Section 19 of IRDAI Act : Section 19: Power Of Central Government To Supersede Authority

Explanation using Example

Let's imagine a scenario where a natural disaster significantly disrupts the operations of the Insurance Regulatory and Development Authority (IRDA), which is responsible for overseeing the insurance industry in India. The disaster has caused extensive damage to the IRDA's infrastructure, leading to a situation where it's unable to perform its regulatory functions effectively.

In this case, the Central Government, upon realizing that the IRDA is unable to discharge its duties due to these extraordinary circumstances, may decide to step in for the public interest. The government would issue a notification to supersede the IRDA for a specified period, not exceeding six months, to ensure that the insurance sector continues to function smoothly.

Following the notification, the Chairperson and other members of the IRDA would have to vacate their offices, and the powers and duties of the IRDA would be temporarily assigned to a Controller of Insurance. This person would handle the regulatory responsibilities until the IRDA is reconstituted. Meanwhile, all properties controlled by the IRDA would be vested in the Central Government during this period.

Before the end of the six-month period, the Central Government would reappoint a new Chairperson and members to the IRDA, ensuring that the regulatory body is capable of resuming its duties. The government would also present a detailed report to both Houses of Parliament, explaining the reasons for the supersession and the actions taken.