by In India, the insurance industry is regulated by the Insurance Regulatory and Development Authority of India (IRDAI), which is responsible for regulating and supervising insurance companies to ensure that they follow ethical practices and treat their policyholders fairly. The IRDAI has implemented several measures to control malpractices in the insurance industry, including:
- Code of conduct: The IRDAI has established a code of conduct for insurance companies and agents, which outlines ethical standards and practices that must be followed.
- Grievance redressal: The IRDAI has established a grievance redressal mechanism that allows policyholders to lodge complaints against insurance companies and agents for unethical practices. The IRDAI investigates these complaints and takes appropriate action against the offenders.
- Licensing of insurance agents: The IRDAI requires insurance agents to be licensed before they can sell insurance products. To obtain a license, agents must undergo training and pass an examination that tests their knowledge of insurance products and ethical practices.
- Risk-based supervision: The IRDAI uses a risk-based supervision framework to identify and monitor risks in the insurance industry. This helps the IRDAI to identify potential malpractices and take corrective action before they become widespread.
- Inspections and audits: The IRDAI conducts regular inspections and audits of insurance companies to ensure that they comply with ethical standards and regulatory requirements. These inspections and audits help to identify potential malpractices and take corrective action.
