Page 261 - DMGT515_PERSONAL_FINANCIAL_PLANNING

Personal Financial Planning

Notes Promoting and regulating professional organisations connected with the insurance and
re-insurance business;

Levying fees and other charges for carrying out the purposes of this Act;
Calling for information from, undertaking inspection of, conducting enquiries and
investigations including audit of the insurers, intermediaries, insurance intermediaries
and other organisations connected with the insurance business;
Control and regulation of the rates, advantages, terms and conditions that may be offered
by insurers in respect of general insurance business not so controlled and regulated by the
Tariff Advisory Committee under section 64U of the Insurance Act, 1938 (4 of 1938);
Specifying the form and manner in which books of account shall be maintained and
statement of accounts shall be rendered by insurers and other insurance intermediaries;
Regulating investment of funds by insurance companies;
Regulating maintenance of margin of solvency;

Adjudication of disputes between insurers and intermediaries or insurance intermediaries;
Supervising the functioning of the Tariff Advisory Committee;
Specifying the percentage of premium income of the insurer to finance schemes for
promoting and regulating professional organisations referred to in clause (f);

Specifying the percentage of life insurance business and general insurance business to be
undertaken by the insurer in the rural or social sector; and

Exercising such other powers as may be prescribed.
Self Assessment

State True or False:

6. In 1965, the Insurance Act was amended to regulate investments and set minimum solvency
margins.
7. Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA.

8. GS Malhoatra, former Governor of RBI, proposed recommendations for reforms in the
insurance sector.
9. Parliament passed a bill de-linking the four subsidiaries from GIC in July, 2002.

10. With the passing of the General Insurance Business (Nationalisation) Act, general insurance
business was nationalized and as a result 107 insurers were amalgamated and grouped
into five companies.

14.5 Regulations on Investment Services

Investment services are primarily fund based activities. The mutual funds and venture capital
funds directly fall under the investment services. Though portfolio management service is
advisory in nature. Similarly, stock exchanges and stock broking institutions have close link
with the investment activities and thus regulation on them could be conveniently discussed
along with other direct investment activities.
The regulatory set up consists of Securities Contracts (Regulation) Act (SCRA), 1956, SEBI
Regulations and Reserve Bank of India. Before discussing the regulatory framework under each

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