Top Stories 

Insurance sector may attract Rs. 300 bn in 5 yrs: Reports

According to media reports, foreign joint venture partners in Indian insurance companies may attract funds worth Rs. 300 billion in the next five years if the FDI limit in the business is increased to 49% from the current 26%.

Indian insurers have invested Rs. 210 billion in the last 10 years, while foreign investors have invested Rs. 70 billion in the past 12 years. Major life insurers such as SBI Life, ICICI Prudential and Bajaj Allianz have started to pay dividend to shareholders, the reports added.

The reports pointed out bank-promoted insurers won’t find it easy to invest capital with the introduction of Basel-II requirements. At present, the country has around 13 bank-promoted insurers in the life and general insurance sector… Read more

Cabinet proposes hike in FDI for insurance to 49%

The Union Cabinet approved necessary official amendments in the Insurance Laws (Amendment), Bill 2008, pending in the Rajya Sabha, with such drafting and consequential changes, if any, in consultation with the Legislative Department.
These amendments are aimed at removing archaic and redundant provisions in the legislations and incorporating certain provisions to provide Insurance Regulatory Development Authority (IRDA) with flexibility to discharge its functions effectively and efficiently. The overall objective is to further deepen the reform process which is already underway in the insurance sector.

The official amendments will be moved in the Insurance Laws (Amendment) Bill, 2008 pending in the Rajya Sabha… Read more

Move to increase FDI in insurance is a right step: Insurers say

The government on Thursday decided to move ahead with its proposal to hike foreign investment ceiling in the insurance sector to 49% from the present 26%.

According to Dr Amarnath Ananthanarayanan, CEO & MD, Bharti AXA General Insurance, given the policy paralysis the slew of regulatory announcements including this one pertaining to insurance will surely strike the right cord with all the stakeholders. The move to increase FDI in insurance is a step in the right direction as it will increase the contribution from the foreign players in all technical aspects of the insurance business including product development and claims settlement mechanisms. This is currently an area of improvement for the Indian General Insurance Industry…Read more

Cabinet approves amendments to PFRDA Bill

The Union Cabinet approved the introduction of certain official amendments to the Pension Fund Regulatory and Development Authority Bill, 2011. These official amendments have been necessitated in view of the recommendations of the Standing Committee on Finance which has examined the Bill. Based on the recommendations of the Standing Committee on Finance, the Government has decided to accept the following: That the subscriber seeking minimum assured returns shall be allowed to opt for investing his funds in such schemes providing minimum assured returns as may be notified by the Authority.

Withdrawals not exceeding 25% of the contribution made by subscriber will be permitted from the individual pension account subject to the conditions, such as, purpose, frequency and limits, as may be specified by regulations by the Pension Fund Regulatory Authority and Development Authority (PFRDA)… Read more

Draft IPO norms for general insurer to be finalised soon

The draft IPO (initial public offer) norms for general insurers would become final in the couple of two weeks, according to the Insurance Regulatory and Development Authority (IRDA).

IRDA chairman J Hari Narayan said that the regulator has finalised the amalgamation norms for life insurers and IPO norms of non-life this year. Thus, these two will be made regulation soon and the IRDA board will consider these norms for approval. Mr Harinarayan was speaking at CII’s 6th Health Insurance Summit 2012 in New Delhi… Read more

Financial regulators to be merged in single agency: FSLRC

The Financial Sector Legislative Reforms Commission (FSLRC)—a government-appointed panel—on 1st October said that major regulators in the country such as SEBI (Securities and Exchange Board of India), IRDA (Insurance Regulatory and Development Authority), Pension Fund Regulatory and Development Authority (PFRDA) and Forward Markets Commission (FMC) should be merged into a unified financial agency (UFA), according to media reports.

The FSLRC was constituted by Ministry of Finance in March, 2011. The setting up of the FSLRC was the result of a felt need that the legal and institutional structures of the financial sector in India need to be reviewed and recast in tune with the contemporary requirements of the sector… Read more

More clarity needed on insurance product design

The Insurance Regulatory and Development Authority (IRDA) is planning to introduce a system for faster approval of insurance products, according to media reports.
The industry wants IRDA to allow insurance companies to launch products without obtaining approval from the regulator. The system is called ‘use’ and ‘file’, the reports added. A precondition is that IRDA would introduce broad guideline and products that do not meet the regulator's guidelines in the subsequent test would be withdrawn from the market… Read more

Domestic News

Banks may not sell products of multiple insurers: Reports

Banks may not be allowed to sell policies of multiple insurers immediately as the Reserve Bank of India doesn’t want them to take additional risks, according to media reports.

In case of corporate agency, the life insurer is responsible for mis-selling of the product and not the agent, while in a broking model it is the broker who is responsible for mis-selling. The bank insurance model (BIM), also known as bancassurance, is the partnership or relationship between a bank and an insurance company whereby the insurance company uses the bank sales channel in order to sell insurance products.

Bancassurance allows the insurance company to maintain smaller direct sales teams as their products are sold through the bank to bank customers by bank staff and employees as well… Read more

Govt announces 12-point action plan for life insurance

The finance minister P Chidambaram has announced a host of measures to revamp the life insurance sector. These measures are aimed to benefit the insurers and policyholders.

The insurance regulator is planning to ‘Use and File’ mechanism for introduction of simple and easily understood products. Life insurers, subject to some conditions, can introduce a product even without getting formal approval from the IRDA (Insurance Regulatory and Development Authority).

