This Blog provides you UpToDate information on life & General insurance dealing mostly with LIC's New Plan Circulars, MillionDollarRoundTable tips on marketing,Financial analysis and INCOME TAX.
Chairmans club convention 2012
Dear CM club member friends our
C.M's club convention tentively to be held at lucknow on 29th october 2012( For EZ, ECZ,
NCZ) , at Chennai on 19 November2012 (for SZ, SCZ) and at Pune on 26thNovember 2012( For WZ , NZ,CZ),
2012. Please choose option to attend the chairman club convention to strengthen LIAFI and same way pre
CM's convention
vinay mohanty
Chairman IT LIAFI
time schedule for collection of options form CM agents at branch level
Long LIVE LIAFI
vinay mohanty
option letter for cm"s convention NOV 2012
vinay mohanty
CM's Convention option letter 2012
Dear friends
dounload the link and take print our of option letter for CM's convention
http://webmail.sify.com/mail/h/h0ysxl85gc2z/?view=att&th=1382e1d9583c59af&attid=0.1&disp=vah&realattid=file1&safe=1&zw
vinay mohanty
dounload the link and take print our of option letter for CM's convention
http://webmail.sify.com/mail/h/h0ysxl85gc2z/?view=att&th=1382e1d9583c59af&attid=0.1&disp=vah&realattid=file1&safe=1&zw
vinay mohanty
CHAIRMAN'S CONVENTION NOVEMBER 2012
Dear CM club members friends our
C.M's club convention tentively to be held at lucknow ( For EZ, ECZ,
NCZ) , at Pune ( For WZ , NZ,CZ), and at Chennai (for SZ, SCZ) in November
2012. Please choose option to attend the chairman club convention to strengthen LIAFI and same way pre CM's convention
vinay mohanty
Chairman IT(LIAFI)
No insurance pay fine Rs 1,000 or can be send to prison for three months.
The Motor Vehicles act, 1988, has mandated that every vehicle should be insured against third-party risk.
It had come in the notice of ministry that not withstanding the provision of MV act, large number of vehicles is being used in public place without being insured against third party risk.
Third-party insurance ensures that compensation is available in respect of injury to people, including one’s passengers, or damage to people’s property from an accident caused by one.
The move follows the ministry’s recent initiative to provide cashless treatment to accident victims for the first 48 hours. Under the scheme the errant vehicles insurance policy will fund the victim’s treatment.
The ministry is also planning to build a solatium fund, which it had proposed in an amendment to the motor vehicle act tabled in the last parliament session.
The amendment has suggested that a fixed amount from the third-party premium be set aside towards a solatium fund. This fund will be used in hit-and-run cases where the errant vehicle cannot be traced.
The ministry has proposed that Rs 1 lakh will be given to the next of kin in hit-and-run deaths and Rs 50,000 in case of grievous injury, with the provision to increase the amount every three years.
In 2011, around 1.34 lakh people were killed and 6 lakh were injured in road accidents. At present there is no time limit for claiming damages on errant vehicles.
Victims file for claims even years after the accident and there have been cases where consumer courts pass orders giving victims extremely high settlement amounts. In all such cases, now insurance is necessary to settle claims.
Ministry is creating a national register that will have data about all registered vehicles. It will also have details of vehicles that do not have any insurance.
Life insurance products may go missing from Oct 2012
Regulator wants all existing products to be refiled
Niladri Bhattacharya / Mumbai Jun 21, 2012, 00:07 IST
Come October, the life insurance industry may be left with only a handful of products, as the regulator wants companies to ‘refile’ all existing products according to its new product design guidelines.
In a recent letter to the CEOs of all life insurance firms, the Insurance Regulatory and Development Authority (Irda) has said the refiling has to be done by September 30 this year. The regulator has directed that insurers withdraw by October 1 all the existing products based on the earlier guidelines.
What queers the pitch for life insurance companies further is that the Irda is yet to come out with the final guidelines on product designs, leading to fears that the industry would not be able to offer any products — whether linked or non-linked — to customers from October. Besides, the Irda is not exactly known for clearing products fast.
Industry sources point out that it generally takes about two weeks to file a product. Considering an insurer typically has more than 25 products in its portfolio, it is virtually impossible to refile all the products within three months. Also, given that the Irda takes at least 60-90 days to approve a product, there may be at best one or two products an insurer would be able to offer from October. This, they believe, would adversely impact the growth of new business premium in the second half of the financial year.
“There are no pension plans in the market today, as the regulator is yet to approve any products based on the new guidelines. Now, it is doubtful how many products the regulator would be able to approve in time, even if we refile the existing products,” said a senior insurance official at a private life insurance company.
The situation is similar to what pension plans had to go through. After the new guidelines on pension plans came into force from December 1 and all the earlier products were to be withdrawn by January 1, the insurance regulator could not approve a single pension product in time. The impasse continues in the pension sector, as the Irda is yet to approve any products on the new, revised guidelines. As a result, there are no pension products in the market today.
When contacted, a senior Irda official said it would issue the final guidelines soon and the regulator would fast-track the product approval process. “We are trying to fast-track the product approval process. If the insurers refile in time, we would approve the products as soon as possible,” he said on condition of anonymity.
NPS Started Gaining Pace Posted on June 25, 2012
New Pension Scheme (NPS) which was a slow starter now has started picking up the pace as subscription of workers from informal sector and its assets has more than doubled in 2011-12.
Corpus from workers in informal sector increased 144% in FY’12 to Rs 251.67 crore. Number of subscribers stood at 74,056 in FY’12 as against 38,693 in FY’11. As of 31 March 2012 NPS is managing total assets worth Rs 17,000 crore against 8,585 crore at the end of March 2011.
NPS is gaining pace as more and more people are seeking protection for old age and also because of impending tax benefits that will be available when Direct Taxes Code (DTC) will be implemented.
NPS which was launched in May 2009 was slow starter due to a belief that it might not be marketed like other saving instruments and due to fixed annual fee of Rs 280 per account.
Experts believe that NPS can help to fund many products that banks are not keen on lending due to mounting bad loans.
NPS can also give good returns compared to other government’s pension plans as in government’s pension plans it is mandatory to invest in sovereign debt and highest rank debt while NPS has no such restrictions and hence, it can invest either in stocks or bonds.
Given that Pension sector has just opened up and 60% of our population is below 30 years of age NPS has huge potential for growth. India have around 40 crore working population and most of them in unorganized sector, and at present less than 15% working population have pension benefits.
At present contribution to and returns from NPS are exempt from tax while withdrawal are taxed as normal income as it falls under the EET, or Exempt, Exempt, Tax, regime.
As per DTC, which is proposed to be implemented from next fiscal, investment under NPS will be exempted from tax at all stages.
NPS also may become popular due to absence of pension products by the life insurance companies. Another attraction of NPS is its low fund management charges of 0.00009%.
Individuals or corporates can subscribe to NPS by contributing a certain sum every quarter and can invest according to their preference. In case where no preference from the subscriber is made, the scheme follows the auto option based on the age of the subscriber.
The amount can be withdrawn at the retirement or at the age of 60, from 40% of the amount subscriber have to buy a annuity from a life insurer and rest 60% is given as lump sum. In case of withdrawal before the age of 60, subscriber has to compulsorily use 80% of the amount to buy an annuity.
Categories: News | Tags: Direct Tax Code, DTC, EET, New Pension Scheme, NPS, Pension Products
Soon Index-linked Insurance Plans to be Introduced
Posted on June 25, 2012 by Akanksha
Soon new category of life insurance product is expected to be introduced – Index Linked Insurance Plans.
Draft guidelines on product design have provided an outline of this product. According to it these plans will be linked to indices approved by Insurance Regulatory and Development Authority (IRDA) – a fact that would be disclosed to policyholder upfront. It will be predominantly linked to G-Secs.
Plan will operate like bank account where each policyholder will have separately managed account. The account value will reflect the premium paid by the policyholder as well as interest gained from the particular index to which the fund is linked.
