Under international supervisory guidelines prescribed by the International Association of Insurance supervisors, one of the requisite parameters for a home regulator is to be operationally independent, transparent and ac

One of the core principles internationally adopted by International Association of Insurance Supervisors (IAIS) is to ensure the Regulators' Independence and make its role transparent and accountable. All the home supervisors in the area that are members of IAIS to ensure that the supervisor adhere to the accepted and recognized cannons of supervisory procedure. The independence of the regulator is one of these. Independence of the regulator can be ensured broadly in two main areas- the technical and the financial administrative areas. As far as IRDAI is concerned both these areas have been recognized and ensured to be adopted either by law or by procedure. As regards the technical area, the authority is to consist of members, directors from various areas of technical attainments and proficiency. The members including the Chairman who enjoys supervising powers of the Authority itself are appointed by the Central Government on the basis of fit and proper criterion. Professional qualifications and experience are necessary. The IRDAI enjoys complete freedom in the matter of regulating the business of insurance in India. It also has the powers to grant registration to the new players. The powers to make regulations to govern the market are wholesome except that the regulations have to be placed before the advisory committee which is appointed by the Chairman of the Authority. The Act clearly states that in all technical matters the decision of the Authority is final. There can be no interference from the government. In all administrative matters, the Government after hearing the Authority can express its views. The Authority will produce an Annual Report that has to be presented to the Parliament. As regards financial freedom, the Authority does not receive any grant from the Government. The Authority has been permitted by the Act to raise and levy fees as percentage of the premium income of the insurers which is used for its administration and maintenance. Here again the maximum of such fees has been laid down that enables the Authority to be free from the influence of any large or significant insurer. It is thus seen that the enactment of the Insurance and the IRDA Act has ensured the independence of the Authority from the influence of the Government and also of the insurers.