Top Stories
IRDA asks insurers to re-examine distribution model: Reports
The Insurance Regulatory and Development Authority (IRDA) has asked insurers to re-examine their product distribution model. While inaugurating two-day ‘Global Insurance Summit: Finding the god particle in the insurance industry’ organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM), J Hari Narayan said, insurance companies need to enhance their technology the way their banking counterparts have done.
The IRDA chief also pulled the insurers who have been lacking on the customer satisfaction front. Mr Narayan said that many insurers are working in more than one sector and questioned on their intention of making quick money. According to the regulator, none of the projections by these insurers were correct and they were seen surviving largely on surrender profits… Read more
IRDA, FM held meeting to discuss issues in insurance sector
Finance Minister P Chidambaram on Wednesday held a meeting with Insurance Regulatory and Development Authority (IRDA) chairman J Hari Narayan to discuss issues in the insurance sector and attract retail participation, according to media reports.
Financial services secretary DK Mittal said, the focus of the meeting was how to increase insurance penetration, how insurers can do more business, how better products can be launched at lower premium, and how more investment can flow to infrastructure sector, the reports added.
According to Mr Mittal, there will be one more meeting to discuss investment and tax issues. The government is aiming to create awareness about insurance and mutual funds and raise long-term funds for investors. The insurance regulator is also looking at how to make the process of product approval faster. It is also working on ways to relax investment norms to attract more funds into the infrastructure sector, bancassurance and process of approval for opening offices in semi-urban and rural areas.
Cabinet to discuss proposal of increasing FDI limit: Reports
The Cabinet is likely to discuss the proposal of increasing foreign direct investment (FDI) limit in the insurance sector from 26% to 49%, according to media reports.
At present, FDI in the insurance sector is limited to 26%. With the government taking policy reform initiatives earlier this month, especially allowing FDI in multi-brand retail and aviation sectors, there are expectation that the limit in the insurance sector may also be raised, the reports added.
IRDA (Insurance Regulatory and Development Authority) chairman J Harinarayan on Monday said that FDI in insurance would enable the companies to grow and infuse more capital in the business as most of the insurance companies are going through capital crunch, he was addressing an ASSOCHAM event in Mumbai… Read more
Learning
Importance of life insurance for NRIs
Indians have spread to virtually every corner of the globe and have made their mark in the chosen line of business or profession. As an Indian living abroad, it definitely makes good financial sense to connect with the roots of your lineage and make wise investments back at home, especially when the country is in a developing phase… Read more
MWP Act: Make sure your dependents get insurance policy proceeds
We know that life insurance cover is essential to protect ourselves and our family members in case of an unfortunate event. We are even aware that an individual needs to buy adequate term plan if his family members are dependent on him. We also know that we need medical insurance as it protects us and our family financially in the event of an unexpected serious illness or injury that could be very expensive… Read more
ICICIdirect Centre for Financial Learning launches StockMind
ICICIdirect Centre for Financial Learning (ICFL) has launched StockMIND on 14th September, a nation-wide contest aimed at college students enabling them to showcase their stock investment skills. ICFL aims at educating the youth on investing in the stock market through this unique and interesting initiative.
"One of the objectives of ICFL is to demystify the equity markets. While we are conducting number of programmes which include classroom and online training for various age groups of Indians, we felt that a programme aimed at the today’s younger generation should be fun and fast-paced. StockMind aims at being a healthy competition and will also provide the participants with investments knowledge," said Vineet Arora, EVP and Head of Product & Distribution… Read more
Call for papers on financial law & policy: NIPFP
The National Institute of Public Finance and Policy (NIPFP) has invited papers for a national-level seminar titled “Financial Law & Policy: An Inter-disciplinary Approach” to be held at the National Law University, Delhi (NLU Delhi) on December 1, 2012.
The financial sector in India is currently governed by more than 60 legislations with a plethora of regulations. This has led to a lot of ambiguity in the legal framework applicable for doing business in the country. The problem gets compounded by the fact that many of these legislations were enacted more than 60 years ago, with objectives that are largely not in sync with the realities of the present day globalised competitive world… Read more
What you should know before you sign on for a health insurance policy
In today’s fast paced life where all of us are trying hard to achieve targets or meet deadlines, we often tend to overlook nature’s precious gift to us—our health. Changing lifestyles and erratic work hours have given rise to many health issues and make us vulnerable to many ailments and lifestyle diseases.
With an increase in the number of ailments, the cost of medical treatment and advancement in medical technology is also increasing. Health insurance plays a pivotal role in combating the battle of finances, in case of unforeseen events… Read more
Are you ‘minding’ your ‘gap’?
