Duties,Powers and Functions of IRDA

About IRDA

Duties,Powers and Functions of IRDA


Section 14 of IRDA Act, 1999 laysdown the duties,powers and functions of IRDA..(1)    Subject to the provisions of this Act and any other law for the time being in force, the Authority shall have the duty to regulate, promote and ensure orderly growth of the insurance business and re-insurance business.
(2)    Without prejudice to the generality of the provisions contained in sub-section (1), the powers and functions of the Authority shall include, -
    (a) issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration;
    (b) protection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance;
   (c) specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents;
    (d) specifying the code of conduct for surveyors and loss assessors;
    (e) promoting efficiency in the conduct of insurance business;
    (f) promoting and regulating professional organisations connected with the insurance and re-insurance business;
    (g) levying fees and other charges for carrying out the purposes of this Act;
   (h) calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organisations connected with the insurance business;
   (i) control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938);
   (j) specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries;
    (k) regulating investment of funds by insurance companies;
    (l) regulating maintenance of margin of solvency;
    (m) adjudication of disputes between insurers and intermediaries or insurance intermediaries;
    (n) supervising the functioning of the Tariff Advisory Committee;
  (o) specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organisations referred to in clause (f);
    (p) specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector; and
    (q) exercising such other powers as may be prescribed


Below Poverty Line is an economic benchmark and poverty threshold used by the government of India to indicate economic disadvantage and to identify individuals and households in need of government assistance and aid. It is determined using various parameters which vary from state to state and within states.

Gross domestic product

The gross domestic product (GDP) or gross domestic income (GDI) is a measure of a country's overall economic output. It is the market value of all final goods and services made within the borders of a country in a year. It is often positively correlated with the standard of living,[1] though its use as a stand-in for measuring the standard of living has come under increasing criticism and many countries are actively exploring alternative measures to GDP for that purpose.[2]
Gross domestic product comes under the heading of national accounts, which is a subject in macroeconomics. Economic measurement is called econometrics.


International Monetary Fund

The International Monetary Fund (IMF) is the intergovernmental organization that oversees the global financial system by following the macroeconomic policies of its member countries, in particular those with an impact on exchange rate and the balance of payments. It is an organization formed with a stated objective of stabilizing international exchange rates and facilitating development through the enforcement of liberalising economic policies[1][2] on other countries as a condition for loans, restructuring or aid.[3] It also offers highly leveraged loans, mainly to poorer countries. Its headquarters are in Washington, D.C., United States. The IMF's relatively high influence in world affairs and development has drawn heavy criticism from some sources




Life Insurance | Insurance against risk of loss to one's life is covered under Life Insurance. Life insurance is also known as long term insurance or life assurance. It includes Whole Life Assurance, Endowment Assurance, Assurances for Children, Term Assurance, Money Back Policy etc. To buy or get information on life insurance products offered by us, please click on the link above.

General Insurance |
Insurance against risk of loss to assets like car, house, accident etc. is covered under General or Non-life Insurance. General insurance includes fire insurance, marine insurance, motor insurance, theft insurance, health insurance, personal accident insurance etc. To buy or get information on life insurance products offered by us, please click on the link above.

Basic Difference between Life Insurance and General Insurance
Life insurance includes plans which are directly related with the person's life. On the other hand, general insurance deals with plans which are not related to the life of the person. General insurance plans seek to provide protection against loss to a person's assets or health and not to his/her life. To learn more about different types of insurance policies, please click on the link.



Qualities of an Effective Sales Person

The sales team of a Company is its backbone. After all it is the sales person who is the face of the firm and interacts with prospective consumers. Whether we talk about door to door selling or over the counter sales, the sales person is always under pressure to meet rising sales targets.   
The sales presentation requires a sales man to be a friend, a guide, an advisor and sometimes a reformer to the customer. 
Here are a few qualities that define an effective sales person -
  • Goal Oriented - The driving force behind every Company is increased sales and high profits. Most Companies draw out expected sales targets for every year. The onus lies on the sales team to not only meet these targets but go beyond them. Every sales person must be goal oriented and should work towards matching these sales figures.
  • Confident - A sales person should be confident about the product he is selling as well as his own ability to successfully close a sale. Especially in the case of door to door selling, the sales person should be able to interact well with the prospective buyer, gain their trust, arouse an interest and eventually convince them to try a new product. Sales persons should be willing to handle all kinds of tense situations.
Patient & Courteous - Convincing a prospective customer to buy a product is not an easy task. Selling is an art and requires patience. A sales person should be able to guide a customer through the entire process which begins with a prospective buyer's indifferent attitude towards a brand and ends with them placing an order. The sales person should be courteous and pleasant while taking a buyer through these stages
  • Team Player - A good sales executive must be a good team player as well. An ability to interact and devise good sales plans should come naturally to him.
  • Complete Product Knowledge - Every sales executive should be trained well. He should have complete product knowledge including benefits, uses and applications of each product. A good background knowledge will help him to answer all types of questions raised by a prospective buyer. 
    • Pleasing Personality - A pleasing personality adds to a sales person's appeal. He/she should be pleasant to interact with and should know how to convince and persuade a customer to place an order.
    If you are looking forward to a career in the sales field, make sure that you cultivate these qualities in you. All the best!

 


private Insurance Companies In India






WHY SHOULD I BUY INSURANCE ?