Policyholder will not require to pay any explicit charges, other than mortality charge which will be deducted from amount earned. Take for instance you have paid premium of Rs 1,000 and out of which Rs 100 is deducted as mortality charge, and now assume that fund is linked to ten-year government security yield curve and generates 8% interest. The insurer will deduct a certain sum from the amount earned say 2%. The money in your account at the end of the year will be Rs 954. Rs 54 that you have earned as 6% of Rs 900 (after deducting the mortality charge).
Draft Guidelines have also specified that the policy document will contain the benefit table showing how the fund will work and benefit you will earn throughout the policy term.
Insurance companies will be required to send the statement of policy account to the policyholder at the end of every reporting period.
Minimum death benefit under new plan will be same as in the case of Unit-Linked Insurance Plan (ULIP) which is ten times of the life cover or sum assured at present.
The solvency requirements will also be in line with ULIPs, at present for non-guaranteed ULIPs, the solvency requirements stands at 0.8% of the total reserve or 0.2% of sum at risk. And products that come with upfront guarantees like highest Net Asset Value (NAV) should have a solvency requirement of 1.8% of the total reserve.
The solvency margins are the total amount that an insurance company is required to keep aside to meet future claims or redemptions by policyholders.
However, insurers have sought more clarity on proposed category from IRDA on accounting and reporting norms.
Draft guidelines on product design have provided an outline of this product. According to it these plans will be linked to indices approved by Insurance Regulatory and Development Authority (IRDA) – a fact that would be disclosed to policyholder upfront. It will be predominantly linked to G-Secs.
Plan will operate like bank account where each policyholder will have separately managed account. The account value will reflect the premium paid by the policyholder as well as interest gained from the particular index to which the fund is linked.
Policyholder will not require to pay any explicit charges, other than mortality charge which will be deducted from amount earned. Take for instance you have paid premium of Rs 1,000 and out of which Rs 100 is deducted as mortality charge, and now assume that fund is linked to ten-year government security yield curve and generates 8% interest. The insurer will deduct a certain sum from the amount earned say 2%. The money in your account at the end of the year will be Rs 954. Rs 54 that you have earned as 6% of Rs 900 (after deducting the mortality charge).
Draft Guidelines have also specified that the policy document will contain the benefit table showing how the fund will work and benefit you will earn throughout the policy term.
Insurance companies will be required to send the statement of policy account to the policyholder at the end of every reporting period.
Minimum death benefit under new plan will be same as in the case of Unit-Linked Insurance Plan (ULIP) which is ten times of the life cover or sum assured at present.
The solvency requirements will also be in line with ULIPs, at present for non-guaranteed ULIPs, the solvency requirements stands at 0.8% of the total reserve or 0.2% of sum at risk. And products that come with upfront guarantees like highest Net Asset Value (NAV) should have a solvency requirement of 1.8% of the total reserve.
The solvency margins are the total amount that an insurance company is required to keep aside to meet future claims or redemptions by policyholders.
However, insurers have sought more clarity on proposed category from IRDA on accounting and reporting norms.
Reinvest principal for higher returns
Ashish Pai / 24 Jun 12 | 12:29 AM
Investments and savings are not the only focus of financial planning. The other aspects – cash flow and liability management – are also equally important. Particularly, in the current scenario, where improved lifestyles have led most households to indulge in discretionary spending. These include home and car loans, annual holiday, child’s education, taxes and so on.
This requires proper cash flow planning. To start with the basics, tracking your cash flow requires simple things like recording your deposits and withdrawals diligently. If you have cash inflow, it is a good sign as it means you are having more income than you spent. However, the reverse is bad news because it means you spend more than you earned. The net outflow has to be managed by funding it through borrowings in the short or long term.Of course, funding for asset creation is also there. In case, you own a house and paying an equated monthly instalment for it while the total cost of the house will be much more, it is an asset which will only rise in value over time.nvestments, proceeds from sale of assets, windfalls gains and so on.
On the other hand, money spent can be for essential or discretionary reasons. Essentials would be commitments towards utility bills, education, food, fuel, investments and so on. Loan dues not paid on time may lead to a penalty. Hence honouring commitments is very important as defaults can affect your credit rating.Discretionary or lifestyle-related expenses like dining out, movies, club memberships, shopping will push up your outflow and make your things lopsided on a bad day. The best way to save money around the discretionary expenses is to develop a vigilant attitude toward cutting costs, no matter how small. Successful and intelligent investors are those who control tempting expenses.
On determining the inflow and outflow, taking into account the opening balance, you arrive at the net position. The net position may be surplus cash or deficit. In case it is surplus, you should invest the same in suitable avenues. In case of a deficit, borrow funds if extremely necessary. If you are already servicing a loan, it would be wise to get surplus cash in balance by either cutting back on expenditures or by increasing your income.
Inflow management
While investing in bank and / or company fixed deposits, bonds or debenture, opt for the regular income plan, where interest is paid to your on a quarterly or six-monthly basis. Similarly, you can invest in Post Office monthly income scheme (MIS), which offers interest payable on a monthly basis. If you invest in a mutual fund scheme, go for the dividend option. All these methods will ensure regular flow of money.
This gives dual advantage as you can use this interest income to meet emergency expenditure. Maintaining liquidity in your investment is very essential, that is, investing in liquid avenues is essential. Reason: You can never predict or time the need for cash. It can spring up at any time and for hefty sums. And at times of sudden need, you should be able to dispose of investments without much loss. So invest in instruments that are liquid. Real estate is an illiquid asset class, debt funds are liquid, just to illustrate.
You can also use an investment strategy known as laddering. This calls for establishing a pattern of rolling maturity dates for a portfolio of fixed-income investments. Your portfolio may include fixed deposits or National Savings Certificate (NSC). Then, instead of buying one NSC worth, say Rs 3 lakh for a six-year term, you buy twelve NSCs of Rs 25,000 each, each maturing in either a month or quarter. As each NSC nears its due date, you can reinvest the principal to extend the pattern. Same can be done with bank deposits.
Outflow management
It is very important to avoid a cash crunch at any time, as it may lead you into a debt trap. As you may decide to borrow to bridge the cash gap and in the process borrow more than you can repay. Specially, those who borrow to retire existing debt and keep piling on their liability. It is important to focus on your goals and the value each purchase brings to you. By avoiding lavish spending, you may attain your financial goals earlier.You also need to manage your borrowings. In case of a home or vehicle loan or both, you may prepay a part of the liability at regular intervals, subject to cash availability. And give a breather to your pocket.
Eliminate expenditure on items not very essential by regularly reviewing your costs. Like you could two big holidays in a year than have four small ones and save on the traveling cost. Or, as traveling cost can be very high in the peak seasons, plan holidays in off season. Or, defer purchases that are not needed immediately.
Understanding your cash flow is an important step in financial planning. By knowing where your money is coming from and going to, you can take control of your finances. Monitoring cashflows at regular intervals is prudent for the same. Doing so will help you identify areas where you could improve your cash flow by cutting unnecessary costs. Similarly, without proper cashflow planning, one could easily get caught in a debt trap or fail to create wealth.
Investments and savings are not the only focus of financial planning. The other aspects – cash flow and liability management – are also equally important. Particularly, in the current scenario, where improved lifestyles have led most households to indulge in discretionary spending. These include home and car loans, annual holiday, child’s education, taxes and so on.
This requires proper cash flow planning. To start with the basics, tracking your cash flow requires simple things like recording your deposits and withdrawals diligently. If you have cash inflow, it is a good sign as it means you are having more income than you spent. However, the reverse is bad news because it means you spend more than you earned. The net outflow has to be managed by funding it through borrowings in the short or long term.Of course, funding for asset creation is also there. In case, you own a house and paying an equated monthly instalment for it while the total cost of the house will be much more, it is an asset which will only rise in value over time.nvestments, proceeds from sale of assets, windfalls gains and so on.
On the other hand, money spent can be for essential or discretionary reasons. Essentials would be commitments towards utility bills, education, food, fuel, investments and so on. Loan dues not paid on time may lead to a penalty. Hence honouring commitments is very important as defaults can affect your credit rating.Discretionary or lifestyle-related expenses like dining out, movies, club memberships, shopping will push up your outflow and make your things lopsided on a bad day. The best way to save money around the discretionary expenses is to develop a vigilant attitude toward cutting costs, no matter how small. Successful and intelligent investors are those who control tempting expenses.