The phrase ‘Mind the Gap’ was first introduced in late sixties on London Underground to warn train passengers to exercise caution while crossing the gap between the train door and the station platform. Having originated as a utilitarian safety warning, over the years ‘Mind the Gap’ has turned into a stock phrase and today used in many other contexts having nothing to do with transport safety. Here, we are discussing it in the context of one’s family’s financial protection against the ‘IF’s’ of life… Read more
Common health insurance mistakes
Health insurance protects you and your loved ones from suffering any financial disasters caused by high medical expenses. Paying your hard earned money for either short or an extended hospital stay may be very expensive. Typically health insurance allows you to receive the necessary health care if you or your loved ones fall ill or are injured. Health insurance eliminates the financial risk of making large payments to health care providers for injury or illness… Read more
Domestic News
IRDA releases draft on standard product for rural & social
An exposure draft on a standard product for rural and social sector is released by Insurance Regulatory and Development Authority (IRDA) for comments of the public and all the stakeholders. The views, if any, may be sent to in within 30 days from the date of this notification released on 21st September.
To expand the reach of insurance cover to below poverty line (BPL) families in the next five years, the draft proposal said, "Each insurer shall prescribe the target in proportion to their market share. IRDA shall prescribe annual target so as to cover entire BPL population in the next five years.”… Read more
Mahindra announces strategic partnership with LeapFrog
Mahindra Insurance Brokers Ltd (MIBL), a leading insurance broker primarily servicing rural and semi-urban India, announced a strategic partnership with LeapFrog Investments, the world’s largest investor in insurance to under-served consumers.
MIBL, which is a wholly-owned subsidiary of Mahindra & Mahindra Financial Services Ltd. (Mahindra Finance) and a licensed Composite Broker, has achieved extraordinary growth and profitability over the past eight years. It is currently valued at Rs. 520 crores (approx. US$ 96m)… Read more
FDI in insurance to help sector grow: IRDA
Advocating the need to hike foreign direct investment (FDI) cap in the insurance sector, chairman of the Insurance Regulatory Development Authority (IRDA) today said that FDI in insurance would enable the companies to grow and infuse more capital in the business as most of the insurance companies are going through capital crunch, he was addressing an ASSOCHAM event in Mumbai.
While inaugurating two-day ‘Global Insurance Summit: Finding the god particle in the insurance industry’ organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM), J Hari Narayan said, “Insurance, like many other sectors in India requires greater levels of investments and in that regard we would welcome steps to increase FDI in the insurance industry.”… Read more
Pension plans which end in annuity will be approved: IRDA
On the issue of faster approval of products, Insurance Regulatory and Development Authority (IRDA) said, “What matters is the quality of products that have been cleared and not the speed.” The IRDA said most pension products filed do not comply with regulations as the features read more like mutual funds, which have a shorter time horizon.
While inaugurating two-day ‘Global Insurance Summit: Finding the god particle in the insurance industry’ organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM), IRDA chairman J Hari Narayan said, “Only the proper pension products which end into an annuity and if there is a withdrawal in between during the tenure of the product, a certain proportion can be commuted in cash, but the balance will again have to be rendered in an annuity.”… Read more
HMT to pay Rs. 33.8 mn damages to LIC: Reports
A New Delhi court has asked HMT Ltd to pay around Rs. 33.8 million damages to LIC (Life Insurance Corporation of India) for not vacating its rented premises, according to media reports.
The court upheld an estate officer’s order to HMT Ltd to vacate LIC’s office at Jeevan Tara building in Parliament Street, New Delhi as its lease agreement was not extended and also to pay Rs. 33.8 million, the media reports added… Read more
IRDA to meet finance ministry to discuss tax relief measures
The Insurance Regulatory and Development Authority (IRDA) will meet the finance ministry on Wednesday to discuss tax relief measures for the life insurance sector. The IRDA officials would meet finance minister P Chidambaram to consider their suggestions which will support the industry, according to media reports.
The IRDA has forwarded the industry’s views on the current tax structure for insurers and policyholders after detailed discussion with the insurers. IRDA has also given its views on tax and investment norms in insurance sector ahead of their meeting with the FinMin on Wednesday. IRDA chairman J Hari Narayan, “Certain tax measures will be beneficiary and will encourage the growth of insurance industry.”… Read more
Reliance Life to recruit 40,000 advisors in 6 months
Reliance Life Insurance Company (RLIC), part of Reliance Capital Limited, today announced that the company has hired over 10,000 insurance advisors in the current financial year.
The company plans to recruit another 40,000 insurance agents in the next six months to strengthen its existing advisor base in the country. Malay Ghosh, President and Executive Director, Reliance Life Insurance, said, "We have added close to 10,000 insurance advisors in the past few months and are targeting to recruit 40,000 more by the end of the current financial year to increase our reach. This will strengthen our distribution network and help in new customer acquisition," said Mr. Ghosh… Read more
Consumer forum penalises Reliance General
The New Delhi District Consumer Disputes Redressal Forum has ordered Reliance General Insurance Co Ltd to pay Rs. 4.11 lakh to a policy holder Anil Kumar Gupta for refusing him the cashless hospitalisation facility and then avoiding to reimburse his expenses on treatment, according to media reports.
