Industrial Licensing Act 1951

Industrial development and regulation act 1951 trai & irda

Presented by: Mohd.Arish Shakur Ansari Chandann Prasad

ContentqIntroduction qObjectives of IDR qFunctions qInsurance Authority Regulation Act 1999 q q q q q q

Introductionq Industrial licensing became a part of industrial economy of India with the passing of industries (development & regulation Act), 1951. q This Act came into effect on May 8,1952 q The conceptual and legal framework for small scale and ancillary industrial undertakings is derived from the IDR Act, 1951. q The Industries (Development and Regulation) Act provides the conceptual and legal framework for industrial development and industries in India. q It is briefly known as the IDR Act. The act was enacted in 1951 and a number of amendments have been made in the Act.

Objectivesq To implement the industrial policy.

q To ensure regulation and development of important industries.

q To ensure planning and future development of new undertakings.

q

Functionsq It deals with registration of industrial undertaking with proper capacity. q Revocation of registration of industry because of misrepresentation of facts. q Licensing of new industrial undertaking or producing new articles. q To specify the requirements which shall be followed by small scale industries. q Promoting industrial economy and easing the problem of unemployment. q Prohibiting the industrial undertaking from resorting to any Act that reduces its economic values.

q

Definition of IRDAq Insurance is pooling of risks. In contract of insurance ,the insurer (insurance company) agree/undertakes, in consideration of a sum of money (premium) , to make good the loss suffered by the insured against a specified risk such as fire , accident etc or any contingency.

History of IRDAq Methods of transferring or distributing risk were practiced by Chinese and Babylonian traders as long ago as the 3rd and 2nd millennia BC. q The Greeks and Romans introduced the origins of health and life insurance c. 600 AD. q India:- First Indian insurance company was Calcutta Insurance Company which setup in 1798 exclusively for Europeans. The Bombay Life Assurance Society formed in 1870 Insured Indians first time. q Indian life assurance companies act ,1912 was first statutory act to regulate life business. q In 1928 the Indian insurance companies act enacted q In 1938 insurance act amended to consolidate legislation and effective control over the

q1 9 th J n . 1 9 5 6 LI i fo rm e d b y a b so rb i g 1 5 4 a C s n I d i n , 1 6 n o n - I d i n i su re r a n d 7 5 p ro vi e n t n a n a n d soG I ti a . I co rp o ra te d a s a co m p a n y i Ye a r 1 9 7 1 . e e q ci w s s n C n I 1 9 7 2 G e n e ra l I su ra n ce B u si e ss( N a ti n a l za ti n ) n n n o i o A ct p a sse d w i e ffe ct fro m 1 st Jan 1973 GIC is formed th by amalgamation of 107 insurer and 4 company formed named as qNational Insurance Co. Ltd. qThe New India Assurance Co. Ltd. qThe Oriental Insurance Co. Ltd. qThe United India insurance co. Ltd. qIn Dec. 2000 subsidiaries of GIC were restructured as independent company. And in July 2002 parliament passed a bill of De-linking of four subsidiaries of GIC.

IRDAIn 1993 Government setup a committee under chairmanship of RN Malhotra ,former Governor of RBI for reforms in Insurance sector. Recommendations are :

q IRDA was constituted as an autonomous body to regulate and develop the insurance industry.

q Foreign companies are allowed up to 26% of paid up capital and can operate with an Indian company.

MEMBER OF IRDA

q q The Authority is a ten member team consisting of (a) a Chairman; (b) five whole-time members; (c) four part-time members

Duties, Powers and Functions of IRDAqTo regulate, promote and ensure orderly growth of the insurance business and reinsurance business. qIssue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration . qProtection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance;

q Specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents. q Specifying the code of conduct for surveyors and loss assessors. q Promoting efficiency in the conduct of insurance business. Levying fees and other charges for carrying out the purposes of this Act q Calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries. q Control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business .

Cont

Contq Specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries. q Regulating investment of funds by insurance companies. q Regulating maintenance of margin of solvency q Adjudication of disputes between insurers and intermediaries or insurance intermediaries.

Registration under IRDA The application accompanied by:q A certified copy of memorandum and article of association. q Name, address and occupation of Directors. q A statement of the classes of insurance business done/to be done along with a statement of deposits with the Reserve Bank of India. q For life business , a sum equivalent to 1% of total gross premium not exceeding 10 crore written in India in any Financial year. q For General business 3% of total gross premium not exceeding 10 crore. q q

Contq Reinsurance business Rs.20 crore; Rs.100,000. q For cooperative life insurance business / assurance companies should be Rs.2 lacks. q A declaration verified by an affidavit by the principal officer of the insurer that the requirement of paid up capital (Rs. 100 crore and Rs.200 crore for life/general and reinsurance business, respectively) Rs. 250 crore for reinsurance business or working capital. q A certified copy of the Published prospectus if any and, q Standard policy forms of the insurer and statements of the insurer and statements of the assured rates, advantages, terms and conditions to be offered in connection with insurance policies, together with a certificate in connection with life business by an actuary.