All assets have some economic value attached to them. No person can deny that there is also a possibilty that these assets may get damaged/destroyed or become non-operational due to risks like breakdowns, fire, floods, earthquake etc. Different assets are exposed to different types of risks like a car has a risk of theft or meeting an accident, a house is exposed to risk of catching fire, a human is exposed to risk of death/accident. Insurance is needed because of following reasons:

Social Security Tool
Insurance acts as an important tool providing a sense of security to the society on a whole. It is the right of every human-being to have basic amenities like food, clothing, housing, medical care, standard of living necessary for his personal and family's well being, and right to security in case of unemployment, disability, sickness or any other circumstances out of his control.

In case the bread earner of a family dies, the family suffers from direct financial loss as family's income ceases. As a result, family's economic condition gets affected unless there are other arrangements to rescue the family from this situation. Life insurance is one alternate arrangement that offers some respite to the family from financial distress. Otherwise this family would have been pushed into the lower strata of the society, which would be an additional cost to the society. This is because subsidies would have to be given to the family so as to enable it to survive and enjoy the basic rights at par with other people. Moreover, a poor family is generally seen to have a large family size with family members being illiterate. This on a whole affects the society and is a cost to the society. Therefore, insurance compliments the state in social management efforts.

Uncertainty
The basic need of insurance arises as risks are uncertain and unpredictable in nature. Getting insurance for an asset does not mean that the asset is protected against risks or its exposure to risk is reduced, but it actually implies that in case the asset suffers any loss in value due to such risk, the insurance company bears the loss and compensates the insured by making payment to him.

Economic Development
The premium paid by people to the insurance companies is a part of their savings. Insurance, thus, acts as a useful instrument in promoting savings and investments, particularly within the lower-income and middle-income families. These savings are ultimately used as investments fuelling economic growth.

General Purposes of Insurance
Insurance is widely popular and beneficial because of its following general purposes:
1. Protection or safety (Term insurances) : These plans are best suited for people aged upto 35 years as it provides higher protection at low cost. These plans are also beneficial for a person whose income is low and want to secure their family from financial default in case of his death.
2. Marriage or education of the child (Children plans)
3. Speedy growth of money & risk cover (Unit Linked Plans)
4. Saving and Protection (Endowment type plans)
5. Saving, protection & liquidity (Money back plans)

The above purposes apply for life insurance. In case of General insurance the basic purpose is to protect the insured against financial loss suffered by him or creation of liability, due to the causes covered by the policy.
 


Basics of Insurance

Meaning of Insurance
Insurance provides financial protection against a loss arising out of happening of an uncertain event. A person can avail this protection by paying premium to an insurance company.

A pool is created through contributions made by persons seeking to protect themselves from common risk. Premium is collected by insurance companies which also act as trustee to the pool. Any loss to the insured in case of happening of an uncertain event is paid out of this pool.

Insurance works on the basic principle of risk-sharing. A great advantage of insurance is that it spreads the risk of a few people over a large group of people exposed to risk of similar type.

Definition
Insurance is a contract between two parties whereby one party agrees to undertake the risk of another in exchange for consideration known as premium and promises to pay a fixed sum of money to the other party on happening of an uncertain event (death) or after the expiry of a certain period in case of life insurance or to indemnify the other party on happening of an uncertain event in case of general insurance.

The party bearing the risk is known as the 'insurer' or 'assurer' and the party whose risk is covered is known as the 'insured' or 'assured'.

Concept of Insurance / How Insurance Works
The concept behind insurance is that a group of people exposed to similar risk come together and make contributions towards formation of a pool of funds. In case a person actually suffers a loss on account of such risk, he is compensated out of the same pool of funds. Contribution to the pool is made by a group of people sharing common risks and collected by the insurance companies in the form of premiums.

Lets take some examples to understand how insurance actually works:
Example 1 Example 2
SUPPOSE
  • Houses in a village = 1000
  • Value of 1 House = Rs. 40,000/-
  • Houses burning in a yr = 5
  • Total annual loss due to fire = Rs. 2,00,000/-
  • Contribution of each house owner = Rs. 300/-
SUPPOSE
  • Number of Persons = 5000
  • Age and Physical condition = 50 years & Healthy
  • Number of persons dying in a yr = 50
  • Economic value of loss suffered by family of each dying person = Rs. 1,00,000/-
  • Total annual loss due to deaths = Rs. 50,00,000/-
  • Contribution per person = Rs. 1,200/-
UNDERLYING ASSUMPTION
All 1000 house owners are exposed to a common risk, i.e. fire
UNDERLYING ASSUMPTION
All 5000 persons are exposed to common risk, i.e. death
PROCEDURE
All owners contribute Rs. 300/- each as premium to the pool of funds
Total value of the fund = Rs. 3,00,000 (i.e. 1000 houses * Rs. 300)
5 houses get burnt during the year
Insurance company pays Rs. 40,000/- out of the pool to all 5 house owners whose house got burnt
PROCEDURE
Everybody contributes Rs. 1200/- each as premium to the pool of funds
Total value of the fund = Rs. 60,00,000 (i.e. 5000 persons * Rs. 1,200)
50 persons die in a year on an average
Insurance company pays Rs. 1,00,000/- out of the pool to the family members of all 50 persons dying in a year
EFFECT OF INSURANCE
Risk of 5 house owners is spread over 1000 house owners in the village, thus reducing the burden on any one of the owners.
EFFECT OF INSURANCE
Risk of 50 persons is spread over 5000 people, thus reducing the burden on any one person.

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