IRDA (Obligations of Insurers to Rural and Social Sectors) Regulations, 2000 (as amended from time to time) :

IRDA (Obligations of Insurers to Rural and Social Sectors) Regulations, 2000 provides that every insurance company is required to undertake a minimum percentage of business providing insurance coverage to persons residing in rural areas and providing coverage to persons who are engaged in social sector.

Rural areas have been defined as those places which have been classified as rural areas as per the latest census. The obligations of insurers under Rural Sector is calculated as a percentage of the total number of policies sold by an insurance company and is dependent on the age of the insurance company as follows:

For a life insurance company, the percentage with 7% (2%) in the first financial year of operations, increases to 12% (5%) in third financial year and 16%(5%) in the fifth financial year and 20% (7%) in the tenth financial year.

Note: figures in brackets indicate obligations of general insurance companies.

In respect of Social sector, the obligation is in terms of number of Lives assured covered under an Insurance policy belonging to social sector occupations as defined in the Regulations.

The number of lives required to be covered under this sector is also dependent on the age of the insurance company as follows:

For both Life and General insurance companies, the number of lives to be covered increases from 5,000 lives in the first financial year to 20,000 lives in the fifth financial year and 55,000 lives in the tenth financial year

Social Sector is defined unorganised sector, informal sector, economically vulnerable or backward classes and other categories of persons, both in rural and urban areas.