q

Cancelation of Registrationq He fails to comply with the requirement of deposit with the RBI. q He fails to comply with the requirement relating to sufficiency of assets(assets-liabilities) q The whole of his deposit has been refunded to him on court order when he cease to carry on business and all liabilities has been satisfied/provided for. q He defaults in complying with or contravenes any requirement of insurance act/any rule/order made or direction issued there under, q The IRDA has reason to believe that any claim are unpaid for 3 month after final court order in India. q He carries on any other business,

Insurance Business in Rural/Social sectorFor all new life insurer:-( percentage of total insurance) q First year-7% q Second year-9% q Third year-12% q Fourth year-14% q Fifth year-16% q Sixth year-18% q

For general insurer.

q First year- 2% q Second year- 3% q Third year-5% q Fourth year- 5% so on q All insurers are obliged to issue 5,7,10,15,20,and 25 thousand lives in first six years respectively. q q

IRDA. For getting license an agent has to pay Rs 250 Eligibility:- The agent should not q Minor q Unsound mind q Guilty of criminal misappropriation /breach of trust/forgery

An insurance agent is a licensed agent with

LICENCING OF INSURANCE AGENTS

Have not been found in the course of qAny judicial proceeding relating to any insurance policy/winding up of an insurance company qGuilty of knowingly participated in

CURRENT NEWS:q Indias insurance sector is expected to grow 17% in 2008-09 fiscal year if the economy expands at 7.6%, Insurance Regulatory and Development Authority (IRDA) chairman J. Hari Narayan. q The federal cabinet approved changes to insurance laws and proposed raising the foreign investment limit to 49% from the present 26%.

qLife insurers grew their business by 23.3% to Rs930 billion in 2007-08 fiscal year, while general insurers posted growth of about 14% in premium income to Rs298 billion, according to IRDA data. qIf an agent left his job then it is the responsibility of insurance company to help customer and manage all future assistance.

CONT.q According to K N Bhandari, the Secretary General of General Insurance Council, India's general insurance sector growth @ 18% rate in 2008. In 2007 it was 13%. q Present market value of the GIS is Rs 30,000crore& Penetration level of the Indian insurance sector is 0.65 %.

TELECOM REGULATORY AUTHORITY OF INDIA, 1997

This act was amended to provide for the Establishment of the Telecom Regulatory Authority of India to regulate the telecommunication and services, to protect the interests of service providers and consumers of the telecom sector, to promote and ensure orderly growth of the telecom sector, and for matters connected therewith or incidental thereto.

Establishment and incorporation of Authority:

v Central government establish TRAI for the purpose of this act. v Body corporate having perpetual succession and a common seal, with power subject to the provisions of this act , to acquire , hold and dispose of property . v The authority shall consist of a chairperson, and not less than two but not exceeding six members. v The head office shall be at New Delhi.

Qualifications for appointment of chairperson and other members:

v The chairperson shall be a person who is or has been a judge of supreme court or who is or has been a chief justice of a high court. v A member shall be a person who has special knowledge of any professional experience, in telecommunication, industry, finance, accountancy, law, management and consumer affairs.

v Person does not have any such financial or other interest as is likely to affect prejudicially his functions as such member. v The chairperson shall hold office for a term of five years . v A member shall hold office for a period of five years or until he attains the age of sixty five years , whichever is earlier.

Term of office & conditions of service:

v v v v The employee of the government on his selection as shall have to retire from service before joining as a member. v The salary, allowances and other conditions of service of chairperson and other members shall be such as may be prescribed.

Powers of chairperson and vice chairperson:

v The chairperson shall have powers of general superintendence and directions in the conduct of the affairs of the authority and presiding over the meeting. v Central government may appoint a vice chairperson

v v v

Removal and suspension of member from office:

v A person who has been adjudged an insolvent or has been convicted of an offence. v Person who has become physically or mentally incapable of acting as a member. v Person who has acquired such financial or other interest as is likely to affect prejudicially his function as a member.

v Chairperson or vice chairperson or any other member chosen by the members present from amongst themselves at the meeting shall preside at the meeting. v All questions which come up before any meeting of the authority shall be decided by a majority vote of the members present. v The authority may make regulations for the transaction of business at its meetings.

Meetings:

q q q

Functions of TRAI:

q To recommend the need and timing for introduction of new service provider. q To recommend the terms and conditions of licence to a service provider. q To ensure compliance of terms and conditions of licence. q Recommend revocation of licence for non compliance of terms and conditions of licence. q Facilitate competition and promote efficiency in the operation of telecommunication services. q Protect the interest of the consumers of telecommunication service. q Monitor the quality of service and conduct the periodical survey. q Inspect the equipment used in the network and recommend the type of equipment to be used.

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