SSC
The Insurance Regulatory and Development Authority of India (IRDAI) was set up in:
Answer (Detailed Solution Below)View answer ▾Hide ▴
Answer: Option B — 1999
Detailed Solution
The Insurance Regulatory and Development Authority of India (IRDAI) is a statutory body set up under the Insurance Regulatory and Development Authority Act, 1999, passed by Parliament. It was formed on the recommendations of the Malhotra Committee, headed by R.N. Malhotra, a former Governor of the Reserve Bank of India. The committee, set up in 1993, recommended opening up the insurance sector to private and foreign companies and setting up an independent regulator. IRDAI's headquarters was moved from New Delhi to Hyderabad in 2001.
Before this, insurance in India was a government monopoly. Life insurance had been nationalised in 1956, when the Life Insurance Corporation of India (LIC) was formed by merging about 245 private companies. General insurance was nationalised in 1972-73, when the General Insurance Corporation of India (GIC) and its four subsidiaries were formed. The IRDA Act, 1999 ended this monopoly and allowed private companies to enter the insurance business, with foreign ownership initially limited to 26%. This limit was raised to 49% in 2015 and 74% in 2021, and the Union Budget for 2025-26 proposed raising it to 100%.
IRDAI has a Chairman, five whole-time members and four part-time members, appointed by the Government of India. Its main functions are to:
Protect the interests of policyholders.
Register and regulate insurance companies and intermediaries such as agents and brokers.
Ensure the financial soundness of insurers and frame regulations on investment, premiums and claims settlement.
Promote the orderly growth of the insurance industry.
IRDAI has set the goal of "Insurance for All by 2047".
Why not the other options?
- ✗1956 is the year LIC was formed.
- ✗2003 is the year the Pension Fund Regulatory and Development Authority (PFRDA) was set up.
- ✗1972 is the year general insurance was nationalised (GIC).
Quick tip
Remember: IRDAI = 1999 (Malhotra Committee), Hyderabad; LIC = 1956; GIC = 1972; PFRDA = 2003. FDI in insurance: 26% to 49% (2015) to 74% (2021).
💬 Discussions on this question
Ask a doubt ›Still stuck on this question? Ask our faculty and fellow students — answers appear here.
Ask a doubtMore Financial Markets & Institutions Questions
View all ›- Q1.Which bank was established on 12 July 1982 on the recommendation of the B. Sivaraman Committee?
- Q2.The Small Industries Development Bank of India (SIDBI) was established in:
- Q3.The Securities and Exchange Board of India (SEBI) was established in:
- Q4.Which is the oldest stock exchange in India (and in Asia)?
- Q5.The GIFT City, India's first International Financial Services Centre (IFSC), is located in:
More General Knowledge Questions
- Q1.The techniques of Rasa and Bhava used in Indian classical dance trace their origin to which ancient text?Indian Dance Forms
- Q2.Lavani, Powada, Koli, Waghya Murali and Dhangari Gaja are folk dances of which state?Indian Dance Forms
- Q3.The one-act play associated with the Sattriya tradition of Assam is called:Indian Dance Forms
- Q4.Which dance form of Goa is known as the 'Warrior Dance'?Indian Dance Forms
- Q5.Manipuri dance is based on the Rasleela themes of:Indian Dance Forms
Financial Markets & Institutions — Preparation
This question tests your understanding of Financial Markets & Institutions, a key topic in the General Knowledge section. The detailed solution above uses a step-by-step approach to show the reasoning, and where available, a shortcut that helps you solve similar questions in under 90 seconds during the actual exam.
This topic covers India's financial institutions and markets: regulators such as SEBI, IRDAI and PFRDA, development banks such as NABARD, SIDBI and EXIM Bank, the money market and capital market, stock exchanges and indices, insurance, and microfinance and self-help groups. Questions usually ask what each regulator oversees, where institutions are headquartered, and what market terms mean (bull and bear markets, IPO, Sensex and Nifty). For example, NABARD supports agriculture and rural development, SIDBI supports small industries, and SEBI regulates the securities market. Practise the financial markets and institutions questions below, written in the style of the general awareness sections of exams such as SSC, banking, railways, CUET GAT, MAH CET and CLAT. Each question comes with a detailed explanation that adds related facts, so every question helps you revise more than one point.