India Regulatory Brief: Telecom Network Audit, Risk Controls for Insurance Industry
TRAI to audit telecom networks
The Telecom Regulatory Authority of India (TRAI) will conduct a new type of audit on telecommunication networks across India during the first week of February. Although TRAI regularly audits telecommunication networks independently, TRAI recently asked telecom operators to assist with the February audit, which will test operators in five cities – Jaipur, Bhopal, Bangalore, Hyderabad, and Kolkata – for call success, blocked call, and call dropped rates as well as signal strength.
TRAI previously conducted several audits in an attempt to ensure that operators were in compliance with the regulator’s quality of service norms. These tests, however, were widely criticized by many in the telecom industry; a number of telecom operators failed previous audits and were required to make investments to fill service gaps and become compliant with the regulators’ quality norms.
IRDAI proposes risk controls, compliance programs for insurance industry
The Insurance Regulatory and Development Authority of India (IRDAI) issued a draft statement that proposes risk controls for the growing insurance industry. Specifically, the IRDAI has proposed a reform that would prohibit insurance companies from outsourcing fund management, anti-money laundering (AML) and know your customer (KYC) compliance programs, product design, as well as customer compliance programs.
Further, the insurance regulator has proposed an annual audit of outsourcing policies as well as mandatory disaster recovery plans and back-up facilities for some business functions. These proposals follow a similar announcement in August 2016; the IRDAI has invited insurance companies to lodge comments with the regulator by February 7.
Jail time for real estate developers in Tamil Nadu?
The Tamil Nadu state government released a draft copy of the Tamil Nadu Real Estate (Regulation and Development) Rules, 2016 for public comment. The rules, which were drafted by the state government, are in compliance with the Model Rules and Model Regulations for Regulatory Authorities published by the federal Ministry of Housing and Urban Poverty Alleviation (HUPA) under the Real Estate (Regulation and Development) Act, 2016.
While the industry and consumers are likely to benefit from the Act, the state government will likely field a fury of complaints from industry lobbyists before the rules are presented to the state assembly: the state government has proposed jail time for developers that do not pay refunds to investors for failing to meet project deadlines. According to the draft rules, real estate firms must refund investors within 45 days of any missed deadline.
If the refund is not paid within this time, the case can be heard by a special appellate tribunal, which can prosecute offenders under the India Penal Code. According to the draft rules, realtors charged under the penal code can avoid jail time by paying a one-time fine amounting to 10 percent of the total budget cost. However, several media sources have quoted government officials who’ve claimed that it’s unlikely the draft rules will be introduced to the state assembly any time soon.
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