On determining the inflow and outflow, taking into account the opening balance, you arrive at the net position. The net position may be surplus cash or deficit. In case it is surplus, you should invest the same in suitable avenues. In case of a deficit, borrow funds if extremely necessary. If you are already servicing a loan, it would be wise to get surplus cash in balance by either cutting back on expenditures or by increasing your income.
Inflow management
While investing in bank and / or company fixed deposits, bonds or debenture, opt for the regular income plan, where interest is paid to your on a quarterly or six-monthly basis. Similarly, you can invest in Post Office monthly income scheme (MIS), which offers interest payable on a monthly basis. If you invest in a mutual fund scheme, go for the dividend option. All these methods will ensure regular flow of money.
This gives dual advantage as you can use this interest income to meet emergency expenditure. Maintaining liquidity in your investment is very essential, that is, investing in liquid avenues is essential. Reason: You can never predict or time the need for cash. It can spring up at any time and for hefty sums. And at times of sudden need, you should be able to dispose of investments without much loss. So invest in instruments that are liquid. Real estate is an illiquid asset class, debt funds are liquid, just to illustrate.
You can also use an investment strategy known as laddering. This calls for establishing a pattern of rolling maturity dates for a portfolio of fixed-income investments. Your portfolio may include fixed deposits or National Savings Certificate (NSC). Then, instead of buying one NSC worth, say Rs 3 lakh for a six-year term, you buy twelve NSCs of Rs 25,000 each, each maturing in either a month or quarter. As each NSC nears its due date, you can reinvest the principal to extend the pattern. Same can be done with bank deposits.
Outflow management
It is very important to avoid a cash crunch at any time, as it may lead you into a debt trap. As you may decide to borrow to bridge the cash gap and in the process borrow more than you can repay. Specially, those who borrow to retire existing debt and keep piling on their liability. It is important to focus on your goals and the value each purchase brings to you. By avoiding lavish spending, you may attain your financial goals earlier.You also need to manage your borrowings. In case of a home or vehicle loan or both, you may prepay a part of the liability at regular intervals, subject to cash availability. And give a breather to your pocket.
Eliminate expenditure on items not very essential by regularly reviewing your costs. Like you could two big holidays in a year than have four small ones and save on the traveling cost. Or, as traveling cost can be very high in the peak seasons, plan holidays in off season. Or, defer purchases that are not needed immediately.
Understanding your cash flow is an important step in financial planning. By knowing where your money is coming from and going to, you can take control of your finances. Monitoring cashflows at regular intervals is prudent for the same. Doing so will help you identify areas where you could improve your cash flow by cutting unnecessary costs. Similarly, without proper cashflow planning, one could easily get caught in a debt trap or fail to create wealth.
Limited health cover for senior citizens Neha Pandey Deoras / Mumbai 21 Jun 12 | 12:22 AM
The hitch: While purchasing a health insurance policy, those above 60 have to pay a higher premium as the age versus health risk metrics are higher. As your age increases, the risk exposure of insurance companies also rises and to maintain a balance, these firms insert some built-in buffers in the form of higher charge.
But experts say these should not serve as deterrents for senior citizens shopping for health plans. Sixty-two-year-old Subhash Gogna and his wife Sushma, are looking to buy a health insurance plan. Gogna has been in good health all life and, hence, never felt the necessity to buy a cover for himself and his wife. His employer’s cover helped matters as well. But, today, he feels the need for health insurance safety. He has no cover as of now. The couple does not have children; otherwise, Gogna says, he would have opted to be covered under their employer-provided group cover.
Says Akshay Mehrotra of policybazaar.com, “We suggest the husband and wife should be covered individually. As taking them under a floater plan will hamper their individual medical needs."
If Gogna takes a Rs 5 lakh cover each for himself and his wife, they will have a separate sum assured for themselves. Whereas, in a family floater plan, they might eat into each others cover as there is no limit on how much each one can use. While Gogna would have to pay Rs 19,854 (Star Health's Red Carpet) for a Rs 5 lakh cover, his wife will have to pay Rs 15,686 (Star Health Medi Classic). The total would be Rs 35,540 annually (with Bajaj Allianz's Individual Health Guard). Had Gogna's wife been over 60, the total would have been over Rs 40,000.
Mahavir Chopra of medimanage.com has a different suggestion. “They could buy a family floater plan, but for a very higher sum assured, that is, not less than Rs 8 lakh." For a Rs 7.50 lakh cover for Gogna and his wife, Max Bupa's Heartbeat Gold will charge Rs 63,324 annually, much higher than individual plans.
However, typically, it is said those in the higher age bracket should take individual cover of a minimum of Rs 5 lakh and a younger family could go for a family floater plan, that is, where the policy proposer is young (up to 40 years) as the premium is decided based on the family proposer's age.
Another problem is the co-payment clause that many of these policies have. For instance, Max Bupa asks for sharing 20 per cent of the claim for those above 65 and National Insurance asks for 20 per cent for pre-existing diseases and 10 per cent for other claims. Similarly, pay attention to room and ICU rent restrictions such as National Insurance and Star Health apply a one and two per cent restriction, respectively.
If either of his sons were looking to buy a health plan, A S Sharma could ask them to become the family proposer and save on high premium. Sharma also wants to buy a health cover. He will hang his boots in November when he turns 65 and his employer provided health plan will cease to exist. Sharma lives alone, has diabetes and high blood pressure. His two sons and their families are settled abroad. He would have preferred to get covered under his sons' group health cover but they do not have any such facility.
Sharma could do well with an individual cover for himself (Rs 5 lakh).
Chopra explains, “Individual cover is suited when you are not in immediate need of it as most insure pre-existing diseases after two-four years but will stay with you for life. This is unlike a group cover, which is best if needed immediately, but depends on your exit from the company. At the same time, the more you delay buying an individual cover, the more you are likely to pay."
For those who have a medical history, he suggests, be covered under a group plan, but buy a sufficient separate cover. Those in good health could be covered under a group plan, but also have a small (Rs 2-3 lakh) separate cover.
Luckily, Sharma and Gogna don't have dependents. But, there may be some who have either a differently-abled or unemployed child or their parents or siblings. There is no option for them.“Differently-abled persons are not covered under health policies, not even under a floater plan. And for a majority of insurers, once a person attains the age of 21, he or she cannot be counted as a child. Thus, they need to have a policy of their own," says Mehrotra. Bajaj Allianz's Individual Health Guard would cost someone between 26 and 40 years Rs 3,283 for a Rs 2 lakh cover.
Know your rights as an insurance buyer
Know your rights as an insurance buyer
Other rights
"There are various other issues about which the insured should be vigilant, such as: the timeframe for processing and settlement of claims; the financial limits of a surveyor (there are cases when a surveyor is appointed for claims which are higher than his eligibility limit); that piecemeal information cannot be sought; that a second surveyor cannot be appointed by the insurance company; various circulars regarding standardised definitions, premium, etc," adds consumer activist Jehangir Gai.
If you are buying a health policy with a term of two years or more, you are entitled to a 15-day 'free-look' period, during which the policy can be cancelled (and the premium refunded) if it doesn't satisfy your expectations. In addition, the insurer cannot delay the decision on approving or rejecting your application for a cover beyond 15 days of submission. Court verdicts constitute another area you need to keep an eye on.
Redress your grievances
If the insurer fails to serve you to your satisfaction despite meticulous compliance, you can flag off the issue to the company. You are entitled to receive a written acknowledgement from the insurer within three working days of the receipt of a complaint.
If it is not addressed during this period, the company is supposed to resolve the grievance within two weeks of its receipt and send a final letter of resolution. Your next stop should be Irda - through the online platform (www.igms.irda.gov.in) or the Insurance Ombudsman offices.
"The final recourse is to approach the consumer forum or a court of law. If a representation is made to Irda, the insured should be vigilant and not wait endlessly for action or communication from Irda, as the time lost there can result in the complaint getting time-barred," sums up Jehangir Gai.
Finally, if you are not satisfied with your insurer's services, you can always propose to "port", or switch your policy to another health insurer while retaining all the continuity benefits.
