Ordinance gives Irda more teeth

The insurance ordinance promulgated by the President gives more teeth to the insurance regulator, the Insurance Regulatory and Development Authority (IRDA). As per a release by the finance ministry, the newly ordained ordinance gives IRDA room to enhance regulations in areas of solvency, investments and keep a strict vigil on the expenses and commissions given out to middlemen and agents.

"The ordinance will also substantially enhance penalty provisions to ensure compliance with insurance laws by companies, which is essential to uphold the consumer interest," said a release by the ministry.

The ordinance was approved by the Cabinet and signed by the President to enhance the foreign equity cap from 26 per cent to 49 per cent with proper safeguards on control of the insurance companies by the Indian entities.