vinay mohanty
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.
the Ordinance on Insurance Bill has been promulgated by the Government of India
Dear Leaders,
We would like to inform you that the Ordinance on Insurance Bill has been promulgated by the Government of India and it has been signed by the Honourable President Sri Pranabh Mukherjee. Please find the following gist of Ordinance issued by the Ministry of Finance.
Insurance Laws (Amendment) Ordinance, 2014 to Make Amendments to the Insurance Act, 1938, the General Insurance Business (Nationalization) Act, 1972 and the Insurance Regulatory and Development Authority Act, 1999.
The Union Cabinet had approved the promulgation of the Insurance Laws (Amendment) Ordinance 2014 to amend the Insurance Act, 1938, the General Insurance Business (Nationalisation) Act, 1972 and the Insurance Regulatory and Development Authority Act, 1999, in accordance with the Insurance Laws (Amendment) Bill 2008 as reported by the Select Committee of the Rajya Sabha, and for suitably introducing it in the Parliament in the next session for consideration and passing.
The Ordinance has now been signed by the Hon’ble President of India.
2. The proposed step is also for furtherance of the broad objective of deepening the reform process in the economy in general and the Insurance sector in particular. This is of paramount importance to create an investor friendly environment in the country to achieve the various goals related to enhanced investment, economic growth and job creation in the economy.
3. The promulgation of the Ordinance would achieve the above critical objectives through specific provisions proposed to be introduced in the Insurance Laws through it. Some of these key aspects incorporated in the proposed Ordinance are as follows:
(a) The Ordinance is aimed at amending the Insurance Act, 1938, the General Insurance Business (Nationalization) Act, 1972 and the Insurance Regulatory and Development Authority Act, 1999 to remove archaic and redundant provisions in the Insurance Laws, empower IRDA to enable more effective regulation and enhance the foreign equity investment cap in an Indian Insurance Company from 26 to 49% with the safeguard of Indian ownership and control.
(b) Insurance penetration in India is very low compared to the global average. The sector is in need of capital to expand and ensure better access to insurance services, especially in rural areas and for economically weaker sections. Enhancement of the foreign equity cap from 26% to 49% with the safeguard of Indian Ownership and Control is a critical aspect of the Ordinance, which will potentially enhance Capital availability.
2. The proposed step is also for furtherance of the broad objective of deepening the reform process in the economy in general and the Insurance sector in particular. This is of paramount importance to create an investor friendly environment in the country to achieve the various goals related to enhanced investment, economic growth and job creation in the economy.
3. The promulgation of the Ordinance would achieve the above critical objectives through specific provisions proposed to be introduced in the Insurance Laws through it. Some of these key aspects incorporated in the proposed Ordinance are as follows:
(a) The Ordinance is aimed at amending the Insurance Act, 1938, the General Insurance Business (Nationalization) Act, 1972 and the Insurance Regulatory and Development Authority Act, 1999 to remove archaic and redundant provisions in the Insurance Laws, empower IRDA to enable more effective regulation and enhance the foreign equity investment cap in an Indian Insurance Company from 26 to 49% with the safeguard of Indian ownership and control.
(b) Insurance penetration in India is very low compared to the global average. The sector is in need of capital to expand and ensure better access to insurance services, especially in rural areas and for economically weaker sections. Enhancement of the foreign equity cap from 26% to 49% with the safeguard of Indian Ownership and Control is a critical aspect of the Ordinance, which will potentially enhance Capital availability.
(c) Towards these ends, the content of the Ordinance is aimed also at allowing insurance companies to raise capital through new and innovative instruments, which would help capital intensive insurance industry to garner resources for business growth;
(d) The Ordinance will also enable empowering IRDA to regulate key aspects of Insurance Company operations in areas like solvency, investments, expenses and commissions, which is in keeping with global best practices of regulation. The absence of such empowerment for IRDA potentially undermines faith in our regulatory framework and discourages investment in the sector.
(e) The Ordinance will also substantially enhance penalty provisions to ensure compliance with Insurance Laws by companies, which is essential to uphold the consumer interest.
(d) The Ordinance will also enable empowering IRDA to regulate key aspects of Insurance Company operations in areas like solvency, investments, expenses and commissions, which is in keeping with global best practices of regulation. The absence of such empowerment for IRDA potentially undermines faith in our regulatory framework and discourages investment in the sector.