Previous
IRDA study:One out of every four people do not think that life insurance is important
One out of every four people do not think that life insurance is important, reveals an IRDA sponsored study.
Salient Points of Study
1. The study also suggested that private sector and the government should work together in Public-Private Partnership (PPP) mode to enhance awareness about the benefits of insurance specially in the age group of 20-30 years.
2. It has said that people, specially in rural areas, are not able to clearly comprehend the extent of coverage being offered under particular insurance plan which results in low penetration.
3. It is essential that awareness creation interventions be undertaken targeting the 20-30 year age group.
4. It also suggested different insurance packages for rural poor and urban populace and also highlighted the importance of micro insurance.
5. The study said that the insurance companies or the regulatory authority need to step up efforts to improve the awareness levels across the country.
The above study was conducted by Delhi-based think-tank NCAER at the behest of insurance regulator IRDA.
Categories:
Miscellaneous,
News
Tags: irda, ncaer, news, study
Salient Points of Study
1. The study also suggested that private sector and the government should work together in Public-Private Partnership (PPP) mode to enhance awareness about the benefits of insurance specially in the age group of 20-30 years.
2. It has said that people, specially in rural areas, are not able to clearly comprehend the extent of coverage being offered under particular insurance plan which results in low penetration.
3. It is essential that awareness creation interventions be undertaken targeting the 20-30 year age group.
4. It also suggested different insurance packages for rural poor and urban populace and also highlighted the importance of micro insurance.
5. The study said that the insurance companies or the regulatory authority need to step up efforts to improve the awareness levels across the country.
The above study was conducted by Delhi-based think-tank NCAER at the behest of insurance regulator IRDA.
Categories:
Miscellaneous,
News
Tags: irda, ncaer, news, study
Public Speaking Tips for Financial Professionals
While we can’t necessarily cure stage fright, the tips in this article are designed to minimize your anxiety and help you become as relaxed as possible when your seminar event begins.
Develop a power opener. This could be a story about you or an experience you’ve had. It could be about current events or an anecdote to add “shock value.” It could be a statistic. Regardless of the method you choose, make sure it will help capture your audience’s attention within the first few minutes of your presentation. The objective during the opener is to settle the crowd and focus their attention on you. After you’ve presented your opener, introduce yourself and your company.
Tip: A good source for current events or statistics is Today. There is always a survey or consumer poll on the front page as well as in the money section that may be a good choice for developing your power opener.
After your power opener. Tell the audience why you are there and what you plan to accomplish. Introduce the evaluation form and explain its purpose. Make it clear that you are not there to sell them something, and the only thing you will ask of them is that they complete the evaluation form.
Tip: The audience will be thinking WIIFM — What’s In It For Me. Let them know early in the presentation what they will receive from the workshop.
Ask simple questions and respond simply to their questions. Controlling the group is critical. One long answer to a complicated participant question can throw you off track. Although you need to interact with the participants, keep your answers relatively simple, and if an answer needs a longer explanation, ask the participant to address it with you later. When you ask questions of your audience, a good strategy is to simply ask for a show of hands. For example, “raise your hand if you believe the economy is doing better today than it was last year.”
Tip: If you are asking for a show of hands, make sure that you raise your own hand. This will prompt more people to participate.
Ask the right questions. For most people, thinking of a question on the fly will not work. That’s why we recommend that you write down your questions in advance in your own workbook or story board manual. Then, when you come to that specific slide or image in your presentation, you will have the perfect question ready to ask!
Practice, practice, then practice again. It doesn’t matter how long you’ve been an financial advisor or how many initials you have following your name. To deliver a powerful seminar, you must practice. That doesn’t mean reciting the presentation in your head. You need to deliver the seminar — using the actual words you will use with an audience — several times before you conduct the seminar in front of your live prospects. Give the presentation to your assistant, your spouse — even your dog, if it helps! Practicing the presentation over and over again will help you avoid reading the slide bullets verbatim to the audience — another big “no-no.”
Tip: If there is a podium in the room, do not stand behind it. This isn’t a lecture – this is an interactive financial seminar, and you need to be out among the audience and keeping their attention!
Record yourself on audiotape or videotape. Recording yourself is the best way to learn about your posture, body positioning, hand movements, gestures, eye contact, voice pitch, and more. Take the time to invest in a small camcorder or recording device and tape yourself. You will be amazed at how many times you say “umm,” adjust your tie, or flip your hair. Reviewing the tape can help you focus on problem areas and perfect your delivery skills.
One of the best quotes about public speaking is from Jerry Seinfield: “According to most studies, people’s number-one fear is public speaking. Number two is death. Death is number two. Does that sound right? This means, to the average person, if you go to a funeral, you’re better off in the casket than doing the eulogy.”
By incorporating these tips into your presentation, you may find that public speaking is easier, more enjoyable — and certainly preferable to death.
Insurer told to pay Rs 52 lakh for rejecting medical claim
21 Jun, 2012, 05.45PM IST, PTI
MUMBAI: In a significant order, Maharashtra Consumer Redressal Commission has directed New India Assurance Company to pay Rs 52.07 lakh to a city resident for repudiating her foreign medical claim and deficiency in service.
Presiding member P N Kashalkar ordered the insurance company to pay this amount along with interest at the rate of seven per cent per annum from the date of rejection of the claim, October 20, 2010, till actual realisation, besides Rs 20,000 as costs incurred by complainant Nina Sudhir Thackersey.
The complainant had taken an Overseas Mediclaim Policy from New India Assurance Company for $1,00,000 towards illness and treatment for accident for the period April 26, 2010 to April 25, 2011.
While on her trip to Zurich in Switzerland on May 9, 2010 she complained of constant chest pain and upper abdominal pain, following which she was admitted at Klinik Hirslanden in Zurich.
At the clinic, Nina was examined by Dr Med. A Muller, Dr Henry Perschak and Dr Stefano Tresch and was subsequently admitted in the intensive care unit where she was administered dialysis. Nina was indoor patient at the clinic for 19 days, and was discharged on May 28, 2010.
Nina was asked to stay back for four days and called for re-consultation on June 4, 2010. On June 1, she was examined again by Dr Tresch who advised her by issuing a certificate that she should go back to India accompanied by a doctor. She returned to India on June 2, along with her husband and an Indian doctor.
To Be Called a Pre-existing Disease, It Should Be Certified: Forum
New Delhi District consumer disputes redressal forum, in its order has held that for medical insurance claim settlement, disease can not be said to be pre-existing unless it has been certified so by a doctor on the basis of medical test prior to the purchase of the policy.
This order has come on the plea of Delhi resident Padam Sain Dhingra, who had alleged that National Insurance Company Ltd has arbitrarily rejected his claim of Rs 50,000 incurred by him on his wife’s treatment.
Dhingra’s wife was admitted in Max Balaji hospital on complaint of breathlessness on 23 December 2008 and discharged on 22 January 2009.
Insurance company rejected his claim citing that his wife was suffering from heart problem since 2005 and policy was bought in 2006.
However, forum was not agreed with the company’s argument, it said that it did not have any direct positive evidence of any known sickness of insured, except observation of doctors, made in discharge summary.
Forum observed that doctor in its discharge summary recorded that the patient suffered from heart problem since 2005 on the basis of inference or talks. And on the basis of mere talks, disease can not be said to be pre-existing. If a doctor on talking with a patient gives a particular name to a condition explained by patient, it is not sufficient as a positive evidence of pre-existing disease for purpose of insurance.
Citing that company rejected claim arbitrarily, forum directed insurance company to pay Rs 50,000 as claim to Dhingra and Rs 25,000 as compensation for causing harassment and litigation expenses.
Categories: News | Tags: Health Insurance, Pre-existing Disease
Claim investigator can’t declare driving license to be fake
21-Jun-2012
An insurance claim investigator cannot declare unilaterally a driving licence to be fake without any corroborating report from the transport authority, a Delhi district consumer forum has said. Maintaining that an insurance firm cannot reject a claim based on the "uncorroborated whimsical report" of its claim investigator, the New Delhi District Consumer Disputes Redressal Forum directed Oriental Insurance Company Ltd to pay Rs 1.95 lakh to its policy holder for the damage to his car in an accident.
