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IRDAI: full form, functions and exam facts
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IRDAI is the Insurance Regulatory and Development Authority of India, the statutory regulator of the insurance industry. It was set up under the IRDA Act, 1999 and began functioning as a statutory body in April 2000. Its head office is in Hyderabad, to which it moved from Delhi in 2001. Its job is to protect policyholders, regulate insurers and promote the orderly growth of the sector.
What IRDAI regulates
- Life, general (non-life) and health insurers, and reinsurers
- Insurance intermediaries: brokers, corporate agents (including banks), agents, third-party administrators and surveyors
- Policy terms, solvency margins, investment norms and grievance redressal
- Licences: no insurer can operate without IRDAI registration
The main laws are the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the IRDA Act, 1999.
Board
The authority has a chairperson, up to five whole-time members and up to four part-time members, all appointed by the Central Government.
Foreign investment
The foreign direct investment cap in insurance has risen in steps: 26% at the start, 49% in 2015 and 74% in 2021. Budget 2025-26 proposed raising it further to 100%. Confirm the current limit with the Department of Financial Services or IRDAI, because it is a favourite current-affairs question.
How IRDAI touches banking
Banks sell insurance as corporate agents under IRDAI rules, a practice called bancassurance. Government-backed schemes such as PMJJBY and PMSBY are sold through banks but the insurance itself is provided by insurers regulated by IRDAI.
Example
If a bank branch sells a life policy to a customer, the bank must be registered with IRDAI as a corporate agent, follow its rules on disclosures and cannot mis-sell. If the customer has a dispute with the insurer, the grievance system is under IRDAI's framework, and the Insurance Ombudsman also hears complaints.
How bank exams ask about it
Look for "IRDAI headquarters" (Hyderabad), "year of formation", "regulator of insurance", and the FDI cap in insurance. Regulator-matching questions pair IRDAI with SEBI, PFRDA and the RBI. Learn them as a group in banking awareness, with the SEBI details at SEBI.
Where to check
irdai.gov.in publishes the Act, regulations, circulars and annual reports.
Frequently asked questions
Is IRDAI part of the RBI?
No. It is a separate statutory authority under the Ministry of Finance.
Who regulates the LIC?
IRDAI regulates LIC as an insurer, like any other life insurance company, while LIC is governed by the LIC Act, 1956 and owned by the government.
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