INSURANCE REGULATORY AND DEVELOPMENT
AUTHORITY OF INDIA (OBLIGATIONS OF INSURERS TO RURAL AND SOCIAL SECTORS)
REGULATIONS, 2015
PREAMBLE
In
exercise of the powers conferred by section 32C, read with section 32B of The
Insurance Act, 1938as amended from time to time and subsection (1) of Section
26 of the Insurance Regulatory and Development Authority Act, 1999, the
Insurance Regulatory and Development Authority of India, in consultation with
the Insurance Advisory Committee, hereby makes the following Regulations to
substitute the Insurance Regulatory and Development Authority (Obligations of
Insurers to Rural and Social Sectors) Regulations, 2002, namely:
Regulation 1. Short title and commencement
(1) These
Regulations may be called the Insurance Regulatory and Development Authority of
India (Obligations of Insurers to Rural and Social Sectors) Regulations, 2015.
(2) They
shall come into force from the date of their publication in the Official
Gazette and shall supersede the existing regulations.
Regulation 2. Definitions
In these
regulations, unless the context otherwise requires-
(1) “Act"
means the Insurance Act, 1938 (4 of 1938) as amended from time to time;
(2) "Authority"
means the Insurance Regulatory and Development Authority of India established
under the provisions of Section 3 of the Insurance Regulatory and Development
Authority Act, 1999 as amended from time to time.
(3) "Rural
Sector" means the places or areas classified as "rural" while
conducting the latest available decennial population census (Census of India);
(4) "Social
Sector" includes unorganised sector, informal sector, economically
vulnerable or backward classes, and other categories of persons, both in rural
and urban areas;
(5) "Unorganised
Sector" includes self-employed workers such as agricultural labourers,
bidi workers, brick kiln workers, carpenters, cobblers, construction workers,
fishermen, hamals, handicraft artisans, handloom and khadi workers, lady
tailors, leather and tannery workers, papad makers, power loom workers,
physically handicapped self-employed persons, primary milk producers, rickshaw
pullers, safai karamcharis, salt growers, sericulture workers, sugarcane
cutters, tendu leaf collectors, toddy tappers, vegetable vendors, washerwomen,
working women in hills, or such other categories of persons;
(6) "Economically
Vulnerable or Backward Classes" means persons who live below the poverty
line;
(7) "Other
Categories of Persons" includes persons with disability as defined in the
Persons with Disabilities (Equal Opportunities, Protection of Rights, and Full
Participation) Act, 1995 and who may not be gainfully employed; and also
includes guardians who need insurance to protect spastic persons or persons
with disability;
(8) "Informal
Sector" includes small scale, self-employed workers typically at a low
level of organisation and technology, with the primary objective of generating
employment and income, with heterogeneous activities like retail trade,
transport, repair and maintenance, construction, personal and domestic services
and manufacturing, with the work mostly labour intensive, having often
unwritten and informal employer-employee relationship;
(9) All words
and expressions used herein and not defined herein but defined in the Insurance
Act, 1938 (4 of 1938) as amended from time to time, or in the Insurance
Regulatory and Development Authority Act, 1999 as amended from time to time or
in the Insurance Rules, 1939 or any other Regulations issued by IRDA shall have
the meanings respectively assigned to them in those Acts or Rules or
Regulations.
Regulation 3. Obligations
(1) Every
insurer, who begins to carry on insurance business after the commencement of
the Insurance Regulatory and Development Authority Act, 1999, for the purposes
of sections 32B and 32C of the Insurance Act,1938 as amended from time to time,
shall ensure that it undertakes the following obligations, during the financial
years indicated herein, pertaining to the persons in-
(A) Rural
Sector
(a) In
respect of a Life Insurer:
(i) Seven per
cent in the first financial year;
(ii) Nine per
cent in the second financial year;
(iii) Twelve
per cent in the third financial year;
(iv) Fourteen
per cent in the fourth financial year;
(v) Sixteen
per cent in the fifth year;
(vi) Eighteen
per cent in the sixth and seventh financial years;
(vii) Nineteen
percent in the eighth and ninth financial years;
(viii) Twenty
percent in the tenth financial year to fifteenth financial year;
(ix) Twenty
five percent from sixteenth financial year onwards,
of the
total policies written direct in that year
(b) In
respect of a General Insurer:
(i) Two per
cent in the first financial year;
(ii) Three per
cent in the second financial year;
(iii) Five per
cent in the third to seventh financial years;
(iv) Six per
cent in the eighth financial year;
(v) Seven per
cent in the ninth financial year and thereafter;
of total
gross premium income written direct in that year;
(c) In
respect of Standalone Health Insurers
(i) 50% of
the obligations prescribed for General Insurers
(B) Social
Sector
In
respect of all Insurers (Life, Non-Life, Stand alone Health):
|
Age of the Life Insurers |
Proposed % of Social Sector
lives on the total business procured in the preceding financial year |
|
1 |
0.5% |
|
2 |
1% |
|
3 |
1.5% |
|
4 |
2% |
|
5 |
2.5% |
|
6 |
3% |
|
7 |
3.5% |
|
8 |
4% |
|
9 |
4.5% |
|
10 and above |
5% |
(Note: Total
business for the purpose of these regulations is the total policies issued in
case of individual insurance and number of lives covered in case of Group
Insurance)
Provided
that in cases where an insurance company commences operations in the second
half of the financial year and is in operations for less than six months as at
31st March of the relevant financial year, (0 no rural and social sector
Obligations shall be applicable for the said period, and (it) the annual
obligations as indicated in the Regulations shall be reckoned from the next
financial year which shall be considered as the first year of operations for
the purpose of compliance. In cases where an Insurance Company commences
operations in the first half of the financial year, the applicable obligations
for the first year shall be 2500.
Provided
further that in case of a General Insurer, the obligations specified shall
include insurance for crops.
Regulation 4. Notes applicable to Regulations 3
(a) The term
'lives' referred to in Regulations 3 in respect of all Insurers refers to human
lives insured as at the end of each financial year.
(b) Re-insurance
premium shall not be included while calculating the obligations of the
insurers in respect of the Rural and Social Sectors.
(c) Business
pertaining to Government subsidized social security schemes will not be
considered for the social sector obligations.
(d) The
Authority may prescribe or revise the obligations specified in these
Regulations from time to time.
Regulation 5. Compliance
(1) Micro
insurance policies issued are eligible to be reckoned for the social sector
obligations.
1.1 Where
a micro insurance policy is issued in a rural area, such micro insurance
policies may be reckoned for both rural and social sector obligations
separately.
(2) Every
Insurer shall put in place effective operational procedures for
accurate classification of the business obligations into the Rural and
Social as per these Regulations.
(3) Every
Insurer shall furnish the annual certificate by the Chief Executive Officer or
the Principal Officer within ninety days from the end of the Financial Year
submitting the actual business details of the obligations fulfilled towards
these Regulations.
Regulation 6. Submission of Returns
Every
insurer shall submit a return, as part of the financial returns to be submitted
under the Insurance Regulatory and Development Authority (Preparation of
Financial Statements and Auditors Report of Insurance Companies) Regulations,
2002 as modified from time to time, the Rural and Social Sector obligations
specified under these Regulations and disclose the level of compliance achieved
during the said year. Such reporting shall form part of the 'Notes to the
Accounts'.
Regulation 7. Power to Remove Difficulties and Issue Clarifications
In order
to remove any doubts or the difficulties that may arise in the application or
interpretation of any of the provisions of these regulations, the Chairperson
of the Authority may issue appropriate clarifications or guidelines as deemed
necessary.