Prelims – 26th Nov 23

Insurance Regulatory and Development Authority of India (IRDAI)

Autonomous and statutory body established under the IRDA Act 1999
Apex body that supervises and regulates the insurance sector in India
1 Chairman + 5 Full time members + 4 Part time members
Nodal Ministry: Ministry of Finance
HQ: Hyderabad
Insurance Sector = 10th Largest market globally
In India, Life insurance sector >> non-life insurance sector
In India, Insurance Penetration has been steadily increasing (from 2.7% in 2000 to 4.2% in 2021.
- Insurance Penetration is the Ratio of total insurance premiums to gross domestic product in a given year.
Insurance density in India stands at $91 (Life $69 and Non-life $22)
- Insurance Density is Ratio of total insurance premiums to whole population of a given country in a given year.
Recently, IRDAI has relaxed norms for ‘surety bonds’ to expand surety insurance market by increasing availability of such products.
- A surety is a promise that financial obligations will be met if one party defaults.
- Surety Bond is a type of insurance policy protecting parties involved in a transaction or contract from potential financial losses due to a breach of contract or other types of non-performance.

Insurance Information Bureau of India (IIB)

It was established by IRDAI in 2009
It is registered as an independent society under Andhra Pradesh societies registration act, 2012
It acts as a single platform maintaining a repository and analytics of insurance sector related information in India.

To remit money across the border, without seeking specific approvals.
Under the Reserve Bank of India’s (RBI) LRS, all resident individuals, including minors are allowed to remit up to $250,000 in a financial year under various heads
The residents can also transfer money for capital account transactions under LRS
It was first introduced in 2004 and there are no restrictions on the frequency of remittances (available in any freely convertible foreign currency) under LRS
It is not available to corporates, partnership firms, HUF, Trusts, etc
Under this, people cannot send money to countries identified as ‘non-cooperative’ by the Financial Action Task Force and to entities identified as posing terrorist risks
LRS restricts buying and selling of foreign exchange abroad, or purchase of lottery tickets or sweep stakes, proscribed magazines and so on
Recently, under the RBI’s Liberalised Remittance Scheme (LRS), the finance ministry has included the overseas use of credit card by an Indian resident within the $250,000 limit
Until now, a provision in the Foreign Exchange Management (Current Account Transactions) (FEM(CAT)) Rules, 2000 excluded resident Indian’s overseas use of credit cards during foreign travel from the $250,000 cap
Debit card transactions abroad are already accounted for in LRS.

Foreign Exchange Regulation Act 1973

Its main purpose was to regulate the foreign exchanges so as to maintain a satisfactory account of the foreign reserves in the country.
FERA was related to restricting and regulating foreign exchange while FEMA was enacted to manage the foreign exchanges.
Everything was restricted unless permitted.

Under the Rules of Rajya Sabha, the Chairman nominates from amongst the members a panel of vice-chairpersons
Any one of them can preside over the House in the absence of the Chairman or the Deputy Chairman
He/she has the same powers as the Chairman when so presiding.
He/she holds office until a new panel of vice-chairpersons is nominated.
When a member of the panel of vice chairpersons is also not present, any other person as determined by the House acts as the Chairman.
It must be emphasised here that a member of the panel of vice chairpersons cannot preside over the House, when the office of the Chairman or the Deputy Chairman is vacant.
During such time, the Chairman’s duties are to be performed by such member of the House as the president may appoint for the purpose. The elections are held, as soon as possible, to fill the vacant posts.