it was found that the regulations framed by IRDA includes all the objective of insurance business.
Q2. Regulator Examines the documents thoroughly before issuing a license to any new insurance company.
Code
Response
Frequency
Precentage
1
Agree
10
100
2
Disagree
0
0
As per the pie chart above, we can easily interpret that all the respondents agree on the fact that the regulator examines the documents thoroughly before issuing a license to any new insurance company.
Q3. Insurance Companies are able to meet the capital requirement set by the regulator.
Code
Response
Frequency
Precentage
1
Agree
10
100
2
Disagree
0
0
The response on the capital requirement is that Insurance Companies are able to meet the capital requirement set by the regulator as responded by the survey respondents.
Q4. True disclosure of the working of insurance company ensures the soundenss of the business of the
Insurance company.
Code
Response
Frequency
Precentage
1
Agree
10
100
2
Disagree
0
0
According to the respondents, all of them agree to the fact that true disclosure of the working of insurance company does always ensures the soundness of the business of the insurance company thus showing transparency in the workings of insurance companies.
Q5. Regulator has a very important role in the selection of the management.
Code
Response
Frequency
Precentage
1
Agree
2
20
2
Disagree
8
80
As the chart speaks for itself, we can clearly see that 80% of the respondents does not agree to the fact that regulator has a very important role in the selection of the management as opposed to 20% who agree to the statement. This shows that regulator is not so important when it comes to the selection of management.
Q6. Guidelines framed by the regulator are useful
Code
Response
Frequency
Precentage
1
Agree
9
90
2
Disagree
1
10
According to the survey conducted, it shows that 90% of the respondents feel that guidelines framed by the regulator are useful whereas 10% feels it is not useful meaning that majority of the insurance companies feel that the guidelines are very useful for insurance companies to sustain and grow in the market.
Q7. Filing a new product with regulator for approval is easy.
Code
Response
Frequency
Precentage
1
Agree
1
10
2
Disagree
9
90
The survey on the filing of new conducted concluded with 90% denying the fact that filing a new product with the regulator for approval is easy meaning that they feel it is difficult to file a new product. Only 10% feels it is easy which is quite bad.
Q8. Setting up of the customer grievance cell as the directives by the regulator helps in satisfying the policy holders and getting more business for the company.
Code
Response
Frequency
Precentage
1
Agree
9
90
2
Disagree
1
10
90% respondents feel that setting up of the customer grievance cell as directed by the regulator helps in satisfying the policy holders and getting more business for the company where as 10% of the respondents doesn't support the statement.
Q9. Establishment of the IRDA to regulate the insurance industry was a wise step taken by the government of India in order to protect the policy holder's interest and insurance industry as a whole.
Code
Response
Frequency
Precentage
1
Agree
10
100
2
Disagree
0
0
The above pie chart shows that all the insurance companies that were surveyed feels that establishment of the IRDA to regulate the insurance industry was a wise step taken by the government of India in order to protect the policy holder's interest and insurance industry as a whole.
Q 10. IRDA treats all the insurance companies both public and private equally and fairly.
Code
Response
Frequency
Precentage
1
Agree
10
100
2
Disagree
0
0
All the 100% respondents agree to the fact that IRDA treats all the insurance companies both public and private equally and fairly.
Q11. IRDA takes strict actions on insurance companies for non-compliance with the regulator.
Code
Response
Frequency
Precentage
1
Agree
10
100
2
Disagree
0
0
According to the pie chart, we can easily come to a conclusion that all the respondents from 10 general insurance companies accepts that IRDA is very strict and that it takes strict actions on insurance companies for non-compliance with the regulator.
Findings
Insurance Regulations does include all the objectives of insurance.
IRDA always examines the documents thoroughly before issuing a license to any new insurance company.
Regulator doesn't have much role in the selection of management according to the general insurance companies.
Guidelines framed by the regulator are very useful for the insurance companies.
Filing a new product with the regulator for approval is not at all easy.
Establishment of the IRDA to regulate the insurance industry was a wise step taken by the government of India in order to protect the policy holder's interest and insurance industry as a whole.
IRDA treats all the insurance companies both public and private equally and fairly.
IRDA takes strict actions on insurance companies for non-compliance with the regulator.
Suggestions
Since regulator doesn't have important role in the selection of the management, I think the regulators should take part in the selection of the management so that there is a fair and transparent management.
Since filing of a new product for approval from the regulator is not so easy, IRDA should take into account such problems and issues so that various types of products are available immediately in the market which would help the customer choose the best suited product.
IRDA can try to increase their man power and examine the new products filed thoroughly in a quick moment.
Although guidelines framed by the regulator are useful, few insurance companies feel it is not due to which IRDA should also take the consent of the insurance companies for sharing their ideas on the guidelines, then note it down and if the regulator feels it is valid, then adapt that guideline.
Conclusion
The study of the topic "Critical Analysis of the Role of Regulator (IRDA) in the Last Decade in Respect of General Insurance Companies" it was found that regulator plays a very vital role in protecting the policy holder's interests as well as growing and shaping the insurance industry as a whole. It was also found out that establishment of IRDA to regulate the insurance industry was a wise step taken by the Government of India as well as the most important factor for IRDA to be a very prominent and successful regulator is due to the hard work and wise & firm decisions and steps taken by the Government as well as the Management of the regulator.
The study also found out that there was not much gaps and flaws in the functioning of the regulator since the regulator has properly framed the guidelines taking into account the customers protection and the Insurance Industry's protection as a whole. The general insurance companies are all satisfied with decisions taken by IRDA and do appreciate the presence of IRDA.
So finally, it is concluded that IRDA as a regulator does play a very important role in shaping the whole insurance industry and that IRDA should maintain the same henceforth so that even the new insurance companies would also stick to the norms and proper procedures.