(e) The Ordinance will also substantially enhance penalty provisions to ensure compliance with Insurance Laws by companies, which is essential to uphold the consumer interest.
vinay mohanty
best ever laser show 2015 as gift of newyear
happy newyear 2015
best ever laser show 2015 as gift of newyear
vinay mohanty
Rajya Sabha Select Committee recommends 49% cap on foreign investment in insurance
Approving a government bill to amend the Insurance Act, the Select Committee in its report to the Rajya Sabha recommended a composite foreign investment cap of 49 per cent which would include Foreign Direct Investment (FDI and portfolio investment.
It also recommended that penalties on insurance companies be linked to seriousness of offences committed by them. It has suggested mechanism to ensure that there is minimum scope for subjective interpretation.
The panel suggested that the capital requirements may be retained at the Rs 100-crore level to ensure health insurers have adequate capacity for providing critical services to citizens, and it also pitched for giving top priority to this segment.
"The insurance Bill be passed," the Committee said, adding the government may take more measures as recommended by it
The committee suggested that the Law Ministry and the insurance regulator IRDA should modify the definition of the term "nominee" in order to remove any ambiguity. The Supreme Court had suggested that there was no need for two categories of nominees -- beneficiary nominee and collector nominee.
vinay mohanty
The Rajya Sabha had in August appointed a 15-member Select committee to scrutinise the long pending Insurance Laws (Amendment) Bill, 2008. The Bill was held up for nearly six years on account of political differences.
The panel, headed by Rajya Sabha MP Chandan Mitra, has suggested inclusion of a person from the insurance industry in the Securities Appellate Tribunal as an expert.It also recommended that penalties on insurance companies be linked to seriousness of offences committed by them. It has suggested mechanism to ensure that there is minimum scope for subjective interpretation.
Meanwhile, the Select Committee unanimously agreed not to bring down the paid-up equity capital in the health insurance sector as compared to the life and general insurance.
The panel suggested that the capital requirements may be retained at the Rs 100-crore level to ensure health insurers have adequate capacity for providing critical services to citizens, and it also pitched for giving top priority to this segment.
"The insurance Bill be passed," the Committee said, adding the government may take more measures as recommended by it
it also recommended that adequate protective mechanism be instituted to ensure agents get their commission and the commission structure be determined by IRDA on market conditions.
IRDA flags wage issue to stem talent exodus
MUMBAI: The insurance regulator wants to incentivise the agency by fixing a minimum wage to retain talent in the industry. The number of agents has been coming down sharply in the life and nonlife insurance sectors in the past financial year.
While the private sector insurers appointed 2.83 lakh agents, they terminated the services of 4.14 lakh in the same period. In the case of LIC, 3.87 lakh agents were asked to go while 2.81 lakh were recruited. "There should be some minimum protection wage for insurance agents also. Companies should pay a minimum wage of Rs 10,000 per month," said TS Vijayan, chairman of Insurance Regulatory & Development Authority (IRDA). On an average, an agent earns Rs 4,000 a month at present. Vijayan called for protection of agents, saying that if companies comply with the Minimum Salary Act, they will naturally contribute to the employment market of the country. Agents can earn up to 40% of the firstyear's premium on traditional, or conventional policies.
The recent rally in the stock market has led to a rise in the sale of unit-linked insurance plans while traditional plans have declined. Also, companies have changed focus since the revamp of product norms last year when the regulator introduced a cap on surrender charges. Vijayan argued that there are countries which pay as high as 160% of the first-year's premium as commission to agents, adding that fixing of commission should be left to individual companies.
According to the Insurance Act, commission on traditional insurance plans is capped at 40% of the firstyear's premium. However, commission on unit-linked insurance plans is capped since 2010, when the regulator capped the overall charges, including policy administration and premium allocation charges. As on March 31, 2013, there were 21.2 lakh agents, according to the latest IRDA data.
On higher FDI in the insurance sector, Vijayan said 26% private participation showed an increase in market penetration, entry of new companies and the number of agents. "This could be termed a success, but it has to be seen in the context of the benefits it brings to the country and the customer. If one looked at the number of people in the 0-18 age group and considered 18 as the earning age, then nearly 2.5 crore individuals would enter the job market each year for 20 years in Mumbai alone. Add to this, the increase in the number of vehicles, houses and other assets, the number of policies that will be sold is phenomenal," he said.
