REVISION OF THE INSURANCE ACT 1938 by THE LAW COMMISSION OF INDIA
The insurance act has been once amended long back in 1999 at the time of enactment of the Insurance Regulatory Development Authority Act, 1999 (IRDA Act). So recently the Law Commission of India on 16th June 2003 has released a consultation paper on the revision of the Insurance Act, 1938. The commission has suggested for changes in the following areas:
- merging of the provisions of the IRDA Act with the Insurance Act to avoid multiplicity of legislations;
- deletion of redundant and transitory provisions in the Insurance Act, 1938;
- Amendments reflecting the changed policy of permitting private insurance companies and strengthening the regulatory mechanism;
- Providing for stringent norms regarding maintenance of ‘solvency margin’ and investments by both public sector and private sector insurance companies;
- Providing for a full-fledged grievance redressal mechanism that includes:
- The constitution of Grievance Redressal Authorities (GRAs) comprising one judicial and two technical members to deal with complaints/claims of policyholders against insurers .
- Appointment of adjudicating officers by the IRDA to determine and levy penalties on defaulting insurers, insurance intermediaries and insurance agents
- Providing for an appeal against the decisions of the IRDA, GRAs and adjudicating officers to an Insurance Appellate Tribunal (IAT) comprising a judge (sitting or retired) of the Supreme Court/Chief Justice of a High Court as presiding officer and two other members having sufficient experience in insurance matters
- Providing for a statutory appeal to the Supreme Court against the decisions of the IAT
The Law Commission also expressed its willingness to have further consultation with consumer groups, insurers and insurance agents. Also responses by the interested parties were allowed to be directly sent to the Law Commission either by post or email.
The full text of the Consultation Paper is available at the website of the Law Commission at http://lawcommissionofindia.nic.in .