"It is seen that investigator is not basing his report on any direct report from Regional Transport Authority, but he himself is author of all reports sent to the opposite party (Oriental Insurance). "In the absence of a report of fake driving license from the office Regional Transport Office (RTO), the insurance firm cannot repudiate (a claim) on (the) uncorroborated whimsical report of the investigator," the forum said. The forum’s order came on a plea by Delhi resident Bhupender Bakshi, who had said his vehicle was insured with the firm on the date of accident, September 29, 2008 and he had duly informed it of the same. He said the loss was assessed by the investigator at Rs 1.45 lakh, but later the insurance firm rejected his claim on the ground that his driving license was fake.
The firm in its defence said its investigator had found Bakshi’s driving license to be fake. Rejecting the contention, the bench presided by C K Chaturvedi pointed out to the firm that a letter from the RTO, Agra showed that driving license owned by Bakshi was valid till June 21, 2010 and there was no objection for its renewal. "In these facts and circumstances the repudiation is arbitrary. We find the insurance firm to pay Rs 1,45,000 and award damages of Rs 50,000 to complainant," the bench said.
Source : PTI
Insurance employees seeks merger of four PSU firms
"The government should take a call and initiate immediate steps for merger of the four PSU general insurance companies into a single corporation akin to LIC," Khan told reporters here last night. The four companies together collected a premium of Rs 30,560.74 crore in the financial year 2011-12, an increase of Rs 5,408.49 crore over the previous year, registering a combined growth of 21.50 per cent. These four PSUs posted a combined gross profit of Rs 1334.19 crore for the financial year 2011-12 as against a loss of Rs 24.73 crore in the previous year.
The public sector general insurance industry has retained the market dominance with a share of 58.46 per cent, he said. The association also opposed the proposed move of the government to disinvest public sector general insurance companies. He said that PSU insurers were financially very sound and they have a large asset base and reserves. They are capable of meeting the capital needs through internal resources as and when required.
Source : PTI
Lapsed policy? The agent will chase you
No insurance policy shall remain an orphan forever — so decreed the Lord, oops, the industry regulator. And so, there will be an agent now to remind you about any unpaid premium.
The Insurance Regulatory and Development Authority (Irda) has issued the final guidelines on lapsed and orphaned policies.
A life insurance contract ‘lapses’ when the policyholder does not pay the premium even after the grace period specified by the insurers.
On the other hand, a policy is considered to be ‘orphaned’ when the agent who was servicing it or had sold the policy, is no longer in business.
The existing guidelines suggest that if the policyholder continues to lapse the policy, then it is optional for insurers to continue to allot agents for servicing the policy. The new guidelines instruct insurance companies to delegate an agent to chase the policyholder for timely premium payments.
“This (Irda guidelines) is a step taken in the right direction to service such policies. Policyholders would benefit by renewing their policies,” said Abhay Tewari, chief actuary, Edelweiss Tokio Life Insurance.
Irda’s circular states that “insurance companies should allot any of the lapsed insurance policies to individual insurance agents whose licence is in force for the purpose of conservation and rendering effective policy service to the policyholders”.
This means, if your agent who had sold you the policy is no longer in service, then the company will have to assign a new agent for you.
This is an important development.
Data reveal that more than 3.5 lakh life insurance agents left the industry during the last fiscal.
This, in turn, increased the number of orphaned policies. For, without periodical reminders, the policyholder tends to forget about his/her investments and related obligations like premium payments.
The high lapsation ratio of 20% has been a matter of worry for Irda.
(Lapsation ratio is calculated by dividing the number of lapsed policies by the average number of policies at the beginning and end of the year.)
That’s why, Irda said that active agents who have completed two years in service can now be ‘allottee agents’ (who alone are permitted to service lapsed policies).
Irda’s circular also specifies the way in which lapsed policies should be handled by insurance companies. However, single premium policies, policies bought online and through direct marketing will not get the service of allottee agents.
Electronic fund transfers should come free of cost: Pranab
June 13, 2012 04:25 PM |
MDT/PTI
The Finance Minister said RBI should proactively work and to see if all electronic banking transactions are possible without any charges being levied
New Delhi: Finance Minister Pranab Mukherjee asked RBI to work out a mechanism to ensure that banks charge no fee from customers for electronic transfer of funds. Pointing out that Oriental Bank of Commerce has waived off all charges for electronic transactions up to Rs1 lakh, he said, “I am confident that all the public sector banks would follow this excellent initiative,” reports PTI.
“I would also urge upon Reserve Bank of India (RBI) to proactively work on this front and to see that all electronic banking transactions should be possible without any charges being levied,” he said in his address to CEOs of public sector banks and financial institutions here.
The Department of Financial Services is working on the implementation of an action plan to bring the country's banking payment structure at par with global standards.
“Public sector banks must promote electronic mode of transactions over other modes. They should examine the possibility of making NEFT transactions up to Rs1 lakh free of charges, as has been done by Oriental Bank of Commerce,” he later told reporters.
For outward transactions under RTGS mechanism, banks charge Rs30 for electronic transfer of Rs2 lakh to Rs5 lakh and Rs55 for amounts above Rs5 lakh.
On the other hand, under NEFT the charges range between Rs5 and Rs25.
He also told the bank chiefs to that the use of debit cards to the point of sale without any transaction charges at least for micro and small transactions should be their next objective.
IRDA issues norms on ‘orphan' policies
Hyderabad, June 15:
If your insurance policy is not being serviced due to termination of the agent by an insurer, you will now get relief. The insurance companies are allowed to allot any of the lapsed ‘orphan' life insurance policies to other individual insurance agents with valid licence for rendering effective service to the policyholders.
In the guidelines on servicing of orphan policies issued on Friday, the Insurance Regulatory and Development Authority said the life insurers should notify the particulars of the newly-allotted agent to the policyholders concerned. All policy services will be rendered by the ‘allotee agent' similar to what the insurance agent was rendering, the regulatory said.
Ineligible productsSingle premium life insurance policies or life insurance policies on which no further premiums are due for payment are not eligible for allotment under these guidelines. Life insurance products designed with specific marketing features such as direct/online marketing where no commission outgo is projected are also not eligible for allotment.
The guidelines will come into force with immediate effect, IRDA said.‘Orphan' life insurance policies refer to the policies initially effected by an individual insurance agent whose services are subsequently terminated, removed or deleted from the rolls of the insurer.
nagsridhu@thehindu.co.in
FM Directed LIC to Come Up with Life Insurance Scheme for Farmers
The finance minister, Mr. Pranab Mukherjee, has directed Life Insurance Corporation of India (LIC) to design a life insurance scheme for farmers on the lines of Janashree Bima Yojana, a social security scheme.
This new scheme will be called Kisan Bima Yojana. In this scheme life cover will be extended up to the age of 65-70 years.
The additional premium will be borne by farmers covered under the scheme.
On the coverage of farmers under agriculture insurance, Mr. Pranab Mukherjee said that number of non-loanee farmers has been coming down over the years. He said that Agricultural Insurance Company of India Ltd should work to bring not only all loanee farmers under cover but as many non-loanee farmers as possible. He said that this group is the most marginalized group requiring agricultural insurance and they should be covered on priority basis.
IRDA Clarified Concerns of Life Insurers on Pension Products
Insurance Regulatory and Development Authority (IRDA) has issued a circular clarifying certain concerns raised by life insurers on the guidelines on pension products issued in January 2012 and November 2011.
IRDA clarified that Life insurers will have to provide an immediate or deferred annuity, even in cases where pension products are surrendered before the vesting date.
At the time of surrender or vesting, policyholder will have to buy a single-premium deferred annuity or immediate annuity product from the same insurer from he had bought the original pension plan.
In the case of surrender of Unit Linked Pension Products (ULPPs) after the lock-in period, surrender value should not be less than the fund value.
Surrender during the lock-in period of the unit-linked products should be in line with the existing regulations.
Annuity is an insurance product that pays out income, generally to be used as part of a retirement strategy through a pension plan.
A vesting period is the period of time an investor or other person holding a right to something must wait until they are allowed to fully exercise their rights.