On higher FDI in the insurance sector, Vijayan said 26% private participation showed an increase in market penetration, entry of new companies and the number of agents. "This could be termed a success, but it has to be seen in the context of the benefits it brings to the country and the customer. If one looked at the number of people in the 0-18 age group and considered 18 as the earning age, then nearly 2.5 crore individuals would enter the job market each year for 20 years in Mumbai alone. Add to this, the increase in the number of vehicles, houses and other assets, the number of policies that will be sold is phenomenal," he said.
Vijayan stressed that there must be a concerted effort between the industry, the regulator and the government in creating public awareness about the benefits of insurance.
10 golden words to stop children net addict
10 golden words to stop children net addict
1.
dont give net phones to children
2.
use computer with open area so that we shall
know
3.
night time don't give cell to children
4.
Limit the use of net for children
5.
face book will spoil the children watch it
6.
Divert the children towards play, yoga, sports,
music
7.
dont use internet unlimited before children
8.
spend some time with children
9.
watch children what they doing, and advise
10.
love equily both boy and girl child
Professional tax is the tax that you on the monetary financial gains
the technicalities of the subject.
Professional tax is the tax that you on the monetary financial gains that you have attained by virtue of providing to a client/patient. Professional services are those which deal in intangible services rather than tangible goods.
For example a doctor gives consultation to his patients, an architect provides design service to his clients, a layer gives his advice on legal matters, CA's do the accounting for their clients. All these services are not in form of goods but they do help a person in furthering his or her interests as the case might be.
Following professions are included in professional services:
1. Architect
2.Lawyer
3. Doctor
4. CA's
5.fashion desiners
6.LIC agents
7. hair stylists
Basically anyone who provides a service which does not usually involve sale and purchase of items and/or goods comes under the professional category.
Professional tax is to be paid by the client and is about 9% of the total cost of the services rendered. This tax is usually added along with the bill of the services which is given for the services rendered by the professional. However in India most clients don't pay this tax owing to the chalta hai, attitude.
vinay mohanty
Professional tax is the tax that you on the monetary financial gains that you have attained by virtue of providing to a client/patient. Professional services are those which deal in intangible services rather than tangible goods.
For example a doctor gives consultation to his patients, an architect provides design service to his clients, a layer gives his advice on legal matters, CA's do the accounting for their clients. All these services are not in form of goods but they do help a person in furthering his or her interests as the case might be.
Following professions are included in professional services:
1. Architect
2.Lawyer
3. Doctor
4. CA's
5.fashion desiners
6.LIC agents
7. hair stylists
Basically anyone who provides a service which does not usually involve sale and purchase of items and/or goods comes under the professional category.
Professional tax is to be paid by the client and is about 9% of the total cost of the services rendered. This tax is usually added along with the bill of the services which is given for the services rendered by the professional. However in India most clients don't pay this tax owing to the chalta hai, attitude.
vinay mohanty
Limited Payment Endowment Plan (Table No.830)
As the name suggests, it is the limited payment Endowment Plan. It means, suppose you opted a term of 12 year, then you will not pay the premium for the full 12 years. Instead, your premium payment sieges earlier than the maturity period.Below are the features of Limited Payment Endowment Plan (Table No.830)
Benefits- Death Benefits-
On death of policy holder during the policy period, his or her nominee will receive Sum Assured on Death+Accumulated Bonus and Final Additional Bonus if declared by LIC.
Sum Assured on Death will be higher of below.
- 10 times of annualized premium paid.
- Absolute amount to be payable i.e 125% of Basic Sum Assured.
Also do remember that such death benefit shall not be less than 105% of all premiums paid as on date of death. Premium mentioned for this benefit excludes taxes on premium, any extra premium you paid and rider premiums.
Survival Benefits-
If policy holder survives till the end of policy term then he/she will receive Sum Assured on Maturity+Bonus+Final Additional Bonus (if declared by LIC). Here Sum Assured on Maturity is equal to Basic Sum Assured.
Premium rates not yet available to share with you all. So let us wait to analyze more.
At first look, do you feel it as a great product? I do not think so. Because this is an endowment product. So as usual, if you buy this then you will end up in lower life insurance and lower return. A second point to remember is, this plan even though called as LIMITED, but see the difference between the tenure of the plan and the premium paying tenure, there is not much difference. So even though you feel bit comfort that your premium payment will end early, but it is exaggerated almost nearer to maturity years. As this product is limited payment endowment plan, you may see slightly higher premium than a regular plan of LIC.
These are the current available information about this plan. I will update this post as and when I get the information about the same.
vinay mohanty
Subscribe to:
Posts (Atom)