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IRDAI PERMITS INSURERS TO GRANT THREE MONTHS’ MORATORIUM ON TERM LOANS

Why in news?

The Insurance Regulatory and Development Authority of India (IRDAI) has permitted insurers to grant a moratorium of three months on repayment of term loans sanctioned by them.

Details:

  • Considering the cash flow problems faced by the borrowers and in line with the recent directions of the RBI on moratorium on term loans, insurers are permitted to grant a moratorium of three months towards payment of instalments falling due between March 1 and May 31
  • The rescheduling of payments, including interest, will not qualify as a default for the purpose of reporting of non-performing assets (NPAs).

Background:

About IRDAI:

  • The Insurance Regulatory and Development Authority of India or the IRDAI is the apex body responsible for regulating and developing the insurance industry in India.
  • It is an autonomous body. It was established by an act of Parliament known as the Insurance Regulatory and Development Authority Act, 1999. Hence, it is a statutory body.
  • The IRDAI is headquartered in Hyderabad in Telangana. Prior to 2001, it was headquartered in New Delhi. 

Functions of IRDA

The functions of the IRDA are listed below:

  • Its primary purpose is to protect the rights of the policyholders in India. 
  • It gives the registration certificate to insurance companies in the country.
  • It also engages in the renewal, modification, cancellation, etc. of this registration.
  • It also creates regulations to protect policyholders’ interests in India.

Composition of IRDA

The Section 4 of the Insurance Regulatory Development Authority (IRDA) Act, 1999 specifies the composition of authority which consists of 10 member team appointed by the government of India which includes.

  • One chairman
  • Five whole time members
  • Four part time members
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September 2022
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