Regulatory Changes In Insurance And Capital Markets And How They Will Impact You

Capital  Markets

Ease of Transactions

Change: Sebi has simplified the norms for processing investors’ service requests by RTAs and for furnishing PAN, KYC, and nomination details. It has also decided to do away with the provisions related to the freezing of folios under the Benami Transactions (Prohibitions) Act, 1988 and the Prevention of Money Laundering Act, 2002.

Impact: It will help mitigate the unintended challenges raised by the freezing of mutual fund folios and help protect investors’ interests in securities, while promoting and regulating the securities market.

Change: Sebi has revamped the format of SID of mutual funds after consultations with its Mutual Fund Advisory Committee and Amfi.

Impact: The move will enhance the ease of preparation of the mutual funds’ SID document and increase its readability for investors.

Transparency

Change: Sebi has issued the procedural framework for dealing with unclaimed amounts lying with REITs and the manner of claiming such deposits by unitholders.

Impact: It will create transparency and protection for investments in the REIT space, while offering more convenience in retrieving investors’ unclaimed funds.

Sebi: Securities and Exchange Board of India; RTA: Registrar and transfer agents; PAN: Permanent Account Number; KYC: Know your customer; SID: Scheme information document; Amfi: Association of Mutual Funds in India; Reits: Real estate investment trusts

Insurance

Deterrent

Change: Irdai has issued a circular to implement Section 12A of “The Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005.”

Impact: Individuals and entities (designated by the UNSC Resolutions and MEA) cannot divert or use the targeted funds and assets. It will act as a deterrent to terrorist activity.

Product Innovation

Change: Irdai will set up a committee to simplify wordings in documents to make them more comprehendible.

Impact: Policy documents will have a simple language that is easy to understand by the people at large.

Change: A circular has been issued on the revision of CIS, Regulation 26 of Irdai (Health Insurance) Regulations, 2016, which will be implemented from January 1, 2024.

Impact: Customers must have the CIS, with key details of the policy, in a physical or digital mode. It will also be available in a local language.

Change: Irdai has constituted a task force to suggest a framework for “de-tariffication” of tariffs and tackle operational issues to guide insurers.

Impact: The task force is assigned to propose a principle-based framework for matters that need addressing and to draft guidelines for de-notified lines of business.

Irdai: Insurance Regulatory and Development Authority of India; UNSC: United Nations Security Council; MEA: Ministry of External Affairs; CIS: Customer Information Sheet; Source: SecureNow

*List is not exhaustive | Compiled by Sanjeeb Baurah