Good policy communication is responsibility of insurer: IRDA

Speaking at the first meeting of newly-formed Health Insurance Forum, IRDA chairman J Hari Narayan said they received 92,898 complaints in the non-life sector, of which 38,891 or 37.48% were with regard to health insurance

Hyderabad: Faced with large number of complaints against non-life insurance companies, Insurance Regulatory and Development Authority (IRDA) on Friday suggested making the common people understand the policy by simplifying the language, reports PTI.

Speaking at the first meeting of newly-formed Health Insurance Forum, IRDA chairman J Hari Narayan said they received 92,898 complaints in the non-life sector, of which 38,891 or 37.48% were with regard to health insurance.

“Probably the lack of clarity in communication is reflected in the form of increasing number of complaints.

Therefore, good communication is the responsibility of the insurance company and not with the policy holder.

“So, if he does not understand something, some aspect of the policy, the problem lies with the insurance company and need to be addressed,” Mr Hari Narayan said.

“We should look at the question of the language. Whether the usage of local language would help or is the nature of the language itself including the construct of the language has to be changed,” he added.

He said insurance companies should treat the complaints as consumer feedback.

Replying to a query on the health insurance portability, the regulator said, there not much of portability or shift among insurance companies.

“All companies are equally good or equally bad. There is not much to chose. This is what the customer feels,” he quipped.

Speaking about the Health Insurance Forum, Mr Hari Narayan said, this forum will transform into a self regulatory body much in lines with life council and non-life council.

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Customer KYC details to be submitted to KRAs by March 2013: SEBI

SEBI on Friday asked all market intermediaries including mutual funds and stock brokers to submit Know Your Customer details of the existing customers with KYC Registration Agency by 31 March 2013

Mumbai: Market regulator Securities and Exchange Board of India (SEBI) on Friday asked all market intermediaries including mutual funds and stock brokers to submit Know Your Customer details of the existing customers with KYC Registration Agency (KRA) by 31 March 2013, reports PTI.

“All market intermediaries to upload the KYC details of the existing clients in the current KRA system in a phased manner,” SEBI said in a circular.

KRA are institutions which maintain KYC details.

Wholly-owned subsidiaries of stock exchanges and depositories are eligible able to act as KRA.

The regulator has announced five phases for updating KYC details of the existing customers ending 31 March 2013.

Intermediaries must complete the process of sending the original documents to the KRA by 31 March 2013, it said.

It is to be noted that to avoid duplication of KYC process with every intermediary, KRA system was developed for centralization of the KYC records in the securities markets.

The system was made applicable for new clients who opened accounts with the intermediaries from 1 January 2012.

Further, the circular said, the intermediaries are required to maintain electronic records of the KYCs of their clients and keeping physical records would not be necessary.

While uploading the existing clients’ KYC details in the KRA system, the intermediary shall indicate the date of account opening or activation information.

In case the KRA system indicates that the client's KYC data already exists, it said, the other intermediary shall upload the modifications, if any, so that the latest information about the client is available on the system.

Besides, the regulator also directed the stock exchanges and depositories make amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision in co-ordination with one another.

“In case of mutual funds, compliance of this circular shall be monitored by the boards of asset management companies and the trustees and in case of other intermediaries by their board of directors,” it said.

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5 years ago

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25% public float: SEBI rules out extending time limit

“Companies will have to see that public shareholding is 25% as per the time-frame. As far as listed private sector companies are concerned, it is June 2013 and for the public sector undertakings it is August 2013,” SEBI chairman UK Sinha told reporters

Mumbai: Taking a strong stance on public float, the Securities and Exchange Board of India (SEBI) on Friday ruled out extending time limit for the mandatory 25% public holding for both public as well as private companies and said they will have to adhere to the guidelines issued earlier, reports PTI.

“Companies will have to see that public shareholding is 25% as per the time-frame. As far as listed private sector companies are concerned, it is June 2013 and for the public sector undertakings it is August 2013,” SEBI chairman Upendra Kumar Sinha told reporters on the sidelines of a function organised by the Indian Merchants’ Chamber here.

Some companies, he said, “feel that SEBI will relax this. But let me tell you, I am going to make it difficult (for them).” 

Under a notification of the Securities Contracts Regulations (Amendment) Rules issued in 2010, the government made it mandatory for all listed entities to have a minimum public float of 25% and also stipulated the time limit.

There are 181 private sector companies that do not meet the minimum shareholding norms as of now, Mr Sinha said, adding, “around Rs27,000 crore will have to be mobilised by June 2013, and 16 PSUs (which don’t have 25% public holding) will have to mobilise Rs12,000 crore to adhere to the new public float norms.” 

On revamping of the initial public offering (IPO) process, which has been pending for quite some time now, Mr Sinha said, “it will be done in three-four months.” 

SEBI is currently streamlining the entire IPO procedure following instances of diversion of IPO proceeds by promoters, price manipulation on the listing day, poor due diligence and inadequate documentation among others.

Mr Sinha also said SEBI will soon come up with a new set of guidelines including shortening the time period for completing the IPO process.

On the issue of MIMPS (manner of increasing and maintaining public shareholding in recognised stock exchanges), he said the regulator will come out with the needed guidelines in the next two months.

Under the MIMPS regulations, there is a mandatory public shareholding norm for a stock exchange to ensure there is no conflict of interests.

Incidentally, one of the main reasons for SEBI to deny permission to the Financial Technologies-promoted MCX-SX to launch an equity trading platform was the higher shareholding by the promoters.

According to experts, the new regulations will be keenly watched by market players as this would determine the fate of MCX Stock Exchange.

Meanwhile, Mr Sinha refused to comment on the controversy relating to general anti-avoidance rules (GAAR), proposed in the Budget to check tax evasion that has adversely impacted the stock markets sentiment.

“That (GAAR) is between the government and the affected parties (FIIs). SEBI has no direct role in it, so I will not be able to comment on this,” Mr Sinha said.

On revising of the consent order norms, the SEBI chief said, “New consent order guidelines will be out in the next four weeks.”

The consent order regulations allow defaulting parties to settle disputes with SEBI on payment of an agreed fine but without admitting to the alleged malpractices. The mechanism has evoked criticism from several quarters.

Stating that the market regulator is not opposing high frequency trading (also called algorithmic trading), Mr Sinha stressed, “we will have to ensure that risk part is well understood and enforced. And the stock exchanges will have to take it seriously”.

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