The Insurance Regulatory and Development Authority of India (IRDAI) has directed life and general insurance companies to extend cover to certain identified Gram Panchayats.
This has been made mandatory under IRDAI’s master circular on rural, social and motor third party obligations (dated 10.05.2024) issued under Section 34 of the Insurance Act, 1938, Section 14 of the IRDA Act, 1999 and Regulation 9 of the Insurance Regulatory and Development Authority of India (Rural, Social Sector and Motor Third Party Obligations) Regulations, 2024.
The aforementioned Master Circular is applicable to all life, general and stand-alone health insurers.
As per IRDAI’s master circular, the Life Insurance Council, after Ministry of Panchayat Raj’s consultation, will indicate the minimum number of Gram Panchayats to each life insurer on mutually agreed parameters (such as market share).
According to IRDAI, once the number of Gram Panchayats to be covered by each insurance company is determined, the insurance companies can identify them in a State according to their choice for fulfilling the obligations.
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To identify the Gram Panchayats for extending the health cover, Motor Third Party (MTP) insurance and the dwelling shops, the General Insurance Council will take up a similar exercise.
“To achieve the goal of full saturation of the Gram Panchayat, the insurance companies should work in close coordination with the Gram Sarpanch and Gram Sachivalya,’‘ the IRDAI said.
About IRDAI
The Insurance Development Authority of India (IRDAI) plays an essential role in the insurance sector’s regulation and development. It was founded in 1999 as an autonomous and statutory body and has since been serving as the primary regulator for the insurance industry in India. IRDAI ensures that the policyholders get fair treatment and their interests are protected.