What you should look for in a maternity cover
Maternity is a very special event in every woman’s life. However, in today’s scenario, with medical expenses sky-rocketing, the process of childbirth has become very expensive. Hence, it is advisable for every woman to plan her maternity in advance and make it hassle-free with the aid of health insurance. It is always prudent to be financially secure and prepared against any eventuality even during maternity.
It has been noticed that the proportion of LSCS (Caesarian Section) cases is increasing when compared to the normal delivery cases due to erratic lifestyle. The ratio today stands at 65:35. This has a direct impact on costs that are rising significantly. Therefore, to manage the rising costs associated with pregnancy, it is important to find out whether one has maternity coverage. General insurance companies usually cover maternity under their group health schemes. Insurers today have also introduced relevant riders in health products offered by them and maternity cover is one among them.
Maternity health insurance plans are designed to cover both Caesarean as well as normal births, including pre-mature births. Most people already have an existing health insurance plan. It is important for the insurer to find out if it covers maternity health. There are a few things that one should keep in mind before opting for the maternity cover. One should check whether the company offers maternity in its group insurance plan. Most of the companies cover employees under a group plan and, hence, this is the best option. Most group health insurance policies offered by employers cover maternity expenses up to a limit. While taking an individual policy, women should check if it covers maternity. One should check for four essential things.
First, one should look for the waiting period applicable for claiming maternity expenses; second, they should check the sub-limit; third, they should see whether the cover provides outpatient expenses related to maternity; and fourth, they should always check if there is any specific exclusion related to the cover. Before buying a health policy, women need to ascertain the cover is included in it. In a majority of corporate group policies, maternity cover is an add-on benefit, mostly with a sub-limit not exceeding 50,000. However, in a majority of the corporate policies pre-post natal care expenses are not covered. Some corporates also opt for a cover called ’baby day one cover’, which essentially covers any expense incurred on the treatment of a new-born.
Source : ET
Diesel, CNG and LPG cars: Low on fuel cost, but high on insurance premium
13-Jun-2012
Exchanging your old petrol car for a diesel, CNG or LPG one may be a sensible way to save some money on fuel, especially if you drive a lot. You can also consider fitting a CNG or LPG kit in your old petrol car. However, experts would warn you that you should be prepared to shell out more for maintenance of the car. What they won’t tell you is that even your car insurance premium would go up with your change of car. According to the terms and conditions of India Motor Tariff 2002, an additional premium of Rs60 per vehicle is to be charged towards liability cover on account of CNG/LPG system.
However, the actual difference can be big, depending on the make and age of the vehicle. There is no standard differential and the actual premium varies from model to model and insurer to insurer. "As a broad rule of thumb, typically, there is a difference of approximately 10-20% in the own-damage premium between a petrol car and one running on other fuel types, including diesel, LPG and CNG," says Arun Balakrishnan, CEO, Berkshire Insurance. Here are a few things you should remember about car insurance if you exchange your car for a diesel one or install LPG/CNG kit in your vehicle.
Fuel type and premium
Compared with diesel, CNG and LPG cars, petrol cars are typically considered the least risky. The cost of the petrol variant of a car is typically lower than the diesel and CNG variants. That explains the lower premium. "Typically, diesel cars have a higher premium. This is by virtue of the fact that (a) diesel variants of the cars are more expensive, hence the IDV is higher (b) diesel cars are considered ’high usage’ cars by insurance companies, and, hence, they have a slightly higher risk associated with them," says Balakrishnan.
"It has been observed that usage of vehicles running on CNG/LPG is high and, hence, chances of an accident (involving them) are high when compared with vehicles that run on petrol. Therefore, to a certain extent, the risk is high in these cars vis-a-vis petrol cars," says Amitabh Jain, head - customer service motor, ICICI Lombard. Also, some parts of non-petrol cars are more expensive than petrol cars. This also increases the cost of car insurance.
Source : ET Bureau
LIC Martet share 81% 11-2012
Finance minister Pranab Mukherjee has asked insurance behemoth, Life Insurance Corporation of India (LIC), to design and market products to attract and cover the young generation. The directive for LIC seems to bring down its business risk by bringing in more youngsters to its customer base. “Average age of insured with LIC is 37 years. We have asked LIC to come out with products that will attract the attention of young customers. High average age will increase risk for LIC,” said DK Mittal, secretary, department of financial services.LIC has a market share of around 81 per cent in terms of new business policies, and 71.3 per cent in terms of new business premium during 2011-12.
Mittal spoke to reporters after the finance minister held a meeting with the chairmen of LIC and four public sector general insurance companies on Wednesday. Mukherjee directed general and non-life insurance companies to bring down underwriting losses for profitability.
Mittal spoke to reporters after the finance minister held a meeting with the chairmen of LIC and four public sector general insurance companies on Wednesday. Mukherjee directed general and non-life insurance companies to bring down underwriting losses for profitability.
old carpenter
An elderly carpenter was ready to retire. He told his employer- contractor of his plans to leave the house- building business and live a more leisurely life with his wife enjoying his extended family. He would miss the paycheck, but he needed to retire. They could get by.
The contractor was sorry to see his good worker go and asked if he could build just one more house as a personal favor. The carpenter said yes, but in time it was easy to see that his heart was not in his work. He resorted to shoddy workmanship and used inferior materials. It was an unfortunate way to end a dedicated career.
When the carpenter finished his work the employer came to inspect the house. He handed the front-door key to the carpenter.
This is your house, he said, my gift to you.
The carpenter was shocked! What a shame!
If he had only known he was building his own, he would have done it all so differently.
We do the most of the things having such thoughts in our mind. But we only realize when it comes back to us.
So it is with us. We build our lives, a day at a time, often putting less than our best into the building. Then with a shock we realize we have to live in the house that we have built. If we could do it over, we'd do it much differently. But we cannot go back.
You are the carpenter. Each day you hammer a nail, place a board, or erect a wall. Life is a do-it-yourself project, someone has said. Your attitudes and the choices you make today, build the house you live in tomorrow. Build wisely!
vinay mohanty
United India Insurance plans to deploy 50,000 agents countrywide
Tiruchirapalli: United India Insurance Company Ltd (UIICL) has said it plans to deploy 50,000 agents across the country in the next couple of years to strengthen its marketing team.
"Within the next couple of years, the state-owned insurance company will deploy 50,000 agents across the country in addition to the same number of agents on roll," CMD of the Chennai headquartered company G Srinivasan said.
He said the company would train chosen candidates who have cleared the IRDA stipulated examination.
Srinivasan said UIICL would concentrate on Tier III and four cities. "We will focus on Category 4 locations as defined by Indian Census Operations. In the subsequent phase, we will look at Category five and six locations."
A month's grace period for paying premium can be 31 days
The one-month grace period for payment of insurance premium can be 31 days as well, the apex consumer forum has held while directing the LIC to pay over Rs 4 lakh to a widow for rejecting her claim for the insured amount on her husband's death.
The LIC had rejected the widow's claim on the ground that the policy had lapsed due to non-payment of the insurance premium, which was due the month before her husband's death.
The National Consumer Disputes Redressal Commission (NCDRC) dismissed the plea of the Life Insurance Corporation (LIC) of India, which had given a grace period of 30 days for payment of the quarterly premium of Rs 3,108
"The grace period for payment of the premium has to be taken as 31 days, i.E., upto December 23, 2008 in which event the insurance policy was valid and subsisting at the time and date of death of the life assured and the sum assured would, therefore, be payable after adjusting the unpaid premium," the commission said referring to its own ruling in a similar case.
"As a result, the revision petition is dismissed. The petitioner is directed to remit the payment of Rs 3,96,892 and cost of Rs 10,000 to the respondent/complainant within six weeks of the date of this order," the bench presided by Member Anupam Dasgupta said.
The NCDRC order came on the LIC's plea challenging a decision of the West Bengal State Consumer Disputes Redressal Commission which had dismissed its appeal against the March 2010 order of the Birbhum District Consumer Disputes Redressal Forum.
The district forum had directed the LIC to pay the sum of Rs 3,96,892 to the widow, after deducting the unpaid premium amount of Rs 3,108.
