1.1 These Regulations may be called the Insurance Regulatory and Development Authority of India (Obligations of Insurers to Rural and Social Sectors) Regulations, 2015.

1.2 They shall come into force from the date of their publication in the Official Gazette and shall supersede the Insurance Regulatory and Development Authority (Obligations of Insurers to Rural or Social Sectors) Regulations, 2002.

1.3 The obligations stated in these regulations shall be applicable from financial year 2016 17. Upto Financial year 2015 16 the obligations as per Insurance Regulatory and Development Authority (Obligations of Insurers to Rural or Social Sectors) Regulations, 2002 as amended from time to time shall apply.

1.4 No specific percentages of business have been specified as Rural and Social Sector Obligations to Agriculture Insurance Company of India Limited and Export Credit Guarantee Corporation of India owing to the nature of their business.

In these regulations, unless the context otherwise requires

2.1 Act means the Insurance Act, 1938 (4 of 1938);

2.2 Authority means the Insurance Regulatory and Development Authority of India established under the provisions of Section 3 of the Insurance Regulatory and Development Authority Act, 1999.

2.3 Rural Sector means the places or areas classified as rural while conducting the latest available decennial population census (Census of India);

2.4 Social Sector includes unorganised sector, informal sector, economically vulnerable or backward classes and other categories of persons, both in rural and urban areas;

2.5 Unorganised Sector includes self-employed workers such as agricultural labourers, bidi workers, brick kiln workers, carpenters, cobblers, construction workers, fishermen, hamals, handicraft artisans, handloom and khadi workers, lady tailors, leather and tannery workers, papad makers, power loom workers, physically handicapped self-employed persons, primary milk producers, rickshaw pullers, safaikaramcharis, salt growers, sericulture workers, sugarcane cutters, tendu leaf collectors, toddy tappers, vegetable vendors, washerwomen, working women in hills, daily wagers, hired drivers and coolies or such other categories of persons;

2.6 Economically Vulnerable or Backward Classes means persons who live below the poverty line;

2.7 Other Categories of Persons includes persons with disability as defined in the Persons with Disabilities (Equal Opportunities, Protection of Rights, and Full Participation) Act, 1995 and who may not be gainfully employed; and also includes guardians who need insurance to protect spastic persons or persons with disability;

2.8 Informal Sector includes small scale, self-employed workers typically at a low level of organisation and technology, with the primary objective of generating employment and income, with heterogeneous activities like retail trade, transport, repair and maintenance, construction, personal and domestic services and manufacturing, with the work mostly labour intensive, having often unwritten and informal employer-employee relationship;

2.9 All words and expressions used herein and not defined herein but defined in the Insurance Act, 1938 (4 of 1938) as amended from time to time, or in the Insurance Regulatory and Development Authority Act, 1999 as amended from time to time or in the Insurance Rules, 1939 or any other Regulations issued there under shall have the meanings respectively assigned to them in those Acts or Rules or Regulations.

3.1 Every insurer, who begins to carry on insurance business after the commencement of the Insurance Regulatory and Development Authority Act, 1999, for the purposes of Sections 32B and 32C of the Insurance Act, 1938 as amended from time to time, shall ensure that it undertakes the following obligations, during the financial years indicated herein, pertaining to the persons in

(A) Rural Sector

(a) In respect of a Life Insurer the following percentages of the total number of policies written in the respective years shown below:

(b) In respect of a General Insurer, the percentage of gross premium income written direct in the respective years shown below:

(c) In respect of Standalone Health Insurers

(i) 50% of the obligations prescribed for General Insurers

(B) Social Sector

In respect of all Insurers (Life, Non-Life, Standalone Health):

(Note: Total business for the purpose of these regulations is the total number of policies issued in case of individual insurance and number of lives covered in case of Group Insurance. In case of individual health insurance policies covering the lives of family members, the lives covered under such policy may be taken into account both in determination of target as well as actual performance)

Provided that in cases where an Insurer commences operations in the second half of the financial year and is in operations for less than six months as at 31st March of the relevant financial year, (i) no rural and social sector Obligations shall be applicable for the said period, and (ii) the annual obligations as indicated in the Regulations shall be reckoned from the next financial year which shall be considered as the first year of operations for the purpose of compliance to this regulations. However, in cases where an Insurer commences operations in the first half of the financial year, that financial year shall be treated as the first year of operations and the applicable obligations for the first year shall be 2500 lives for Social Sector. Similarly the obligations for Rural Sector shall be half of the percentage prescribed for the first year.

4.1 The term lives referred to in Regulations 3 in respect of all Insurers refers to human lives newly insured during the year and should have remained in force as at the end of each financial year. With regard to Crop Insurance, the lives of individual beneficiaries/farmers covered may be considered for social sector obligations.

4.2 Re-insurance premium shall not be included while calculating the obligations of the insurers in respect of the Rural and Social Sectors.

4.3 Business pertaining to Government subsidized social security schemes where total premium is paid by the Government will not be considered for the rural and social sector obligations. This provision shall be effective only from financial year 2017 18 though the overall applicability of the obligations prescribed in these regulations is from Financial year 2016 17 as stated in Regulation 1.3.

(Explanation: Government subsidized social security scheme for the above purpose is where the full premium under the scheme is subscribed by the Government without any contribution from the members/beneficiaries covered)

4.4 The Authority may prescribe or revise the obligations specified in these Regulations from time to time.

5.1 Micro insurance policies issued are eligible to be reckoned for the social sector obligations.

5.1.1 Where a micro insurance policy is issued in a rural area, such micro insurance policies may be reckoned for both rural and social sector obligations separately.

5.2 Every Insurer shall put in place effective operational procedures for accurate classification of the business obligations into the Rural Sector and Social Sector as per these Regulations.

5.3 Every Insurer shall furnish an annual certificate by the Chief Executive Officer or the Principal Officer within ninety days from the end of the Financial Year submitting the actual business details of the obligations fulfilled towards these Regulations.

6.1 Every insurer shall submit a return, as part of the financial returns to be submitted under the Insurance Regulatory and Development Authority (Preparation of Financial Statements and Auditors Report of Insurance Companies) Regulations, 2002 as modified from time to time, the Rural and Social Sector obligations specified under these Regulations and disclose the level of compliance achieved during the said year. Such reporting shall form part of the Notes to the Accounts .

7. In order to remove any doubts or the difficulties that may arise in the application or interpretation of any of the provisions of these regulations, the Chairperson of the Authority may issue appropriate clarifications or guidelines as and when deemed necessary.

1. IRDAI, Noti. No. F. No. IRDAI/Reg/13/103/2015, dated August 24, 2015, published in the Gazette of India, Extra., Part III, Section 4, dated 28th August, 2015, pp. 5-7, No. 292.