Mr Gupta had bought a cashless mediclaim policy for June 16, 2009 to June 15, 2010 from Reliance General Insurance agent. He was admitted to Escorts Heart Institute on October 10, 2009 for chest pains. As he had the cashless mediclaim policy, Mr Gupta contacted the insurance company’s agent for approval of the cashless facility… Read more
FM to introduce measures to revamp insurance sector
The government is planning to introduce a few measures targeted at restructuring the insurance industry and is leaning hard on regulator IRDA to ease rules that it believes are hampering the growth of the industry.
According to IRDA (Insurance Regulatory and Development Authority) chairman J Hari Narayan, FDI in insurance would enable the companies to grow and infuse more capital in the business as most of the insurance companies are going through capital crunch. Mr Narayan was addressing an ASSOCHAM event in Mumbai.
The coming weeks may witness relaxation in investment norms for insurers, changes in tax and investment norms in the sector, banks buying a stake in insurance industry and enhancing the pool of insurance agents to reduce the high levels of agent attrition… Read more
ICICI Pru MF, My Financial Advisors presents FPL
ICICI Prudential Mutual Fund has taken a new initiative to extend financial literacy to the school level through the innovative and educating Financial Premier League (FPL). Launched under the company’s “Tarakki Ahead Investor education and Financial Literacy initiative”, FPL is a fusion of cricket and personal finance and is aimed at educating school children on the benefits of financial concepts and familiarizing them students with terms such as investments, savings, insurance, mutual funds, etc… Read more
Quote, Unquote
“The global insurance marketplace in which we operate demands an insurance supervisor with the ability to cooperate quickly and effectively for the benefit of consumers”
Peter Braumüller, chairman-executive committee, IAIS, in The Asian Banker
“Only the proper pension products which end into an annuity and if there is a withdrawal in between during the tenure of the product, a certain proportion can be commuted in cash, but the balance will again have to be rendered in an annuity. So the products of that nature will certainly be cleared but the products which are only called pensions without any pension element in it will not be approved”
J Hari Narayan, Chairman, IRDA, speaking at an ASSOCHAM event in Mumbai
“Our main worry is misselling of insurance products. We want these products to be more secure for investors”
J Hari Narayan, Chairman, IRDA, in The Economic Times
“Each year about 7 lakh agents pass out from institutes. However, more than 7 lakh agents drop out every year. So, the problem here is not generation, but attrition”
J Hari Narayan, Chairman, IRDA, speaking at an ASSOCHAM event in Mumbai
“Several players in the industry have worked in more than one regime. My question to then is, though they follow all the stringent minimum guarantee and other stringent rules of insurance in other nations, why is it that they act surprised while doing business in India? Is it that they are here to make a quick buck?”
J Hari Narayan, Chairman, IRDA, speaking at an ASSOCHAM event in Mumbai
“Products are not a brand of biscuits”
J Hari Narayan, Chairman, IRDA, speaking at an ASSOCHAM event in Mumbai
New Launches
Edelweiss Tokio Life launches ULIPs
In line with its commitment to provide customers with products that cater to their needs, Edelweiss Tokio Life Insurance Company Limited, the latest new age life insurance company has introduced Edelweiss Tokio Life- Wealth Accumulation (Privilege) a unit linked insurance plan that offers to maximize your investment with low charges & Edelweiss Tokio Life-Wealth Enhancement Ace, a unit linked plan that aims to maximize returns along with sufficient life cover… Read more
International News
Aviva to sell 58.4% Sri Lanka venture stake
Aviva plc announces that it has agreed to sell its controlling 58.44% interest in Aviva NDB Holdings Lanka (Private) Limited (Aviva NDB) to American International Assurance Company, Limited, a subsidiary of AIA Group Limited, for a consideration of £31 million payable in cash.
Aviva NDB is a joint venture between Aviva Asia Holdings Private Limited and Sri Lanka’s leading financial group NDB Bank (NDB)… Read more
Scale of longevity risk is too vast for insurers: Swiss Re
A liquid capital market in longevity risk can ensure long-term funding of people's longer lives, says Swiss Re's newest publication, A mature market: Building a capital market for longevity risk. The report addresses many of the questions posed by investors, regulators and pension funds about whether a longevity capital market is viable and how such a market might work.
Life expectancy is increasing globally. As people live longer, ensuring that they can retire with sufficient financial security to enjoy the years to come is one of the biggest challenges facing society today. Reinsurers and insurers are playing a lead role for both pension funds and individuals in helping them to shoulder the risk through products such as longevity insurance—sometimes referred to as a longevity swap – and annuities… Read more