IRDA and AMFI & Its Role in India

Prepared By: Nimisha Viswanath

IRDA
The Insurance Regulatory and Development Authority (IRDA) is a national agency of the Government of India, based in Hyderabad. It was formed by an act of Indian Parliament known as IRDA Act 1999, which was amended in 2002 to incorporate some emerging requirements. Mission of IRDA as stated in the act is "to protect the interests of the Policyholders, to regulate, promote and ensure orderly growth of the Insurance industry and for matters connected therewith or incidental thereto."

 IRDA consists of a Chairman and some permanent as well as part time members Hari Narayan J is the current Chairman of IRDA. In 2010, the Government of India ruled that the Unit Linked Insurance Plans (ULIPs) will be governed by IRDA, and not the market regulator Securities and Exchange Board of India.

Functions
To protect the interest of and secure fair treatment to policyholders. To bring about speedy and orderly growth of the insurance industry, for the benefit of the common man, and to provide long term funds for accelerating growth of the economy. To set, promote, monitor and enforce high standards of integrity, financial soundness, fair dealing and competence of those it regulates. To ensure that insurance customers receive precise, clear and correct information about products and services and make them aware of their responsibilities and duties in this regard.

 To ensure speedy settlement of genuine claims, to prevent insurance frauds and other malpractices and put in place effective grievance redressal machinery. To promote fairness, transparency and orderly conduct in Financial markets dealing with insurance and build a reliable management information system to enforce high standards of financial soundness amongst market players. To take action where such standards are inadequate or ineffectively enforced. To bring about optimum amount of Self-regulation in day to day working of the industry consistent with the requirements of prudential regulation.

Role of IRDA in India:

The Insurance Regulatory and Development Authority(IRDA) was constituted to regulate and develop insurance business in India. As a key part of its role, it is responsible to protect the rights of policyholders. It's role, duties and responsibilities are stated here under: IRDA provides a certificate of registration to a life insurance company. IRDA is responsible for the renewal, modification, withdrawal, suspension or cancellation of this certificate of registration.

 IRDA frames regulations on protection of policyholders' interests. It offers policyholders the right to voice their complaints against insurers or insurance companies. The IRDA has set up the grievance redressal cell to take up the complaints of the policyholder. It specifies the requisite qualifications, code of conduct and practical training for intermediaries or insurance intermediaries and agents. It specifies the code of conduct for surveyors and loss assessors.

 It promotes efficiency in the conduct of insurance businesses. It promotes and regulates activities of professional organizations connected with life insurance. It levies fees and other charges to carry out the purposes of the IRDA Act. It specifies the form and manner in which books of account should be maintained and statements of accounts should be rendered by insurers and other insurance intermediaries.
It regulates the investment of funds by insurance companies.

 It regulates the maintenance of margins of solvency. It adjudicates disputes between insurers and intermediaries or insurance intermediaries. It specifies the percentage of premium income of the insurer to finance schemes for the promotion and regulation of certain specified professional organizations. It specifies the percentage of life insurance business to be undertaken by an insurer in the rural or social sector.

AMFI
AMFI is an apex body of all Asset Management Companies (AMC) which has been registered with SEBI. It functions under the supervision and guidelines of its Board of Directors. Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a professional and healthy market with ethical lines enhancing and maintaining standards. The Association of Mutual Funds of India works with 30 registered AMCs of the country It follows the principle of both protecting and promoting the interests of mutual funds as well as their unit holders.

Role of AMFI
It maintains a high professional and ethical standards in all areas of operation of the industry. It also recommends and promotes the top class business practices and code of conduct which is followed by members and related people engaged in the activities of mutual fund and asset management. The agencies who are by any means connected or involved in the field of capital markets and financial services also involved in this code of conduct of the association.

 AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual fund industry. Association of Mutual Fund of India do represent the Government of India, the Reserve Bank of India and other related bodies on matters relating to the Mutual Fund Industry. It develops a team of well qualified and trained Agent distributors. It implements a program of training and certification for all intermediaries and other engaged in the mutual fund industry.

AMFI undertakes all India awareness program for investors inorder to promote proper understanding of the concept and working of mutual funds. Association of Mutual Fund of India also disseminate information's on Mutual Fund Industry and undertakes studies and research either directly or in association with other bodies.

 Association of Mutual Funds of India's Chief Executive Officer: HN Sinor AMFI Chairman: AP Kurian

AMFI Publications:
AMFI publishes mainly two types of bulletin. One is on the monthly basis and the other is quarterly. These publications are of great support for the investors to get intimation of the knowhow of their parked money. 1. Making Mutual Funds Work For You-Investors' Concise Guide 2. AMFI Guidelines and Norms for Intermediaries (AGNI) 3. AMFI Code of Ethics (ACE)

The mailing address of Association of Mutual Funds in India Association of Mutual Funds in India 106, Free Press House, Free Press Journal Marg, Nariman Point, Mumbai - 400 021, India. Telephone : 91-22-5637 39 07 / 5637 39 08 Fax : 91-22-5637 3909

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