Cannot agree more with Monika Halan, the Regulators need Regulation. Hey that will not happen!
Let us see 2 pieces of legislation that we saw today (13 Feb 2014, one day before Valentine’s Day, and on Kiss day!).
Both these legislation prove the following 2 things:
1. The Golden Rule of Life: The Man who has the Gold, makes the Rules.
2. The Regulator speaks in the voice of the Strongest player!
First let us look at the IRDA’s resolution saying who can REMAIN an agent. The original rule was that a person who becomes an agent stays on as an agent for life. However this was very hurtful and life insurance companies were WILD that agents who were not bringing new business were getting a lot of commission on the basis of their long past performance. So they started lobbying with IRDA using the correct jargon: Policy persistence, ..etc.
THE REAL BENEFICIARIES WILL BE THE BANKS. No way how a life insurance company can EVEN THINK of talking tough to its agent who gets them 80% of their business (Hdfc, Icici, Sbi, Kotak….). So they will throw away the agents and make sure that all the contacts etc. are shared with the banks…and banks will become Brokers.
Who will benefit? LiC of course. Awesome.
Now let us see what SEBI says.
It says to be an AmC you need to have a networth of Rs. 50 crores. Who are the losers? PPFAS, Motilal Oswal, Quantum….and many of the schemes by these firms were better than the schemes of SBI, LIC, UTI, Hdfc, …so the biggies who got worried about the small guys being better will have to worry less. So if there are say 3 good fund managers in the smaller Amcs, they will have to look for a job with the biggies…
What a shameless stroke of the pen!! Hdfc mutual fund was caught with a hand in the cookie jar, but got away with a rap on the knuckles!!
This is like saying – the auditor of Tata Steel should have a net-worth of at least 3o% of the client 🙂
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