IRDA is also considering 30 days time period for approval of products filed by insurers to the regulator. IRDA will also create and notify guidelines to reduce the arbitrage between ‘units’ and ‘traditional products’… Read more

IRDA to develop 10 standard products: Reports

The Insurance Regulatory and Development Authority (IRDA) today said it try and work to develop 10 standard products which can be launched by insurers without getting the regulator’s approval, according to media reports.

IRDA will work closely with Life Insurance Council and General Insurance Council to check if they can develop such products, the reports added… Read more

ASSOCHAM submits Reviving Growth Momentum report 

ASSOCHAM has submitted “Reviving Growth Momentum” in important sectors of the economy while submitted paramount agenda to Finance Minister, P. Chidambaram called on Wednesday.

The report consists of concerns of the investors and their possible remedies. The government, of late, has initiated policy reforms on some of the suggested measures that have brought about a perceptible change in the outlook of the economy as reflected in the positive impact on capital markets and rupee appreciation. Though issues of high Twin deficits and high inflation remains the challenge of the government… Read more

India embarks on Universal Health Coverage during 12th Plan

India is embarking on an ambitious target of achieving Universal Health Coverage for all during 12th Plan period. Everybody will be entitled for comprehensive health security in the country. It will be obligatory on the part of the State to provide adequate food, appropriate medical care, safe drinking water, proper sanitation, education and health-related information for good health. The State will be responsible for ensuring and guaranteeing UHC for its citizens… Read more

Govt wants single definition of infrastructure to drive growth 
The Insurance Regulatory and Development Authority (IRDA) would define the term ‘infrastructure’ with that of the Cabinet Committee on Infrastructure (CCI) and notify it soon, according to media reports.

According to the insurance regulator, the definition of infrastructure was being aligned with CCI as the government wants a single definition of infrastructure to initiate growth… Read more

Life Insurance Council tie-up with German Insurance Association

Life Insurance Council, the industry body of all life insurance companies in India today signed a Memorandum of Cooperation with German Insurance Association, (Gesamtverband der Deutschen Versicherungswirtschaft e.V.) to promote a cooperative relationship and mutual understanding between the two insurance industry bodies. This is first-ever tie-up with an international industry body of another country. This would act as a platform for exchanging information, discussing matters and activities of common interest pertaining to the Insurance industry… Read more

Tata AIG General supports Tata Medical Center

Tata AIG General insurance Co. Ltd, a pre-eminent player in the general insurance industry had the CEO, KK Mishra along with 50 other employees participate in a walkathon to support Tata Medical Center, a philanthropic initiative from the House of Tata, to promote Prevention, Early Diagnosis, Treatment, Rehabilitation, Palliation and Research for cancer patients. The 10 km Walkathon witnessed several corporates running for the cause of cancer on Gandhi Jayanti… Read more

Learning

Mediclaim + critical illness: Both are essential

Considering the increase in pollution, heavy use of pesticides in food items and high levels of stress in our daily lives, it is quite likely for a person to contract some disease or the other. At the same time, medical treatment has become very expensive. Therefore, insurance against medical problems is a MUST.

Medical insurance can broadly be divided into two broad categories: Mediclaim Policy and Critical Illness Cover. It is not that you have to choose either a mediclaim policy or critical illness cover. Both are essential. Let’s understand why... Read more

Claim procedure for critical illness policy

Critical illness insurance or critical illness cover is an insurance product, where the insurer is contracted to typically make a lump sum cash payment if the policyholder is diagnosed with one of the critical illnesses listed in the insurance policy.
The below text highlights the basic documents that one needs to claim his critical illness policy… Read more

Know more about health insurance

We have many goals in our life such as starting a business, buying a house, going on world tour, etc. To achieve these goals, we work hard & save money. Besides working hard to achieve our goals, we also need to ensure that we take care of our health. It is rightly said that “Health is wealth”. With the rising healthcare costs, adequate health insurance is essential.

Imagine a situation, what would happen if you don’t have adequate health cover and unfortunately you are hospitalized or get injured in an accident. Temporary or long-term hospitalization can wipe off most of your accumulated savings. Therefore, prudent financial planning should also include adequate health insurance cover for you and your family… Read more

Myths about financial planning

In India, ‘financial planning’ is a new and emerging concept in the field of financial services. Most of us want to improve our personal finances but we feel that going to a financial planner is a waste of time. Many people also misinterpret the term ‘financial planning’. According to them, financial planning means just savings money in FDs and other financial instruments… Read more

Quote, Unquote

“I believe the U.S. system of state-based insurance regulation remains the strongest in the world—and the on-going work by regulators is improving the framework every day”

Dr. Therese M. (Terri) Vaughan, CEO, National Association of Insurance Commissioners

“It is important to ensure that the terms and conditions of all insurance products including elements such as claims philosophy align with the best interests of beneficiaries”

Ross Jones, Deputy Chairman, Australian Prudential Regulation Authority

“There is a need to pick winning products from each category and then persist with them, rather than churning out products with insignificant changes. Old wine in a new bottle does not make a good drink”

J Hari Narayan, Chairman, IRDA
 
New Launches

IndiaFirst Life launches MagicBoard

IndiaFirst Life Insurance, a joint venture between two of India's largest public sector banks -Bank of Baroda and Andhra Bank along with UK's leading risk, wealth and investment company Legal & General, launched MagicBoard–a one-of-its kind integrated portable fulfillment device for a fully compliant, truthful and efficient Customer sales and service process that has a potential to be a force multiplier in sales productivity, customer delight and cost efficiency.

MagicBoard was launched by Dr. P. Nandagopal, Managing Director & CEO, IndiaFirst Life Insurance at Mumbai… Read more