IRDAI (Expenses of management of insurers) Regulations
Insurance Regulatory and Development Authority of India (IRDAI) (Expenses of Management of Insurers transacting General or Health Insurance business) Regulations, 2023
F. No. IRDAI/Reg/4/192/2023.—In exercise of the powers conferred by clause (je) of subsection (2) of Section 114A read with Section 40B and 40C of the Insurance Act, 1938 (4 of 1938), the Authority, in consultation with the Insurance Advisory Committee, hereby makes the following regulations, namely Objective To enable and provide flexibility to the Insurers to manage their expenses within the overall limits based on their gross written premium to optimally utilize their resources for enhancing benefits to policyholders.
Part-I
- Short title and Commencement
(1) These regulations may be called the Insurance Regulatory and Development Authority of India (Expenses of Management of Insurers transacting General or Health Insurance Business) Regulations, 2023.
(2) These Regulations shall come into force from 1st April, 2023 and shall remain in force for a period of three years thereafter.
(3) The Regulations shall be applicable to Insurers transacting General Insurance or Health Insurance business. - Definitions
(1) In these regulations, unless the context otherwise requires –
(i) “Act” means the Insurance Act, 1938 (4 of 1938).
(ii) “Authority” means the Insurance Regulatory and Development Authority of India established under sub- section (1) of Section 3 of Insurance Regulatory and Development Authority Act, 1999 (41 of 1999).
(iii) “Charges” means charge against profits such as income tax and other taxes like Goods and Service Tax (GST) borne by the insurer and other charges which are levied against the profits.
(iv) “Duration of Business” means the duration of an insurer’s business reckoned from the beginning of the financial year of commencement of business if the date of commencement is in the first half of the financial year, and from the beginning of the immediately succeeding financial year if the date of commencement is in the second half of the financial year.
(v) “Expenses of Management” shall include
(a) all expenses in the nature of operating expenses of General or Health Insurance business.
(b) commission to the insurance agents, intermediaries or insurance intermediaries.
(c) commission and expenses on reinsurance inward, which are charged to Revenue Account.
Provided that it shall not include the charges as defined in these Regulations.
(vi) “Insurtech Expenses” means expenses incurred towards technology enabled innovation in insurance services (Policyholder oriented) that could result in new business models, applications, processes or products.
(vii) “Insurance Awareness” means awareness creation done by Insurers through (a) direct campaigns including through branches, social media campaign, etc. and/or (b) supporting the General Insurance Council, to educate its customers and public at large in making the right choices by being aware of insurance requirements and role of insurance agents, intermediaries or insurance intermediaries.
Provided that it shall not include Insurance Advertisement as defined under IRDAI (Insurance Advertisements and Disclosure) Regulations, 2021 as amended from time to time.
(2) All words and expressions used herein and not defined, but defined in the Insurance Act, 1938 (4 of 1938) or in the Insurance Regulatory and Development Authority Act, 1999 (41 of 1999), or in any Rules or Regulations made thereunder, shall have the meaning respectively assigned to them in those Acts or Rules or Regulations.
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