Press Information Bureau

Government of India

Ministry of Finance

23-August-2011 17:50 IST

Meeting of Obligations in Rural Areas and Social Sectors by Insurance Companies

Insurance Regulatory and Development Authority (IRDA) has issued Insurance Regulatory and Development Authority (Obligations of Insurers to Rural or Social Sectors) Regulations, 2002 requiring insurance companies including State-owned insurers to meet the obligations in the rural areas and social sectors. These regulations lay down targets for insurance companies as regards the percentage of business to be procured from rural areas/social sectors. In case of default in meeting these obligations by the insurers, IRDA takes action against such insurance companies including state-owned insurers and can even impose fine for non compliance of the aforesaid Regulations.

This information was given by the Minister of State for Finance Shri Namo Narain Meena in a written reply to a Question in Rajya Sabha today.

DSM/SS/PM

Insurer rural and social sector obligations require target-based sourcing and allow regulator enforcement including fines for noncompliance. Insurance companies, including state-owned insurers, are required under the Insurance Regulatory and Development Authority (Obligations of Insurers to Rural or Social Sectors) Regulations, 2002 to meet target-based obligations for procuring business from rural areas and social sectors. Failure to meet these targets permits the regulator to take enforcement action, including imposing administrative fines, against defaulting insurers.