Insurance laws in India are primarily governed by the Insurance Act, 1938, the IRDAI Act, 1999, and various regulations issued by the Insurance Regulatory and Development Authority of India (IRDAI). The Insurance Act, 1938, governs all types of insurance, while the LIC Act, 1956, regulates the Life Insurance Corporation of India and the General Insurance Business (Nationalisation) Act, 1972, nationalizes general insurance businesses.
The key types of insurance in India include Life Insurance, which covers human life risks, and General Insurance, which includes health, motor, fire, and marine insurance. IRDAI's regulations cover licensing, solvency margins, investment norms, and foreign direct investment (FDI) rules, which allow up to 74% foreign investment in the insurance sector as of 2021.
Insurance laws ensure policyholder rights such as transparency, fair claim settlements, and grievance redressal. Insurance companies must be registered with IRDAI, maintain a minimum solvency ratio, and comply with corporate governance regulations. Disputes can be resolved through the IRDAI Grievance Redressal Cell, the Ombudsman Scheme, or consumer courts under the Consumer Protection Act.
