The Commission has undertaken the present exercise in the context of the changed policy that has permitted private insurance companies both in the life and non-life sectors. A need has been felt to strengthen the regulatory mechanism even while restructuring the existing legislation with a view to removing portions that have become redundant as a consequence of the recent changes.

Among the major areas of changes suggested in the Consultation Paper are:

1. merging of the provisions of the IRDA Act with the Insurance Act to avoid multiplicity of legislations;
2. deletion of redundant and transitory provisions in the Insurance Act, 1938;
3. Amendments reflect the changed policy of permitting private insurance companies and strengthening the regulatory mechanism;
4. Providing for stringent norms regarding maintenance of ‘solvency margin’ and investments by both public sector and private sector insurance companies;
5. 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 (the GRAs are expected to replace the present system of insurer appointed Ombudsman)

• 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