The widow, Rupali Mondal, in her complaint had alleged that LIC had rejected her claim, after her husband died in an accident on December 23, 2008, merely because the quarterly premium due on November 22, 2008 was unpaid. (MORE)
cutesy business standered
A disease can be pre-existing only if it's certified by doctor
Some other Important Points Raised in the Ruling:
1- The disease cannot be said to be pre-existing if it was merely opined so by the doctor on basis of talks with the patient.
2- The disease in order to be pre-existing should be in the knowledge of insured.
3- If a doctor on talking with a patient gives a particular name to a condition explained by patient, it is not sufficient as a positive evidence of pre-existing disease for purpose of insurance.
Source - FT
Categories:
Health Insurance
Tags: claim, health insurance, mediclaim, pre-existing
31 days of grace for premiume payment of LIC
IRDA to relook into bundled-in covers 4/6/12
In the wake of absence of competition and increased chances of forced selling for tying and bundling of insurance with other goods and services, Insurance Regulatory and Development Authority is giving a relook at the tying or bundling of insurance with other goods and services.
This is a common feature where insurance products are sold to the customer along with consumer durables, loans, credit cards or vehicles. The regulator has noticed certain anomalies in the sales of such products and is in talks with various stake holders in order to make the process streamlined.
Source : Financial Express
CHAIRMAN LIC To Book Profits, LIC Seeks More Equity Play
11-Jun-2012
Insurer says 10% cap on stake in a single co too limiting
Life Insurance Corporation, the country’s largest investor, wants higher equity headroom to cash in on trading opportunities and book profits. In an interview with ET, LIC Chairman DK Mehrotra indicated the present exposure cap of 10% in a single stock restricts it from managing its investment book more actively. “We have been investors since 1956, and over the years we have been picking up stakes in companies. When Irda (the Insurance Regulatory & Development Authority) came up with its guidelines in 2008-09, we had very small headroom left,” he said. “Companies where we are reaching 10% or are beyond 10%, we cannot trade in them, not even for booking profit. If I trade, as per the regulation, I cannot go above 10% again. That’s preventing me from booking profits in good scrips,” Mehrotra said.
Irda, the insurance regulator, had said that rules could not be eased for just one company and there should be a level playing field in the industry. The rule says no insurer should own more than 10% in a company. Under the circumstances, if LIC offloads, say, 2% of its 12% stake in a firm, it cannot buy back the shares at a later date as the shareholding will be capped at 10%. LIC had recently stepped in to buy stakes in many stateowned lenders such as Punjab National Bank and Allahabad Bank. It holds over 10% in companies such as MTNL, HPCL and Tata Steel. LIC has suggested the regulator should allow it to grandfather investments made till 2008. The insurer has held on to some investments for 20-25 years. It has not been able to book profits in companies where other investors have made a killing.
Source : ET
Irda to ban highest NAV-guaranteed products
The Insurance Regulatory and Development Authority (Irda) is set to ban the controversial highest net asset value (NAV)-guaranteed products, its chairman J Hari Narayan said on Saturday. “Yes, we are considering it.
We have not really issued any order, but we are actively considering it,” Hari Narayan told reporters on the sidelines of a seminar on ‘Policyholder Protection and Welfare’.
Source : Business Standard
IRDA to Make Claim Settlement a Speedy Process
Insurance Regulatory and Development Authority’s (IRDA) draft guidelines on health insurance sector has proposals that can bring clarity on many critical issues such as claim settlement, if draft guidelines finalized in its current form then it will make claim settlement a speedy process.
In its draft guidelines IRDA has proposed that within 30 days of receipt of complete documents, an insurer have to settle the claim. If the insurer, for any reasons to be recording in writing and communicated to the insured, decides to reject a claim under the policy, then it should do it within 30 days from the receipt of complete documents.
IRDA has also sought to standardize the operations of the Third Party Administrators (TPAs) who play a key role in processing the claims. As per the proposed provision TPA will have to compulsorily explain the rationale behind claim rejection.
This move of IRDA has followed the series of court decisions against the health insurers pertaining to settlement of claims. Then IRDA had promised to frame the guidelines pertaining to health insurance claims.
At present, though there are regulator mandated norms for claim settlement but in the absence of standard claim settlement norms, there have been cases where claim disbursement was delayed up to six months.
Posted by Bijay on June 5, 2012 at 4:41 pm under News.
GIC Posted Net Loss of Rs 2,490 cr in 2011-12
In its 40 years of history, for the first time country’s only reinsurer, General Insurance Corporation of India (GIC) has posted a net loss of Rs 2,490 crore in FY’12.
Company’s gross premium for FY’12 stood at Rs 13,618 crore which is the rise of 16% on year-on-year basis. Company’s 39% income was from foreign markets.This loss is the result of exposure to number of catastrophic events abroad such as Japan’s earthquake, floods of Thailand and Australia etc.
In domestic market third party motor pool losses contributed to the loss of the company. On account of third party motor pool company took a hit of Rs 811 crore. Though as per Regulations Company could write-off the losses over the next two years but company absorbed the entire loss this year itself.Going ahead, company is planning to reduce the volume of retrocession business. Retrocession’ business refers to reinsuring global reinsurers. Last year’s losses of the company were mainly due to this business.
GIC currently enjoyes an A- (excellent) rating from A.M. Best, is expecting to maintain its rating in current fiscal despite huge losses.Posted by PolicyMantra on June 6, 2012 at 12:58 pm under News.
Tags: AM Best, General Insurance Corporation, GIC, Japan Earthquake Losses
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DK Mehrotra takes over as LIC chairman
Mr D.K. Mehrotra took charge as Chairman of the Life Insurance Corporation of India on Thursday.
He headed the corporation as Current-in-charge Chairman during the last year.
Mr Mehrotra joined Life Insurance Corporation of India as a Direct Recruit Officer in Jamshedpur Division in 1977. He has been the Managing Director of LIC since 2005. He has held important portfolios such as Investment, Personnel, Information Technology, Actuarial, Engineering, International Operations, Corporate Communications etc. LIC’s market share in premium stands at 71.36 per cent and 80.90 per cent in policies.
Alternative treatments are referred to as Ayush (Ayurveda, Unani, Sidha and Homeopathy).
Even policies that cover alternative treatments, excludes naturopathy treatment, acupressure, acupuncture, magnetic therapy, massages, steam bathing and shirodhara.
At present alternative treatments are covered by only seven non-life insurance companies that even with limits and conditions. Insurers that cover hospitalization under alternative treatments include four PSU non-life insurers –National Insurance, Oriental Insurance, New India Assurance and United India Insurance and three private insurers -TATA AIG, HDFC Ergo and CholaMandalam General Insurance.
Country’s largest general insurer, New India Assurance, covers alternative treatments up to 25% of the sum assured. TATA AIG’s MediPrime cover alternative treatments with limits. National Insurance covers alternative treatments up to the sum insured in their individual policy.
In many ways, treatment under alternative forms of medicines is quite similar to the treatment procedures followed under allopathic medicines. But because alternative forms of medicine are considered outside the scope of traditional medicine, most of the non-life insurers do not cover it under health insurance policies.
IRDA Issued Draft Guidelines for Health Insurance Policies
In its draft guidelines on health insurance policies, Insurance Regulatory and Development Authority (IRDA) has suggested sweeping changes. Once these guidelines come into effect, it will not only be beneficial for policyholders but it will also increase the transparency of the business.
Draft Guidelines
Entry age: IRDA has recommended that anyone up to the age of 65 years can buy a health insurance product. It will be beneficial for senior citizens as till now insurers could deny health cover for people over 60 years as it was not mandatory.
Renewability: IRDA has also suggested lifetime renewability of health insurance product. Till now insurer had set the renewability age at just 50-55 years based on past claims.
Hospitalization: If these guidelines come into effect, than the preferred network of hospitals clause will be removed. That means you don’t have to find a hospital which has an agreement with your insurer at the time of need, you can go to any hospital for the treatment.
Policy document: IRDA has also sought more clarity from the insurer at the time of policy issuance and settlement. For the customer’s ease a standard policy form will be issued, which will highlight the important policy details for the customers.
The policy document will also required to mention the cumulative bonus that a policyholder earns. Insurer rewards policyholder with bonus, if he doesn’t make any claim for a specified period.
