The Hindu Business Line : Centre to IRDA: Transfer fund to Public Account

Justification
Money could be withdrawn without appropriation for meeting administrative expenses.
Decision to transfer based on the legal opinion that IRDA was performing a `sovereign function'.

New Delhi , Sept. 2

The Union Government has advised the Insurance Regulatory and Development Authority (IRDA) to transfer the IRDA fund into the Public Account of India. The Finance Ministry said this move would not undermine the Authority's independence as regulator of the insurance sector.

Unlike monies deposited in the Consolidated Fund of India , the money deposited by IRDA in the Public Account could be withdrawn without appropriation for meeting the administrative expenses of the Authority.

The IRDA Act 1999 requires all grants, fees and charges received by the Authority, the percentage of prescribed premium income received from the insurer and all sums received by the Authority from such other source as may be decided by the Central Government to be credited into the IRDA fund. This fund could be utilised for meeting the administrative expenses of the Authority,

An official release said the decision to transfer the IRDA fund to the Public Account was based on the legal opinion that the Authority was performing a "sovereign function" i.e. regulation of private and government bodies in the insurance sector. The Authority also has the power to enforce the law. IRDA is a statutory authority vested with powers, which are relatable to Government functioning.

In view of this, the legal opinion says that the moneys collected by the Authority under Section 16 (1) of the IRDA Act 1999 are receipts on behalf of the Government and should be credited to the Public Account.

Other bodies

The release also said the other regulatory bodies such as the Telecom Regulatory Authority of India and Central Electricity Regulatory Commission deposit their receipts into the Consolidated Fund of India. Even the Investors' Protection Fund, administered by the Ministry of Company Affairs (MCA), and the Central Road Fund reside in the Public Account.

The receipts of constitutional authorities such as the Supreme Court, UPSC, Election Commission, Comptroller and Auditor General of India are credited to the Consolidated Fund of India and these did not, in any manner, undermine their independence or Authority, the release added.

More Stories on : Insurance | Policy | Regulatory Bodies & Rulings

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Centre to IRDA: Transfer fund to Public Account

United Western Bank placed under moratorium

RBI working on multi-purpose smart cards

`Federal Bank interested in taking over United Western'

Vulnerability of small banks

Govt clears Ganesh Bank merger with Federal Bank