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IAI Actuarial Core Principles · Business Management · Sources of Indian law and valid contracts

The Insurance Regulatory and Development Authority of India issues regulations under powers given to it by an Act of Parliament. A life insurer argues that a particular regulation is binding only if Parliament itself passed it line by line. Which statement best describes the legal position?

Regulations made by a body such as IRDAI are delegated or subordinate legislation. They are legally binding provided they stay within the powers given by the parent Act. Parliament need not enact each one, but regulations exceeding those powers are ultra vires and can be struck down.

  1. ARegulations are invalid unless each is separately enacted by Parliament
  2. BRegulations are delegated (subordinate) legislation, valid if made within the powers conferred by the parent ActCorrect
  3. CRegulations are merely advisory and carry no legal force
  4. DRegulations override the parent Act where they conflict with it
  5. Regulations are a form of customary law arising from industry practice

Explanation

Parliament may delegate law-making power to a body through an enabling Act. Regulations made within that authority are binding delegated legislation. They are not advisory, and they cannot override the parent Act; if they exceed their powers (ultra vires) courts may strike them down.

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