Settlement: At the time of settlement, IRDA has introduced a form asking insurance company to provide clear reasoning for claim rejection.
Insurer is also required to provide detailed explanation at the time of loading of the policies. Loading refers to the increase in the premium after the claim has been made.
Multiple policies: If you have more than one health insurance policy, you can get your claim settled by any of the insurer. It is left to the Insurers to settle the bill amongst them later. Earlier insurers had to share the claim payouts which lead to delay in claim settlement.
Alternative treatments: IRDA has proposed that non-allopathic treatment in government recognized hospitals should come under the ambit of health insurance.
Standard definitions: Due to absence of standard definitions insurers were rejecting claims. Hence, there will be definitions for many terms.
Medical reimbursement: You will get a full refund for the medical test you undertake before taking a policy. The medical reimbursement for the policyholder is pegged at 50% for non-life insurance policy and 100% for life insurance policy.
Policy tenure: IRDA has proposed that any policy of Life Insurance Company should have minimum tenure of four years while any health insurance policy by general insurer should have maximum tenure of three years. Rationale behind this move is that longer tenure allows better servicing of the policy.
However, insurers are not excited with the guidelines as per them it has some suggestions that restrict competition and innovation in the industry.
Draft Guidelines
Entry age: IRDA has recommended that anyone up to the age of 65 years can buy a health insurance product. It will be beneficial for senior citizens as till now insurers could deny health cover for people over 60 years as it was not mandatory.
Renewability: IRDA has also suggested lifetime renewability of health insurance product. Till now insurer had set the renewability age at just 50-55 years based on past claims.
Hospitalization: If these guidelines come into effect, than the preferred network of hospitals clause will be removed. That means you don’t have to find a hospital which has an agreement with your insurer at the time of need, you can go to any hospital for the treatment.
Policy document: IRDA has also sought more clarity from the insurer at the time of policy issuance and settlement. For the customer’s ease a standard policy form will be issued, which will highlight the important policy details for the customers.
The policy document will also required to mention the cumulative bonus that a policyholder earns. Insurer rewards policyholder with bonus, if he doesn’t make any claim for a specified period.
Settlement: At the time of settlement, IRDA has introduced a form asking insurance company to provide clear reasoning for claim rejection.
Insurer is also required to provide detailed explanation at the time of loading of the policies. Loading refers to the increase in the premium after the claim has been made.
Multiple policies: If you have more than one health insurance policy, you can get your claim settled by any of the insurer. It is left to the Insurers to settle the bill amongst them later. Earlier insurers had to share the claim payouts which lead to delay in claim settlement.
Alternative treatments: IRDA has proposed that non-allopathic treatment in government recognized hospitals should come under the ambit of health insurance.
Standard definitions: Due to absence of standard definitions insurers were rejecting claims. Hence, there will be definitions for many terms.
Medical reimbursement: You will get a full refund for the medical test you undertake before taking a policy. The medical reimbursement for the policyholder is pegged at 50% for non-life insurance policy and 100% for life insurance policy.
Policy tenure: IRDA has proposed that any policy of Life Insurance Company should have minimum tenure of four years while any health insurance policy by general insurer should have maximum tenure of three years. Rationale behind this move is that longer tenure allows better servicing of the policy.
However, insurers are not excited with the guidelines as per them it has some suggestions that restrict competition and innovation in the industry.
Discounts on Own-Damage Covers Lowered by 20%
Insurance Regulatory and Development Authority (IRDA) recently scrapped third party motor pool and replaced it with declined pool. It will have lower industry contribution for insurance cover at about Rs 1,200 crore against Rs 6,000 crore earlier.
Discounts on motor own-damage have come down after IRDA increased premiums on third party premium rates. This year third party premium has been increased by 10%.
Third-party motor risk, which earlier went to third party motor pool, will now be borne by individual companies and they have to take claims on their book. This will prompt companies to emphasise on better underwriting and management of risk.
Motor insurance policy basically consists of two parts i.e. third-party-liability and own-damage covers. Third party cover is mandatory by law while own-damage cover is optional.
Soon Insurers to Offer Health-Plus-Life Combo Products
Soon life insurance companies will be allowed to tie-up with health insurance companies to offer health-plus-life insurance combi products. Product will be a combination of pure term insurance cover and health insurance cover.
Life Insurance Company will underwrite the term insurance policy covering life and non-life insurance company will underwrite health insurance policy. One life insurance company will be allowed to tie-up with only one non-life insurance company and vice-versa.
Life Insurance Company will underwrite the term insurance policy covering life and non-life insurance company will underwrite health insurance policy. One life insurance company will be allowed to tie-up with only one non-life insurance company and vice-versa.
ICICI Prudential Life fined record Rs.1.18 cr
ICICI Prudential Life fined record Rs.1.18 cr Anirudh Laskar mint See similar story in: The Times of India India’s insurance regulator imposed a record Rs.1.18 crore penalty on the nation’s second-largest private life insurer ICICI Prudential Life Insurance Co. Ltd for violations that include paying agents and brokers commissions exceeding the permissible limits. The penalty is the highest imposed by the Insurance Regulatory and Development Authority (Irda) on a life insurer. During an inspection in November and December 2010, Irda observed 42 possible violations by ICICI Prudential Life. The insurer was charged for six of them. The penalties include a Rs.40 lakh fine on ICICI Prudential for paying commissions above the permissible limit to nine corporate agents during fiscal years 2010 and 2011. ICICI Prudential paid commissions higher than permissible limits to nine of its corporate agents, including India Infoline Insurance Services Ltd and Sharekhan Financial Services. An email sent to India Infoline Insurance after a phone call didn’t elicit a response at the time of going to press. Calls made to Sharekhan Financial remained unanswered after office hours. In fiscal 2011, ICICI Prudential paid India Infoline a commission of Rs.36.26 crore, above the maximum payable amount of Rs.31.68 lakh. NetAmbit was paid Rs.26.52 crore, higher than the permissible commission of Rs.13.48 crore. In fiscal 2010, India Infoline was paid Rs.49.33 crore in commissions, above the limit of Rs.2.97 crore. There were eight such instances, and the regulator said it may take action against the corporate agents as well. “This is an exceedingly serious violation,” Irda said in its order on Wednesday. Rajiv Adhikari, vice-president, corporate communications, ICICI Prudential Life, said, “Our managing director is abroad and I don’t know what to comment immediately.” Telephone calls made to Sandeep Bakhshi, CEO, ICICI Prudential Life, were not answered. ICICI Prudential Life was found to have entered into various incomplete agreements with its group companies without specifying the fees, though they were acting as corporate agents and referral partners of the insurer and were receiving commissions and referral fees. Also, the company was found to be making payments to its distribution channel partners in the name of “sales, marketing and business support expenses” and “agents incentives.” Irda imposed a penalty of an additional Rs.40 lakh as the insurer was found to have given incentives to its referral partners in the name of infrastructure support, violating norms during fiscal 2010 and 2011. Furthermore, the company was found to have given incentives to brokers beyond the legal limits. During fiscal 2010, ICICI Prudential remunerated Bajaj Capital Insurance Broking Ltd and Standard Composite Insurance Brokers Ltd 152.94% and 402.53% of the legal limit, respectively, higher than prescribed limits. There were seven such instances in fiscal 2010 and 2011, involving six insurance brokers. Irda imposed a fine of Rs.20 lakh, stating that action would be taken against the brokers as well. The regulator was concerned about the insurer creating multiple code numbers for a single corporate agent or a broker based on the locations of the business procured. While penalising ICICI Prudential with an additional Rs.11 lakh, Irda said, “from the inspection, it is evident that there are several similar cases where the number of specified persons is grossly disproportionate to the number of locations in which the corporate agent is functioning. “This violation is a significant violation because it encourages sale of insurance by unqualified persons and opens gates to several malpractices such as mis-selling, multiple level marketing, etc. For all these reasons, Irda is satisfied that this is a grave matter and a deterrent punishment must be imposed on the insurer,” Irda said in its order. Irda chairman J. Hari Narayan directed ICICI Prudential Life to pay the penalty within 15 days. In April, ICICI Prudential Life insurer collected a premium of Rs.168.54 crore, 43.15% less than what it garnered in April last year.
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