Page 292 - DCOM304_INDIAN_FINANCIAL_SYSTEM

Unit 13: Mutual Funds and Insurance Services

8. three Notes
9. Italy
10. private companies
11. premium

13.12 Further Readings

Books G. M. Meier and R. E. Baldwin, Economic Development, Theory, History, Policy,
John Wiley & Sons, INC, New York, 1957, p.2.
Statistics on Working of Capital Issues Control, Ministry of Finance, India

Compendium on Industrial Policy & Procedure, Ministry of Industry, India
Reserve Bank of India Bulletin, 2006, 2007, 2008 2009.

Online links www.sebi.org
www.induscorpque.com

www.rbi.com
www.amfiindia.com/



Case Study IRDA's New Guidelines are a Step in the

right Direction
W ith the latest guidelines, new products may appear more attractive than older
ones. But investors may stand to lose if they change policies.

The Insurance Regulatory and Development Authority (IRDA) has continued its drive
towards reforming the most criticised insurance product. In comparison to its earlier
guidelines, the latest circular is likely to have far-reaching impact on the way ULIPs are
sold in the market.
The most notable change in the recent guidelines pertain to surrender charges, five-year
lock-in period, a cap on difference between gross yield to net yield for investment periods
less than 10 years and a minimum guaranteed return on pension products. First, the
details on the changes:
Surrender charges that punished policyholders for early discontinuance have undergone
substantial changes. IRDA has recommended two slabs, one for an annual premium up to
` 25,000 and other for investment above this threshold. For an annualised premium of up
to ` 25,000, the first year surrender charges are capped at 20 per cent of the premium or
fund value subject to a maximum of ` 3,000, while this goes down to as low as 5 per cent or
` 1000 for surrendering in the fourth year. From the fifth year, ULIPs will not suffer any
surrender charges.
Contd...

LOVELY PROFESSIONAL UNIVERSITY 287