Regulatory Policy & Guidelines

Overview

In India, investments in Mutual Funds & SIP are regulated by the Securities and Exchange Board of India (SEBI), while Term Insurance and Health Insurance are regulated by the Insurance Regulatory and Development Authority of India (IRDAI).

When you invest or buy insurance through a third party — such as a distributor, agent, financial advisor, online platform, or aggregator — specific rules apply to protect investors and policyholders.

1. Mutual Funds & SIP — SEBI & AMFI Guidelines

1.1 Regulatory Authority

• SEBI regulates mutual funds, asset management companies (AMCs), and intermediaries.
• AMFI (Association of Mutual Funds in India) sets industry standards through the AMFI Code of Ethics for mutual fund distributors.
• All mutual fund schemes must be approved by SEBI and managed by SEBI-registered AMCs.

1.2 Third-Party Intermediaries (Distributors & Advisors)

When investing through a third party, ensure they hold valid credentials:

• Mutual Fund Distributor (MFD): Must hold a valid ARN (AMFI Registration Number) and EUIN (Employee Unique Identification Number) if operating under a corporate entity.
• Registered Investment Advisor (RIA): Must be registered with SEBI under the SEBI (Investment Advisers) Regulations, 2013 for fee-based personalised advice.
• Research Analyst: Must be registered under SEBI (Research Analysts) Regulations, 2014 if providing research recommendations.

1.3 Key Rules for SIP & Mutual Fund Investments

• KYC is mandatory — Complete Know Your Customer (KYC) through a KRA (KYC Registration Agency) before investing.
• No guaranteed returns — Mutual fund returns are market-linked. No person or platform can guarantee fixed returns on mutual funds.
• Scheme Information Document (SID) and Key Information Memorandum (KIM) must be read before investing.
• SIP mandates — Auto-debit through NACH/e-NACH requires your explicit bank authorization.
• Commission disclosure — Distributors receive commissions from AMCs. SEBI mandates transparency in commission structures.
• Cooling-off / cancellation — Certain investments may have cancellation rights within specified periods as per SEBI norms.
• Nomination facility — SEBI requires nomination or opt-out declaration for mutual fund folios.

1.4 What Third Parties Cannot Do

• Promise assured or fixed returns on mutual fund schemes
• Invest on your behalf without proper authorization and KYC
• Operate without valid ARN/EUIN or SEBI registration (where applicable)
• Provide personalised investment advice without SEBI RIA registration (if charging fees for advice)
• Pool investor money into unauthorized schemes (check for SEBI registration of the scheme)

2. Term Insurance — IRDAI Guidelines

2.1 Regulatory Authority

• All life insurance products including term insurance are regulated by IRDAI.
• Insurance companies must be licensed by IRDAI to sell policies in India.

2.2 Third-Party Distribution (Agents & Corporate Agents)

• Insurance Agents must hold a valid license issued by IRDAI and are appointed by insurance companies.
• Corporate Agents and Insurance Brokers must be IRDAI-registered entities.
• Web Aggregators comparing and selling insurance online must be registered with IRDAI under applicable guidelines.
• Agents must disclose their identity, license number, and the insurer they represent.

2.3 Key Rules for Term Insurance

• Free Look Period — Typically 15 days (30 days for distance marketing) to review and cancel the policy if unsatisfied.
• Full disclosure — You must disclose all material facts including health history, income, and existing policies. Non-disclosure can lead to claim rejection.
• Policy document — Always receive an IRDAI-compliant policy bond/certificate after purchase.
• Claim settlement — IRDAI mandates insurers to settle claims within specified timelines. Nominee details must be updated.
• No mis-selling — Agents cannot misrepresent product features, returns, or benefits.

3. Health Insurance — IRDAI Guidelines

3.1 Regulatory Framework

• Health insurance is regulated by IRDAI under the Insurance Act, 1938 and IRDAI (Health Insurance) Regulations.
• Standard products like Arogya Sanjeevani follow IRDAI-prescribed norms for uniformity.

3.2 Third-Party Rules for Health Insurance

• Only IRDAI-licensed insurers and authorized intermediaries can sell health insurance.
• TPAs (Third Party Administrators) handle claims processing and must be IRDAI-registered.
• Online platforms must comply with IRDAI guidelines on e-commerce and web aggregation of insurance.
• Commission paid to agents/intermediaries must follow IRDAI-prescribed limits and disclosure norms.

3.3 Key Policyholder Protections

• Pre-existing diseases (PED) — IRDAI rules govern waiting periods and disclosure requirements for pre-existing conditions.
• Portability — Policyholders can port health insurance between insurers while retaining accrued benefits (as per IRDAI portability guidelines).
• Free Look Period — Applicable for health policies purchased through distance marketing channels.
• Claim rejection reasons — Insurers must provide clear reasons for claim rejection. Grievance redressal mechanisms are mandatory.
• Renewal rights — Insurers cannot deny renewal without valid reasons defined under IRDAI regulations.

4. General Rules for Third-Party Financial Services

4.1 Due Diligence Checklist for Investors

Before investing or buying insurance through any third party, verify:

1. Registration/license number (ARN, EUIN, SEBI RIA, IRDAI agent license, broker registration)
2. Identity and contact details of the intermediary
3. Product features, charges, risks, and lock-in periods in writing
4. Whether advice is commission-based or fee-based
5. Official website of the AMC or insurer for scheme/policy validation
6. That payments are made directly to the AMC/insurer or through authorized payment channels

4.2 Data Protection & KYC

• Third parties must handle your personal and financial data as per IT Act, 2000 and applicable data protection norms.
• KYC documents (PAN, Aadhaar, address proof) should only be shared with authorized entities.
• Never share OTPs, passwords, or banking credentials with unverified persons or platforms.

4.3 Grievance Redressal

5. WritelyWise Platform Policy

• WritelyWise publishes educational content on mutual funds, SIP, term insurance, and health insurance for general awareness.
• We may connect users with licensed advisors, distributors, or partners — users must independently verify credentials before transacting.
• WritelyWise does not guarantee returns, claim approvals, or policy acceptance.
• Content on this website is not a substitute for professional advice tailored to your individual financial situation.
• Lead forms and consultation requests are for informational purposes; final transactions occur with regulated entities only.
• Data privacy: All personal information submitted through our platform is encrypted and stored securely. We do not sell or share your contact details with third parties for marketing purposes. We never ask for bank account numbers, card details, or OTPs on our website.

6. Related Policies

• Disclaimer
• Privacy Policy
• Terms of Use

7. Contact

For questions about this policy, contact us at:

• Email: contact@writelywise.in
• Address: Pune, Maharashtra, India

This page is for general informational purposes only and does not constitute legal or financial advice. Regulations may change. Refer to official SEBI, IRDAI, and AMFI websites for the latest rules.