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Insurance Newsletter - December 03 to December 07, 2012

India Infoline News Service | Mumbai |

The Insurance Regulatory and Development Authority (IRDA) on Tuesday said that life insurance companies are not permitted to participate in repo transactions.

Top Stories 

6 life insurers report net profit of Rs. 39.52bn in FY12

A major portion of the profits earned by life insurers has been due to lapsed policies—that were terminated early. This also indicates low level of awareness about the importance of insurance among policyholders.

According to a recent report by Goldman Sachs on the life insurance industry in India, the top six life insurers reported a net profit of Rs. 39.52 billion for the financial year ended March 2012. Of this around 39% that is Rs. 15.53 billion was due to lapsed profits… Read more

Life insurers not allowed to participate in repo transactions: IRDA

The Insurance Regulatory and Development Authority (IRDA) on Tuesday said that life insurance companies are not permitted to participate in repo transactions.

The regulator has allowed insurers to undertake reverse repo transactions in corporate debt securities. In case of life insurance companies, the exposure to reverse repo (lending) transactions in government securities and corporate debt securities at any point of time shall not exceed 10% of all funds taken together, IRDA said in a circular… Read more

2.57 trillion complaints registered against 23 insurers in 2011-12

According to the data provided by Minister of State for Finance Namo Narain Meena in the Lok Sabha, a total of 2,57,313 complaints were against the 23 insurers in 2011-12 of which 2,56,196 were attended to.

The data indicated that around 50,807 complaints were reported against Reliance Life in 2011-12. There were 2,936 complaints related to death claims against Bajaz Allianz and Tata AIA (395)… Read more

New Launches

Royal Sundaram launches WAP site for mobile customers

Royal Sundaram Alliance Insurance Company, a joint venture between Sundaram Finance and Royal & Sun Alliance Insurance plc, UK, launched mobile website, m.royalsundaram.in. Royal Sundaram is one of the first companies in insurance industry in India to offer a mobile site that supports renewal of motor, health, personal accident, home and commercial vehicle policies… Read more

HDFC Life launches New Immediate Annuity Plan

HDFC Life has launch of ‘HDFC Life New Immediate Annuity Plan’, a traditional annuity product with a wide range of annuity options that will ensure a regular income stream post retirement.

Sanjay Tripathy, Executive Vice President and Head, Marketing, Product and Direct Channel, HDFC Life said, “In India, there has been a paradigm shift in retirement trends and the increase in life expectancy.  Individuals opt for retirement as early as at 40-45 years and go on to live beyond 80-85 years. This emerging trend is expected to boost the Annuity market substantially in the next few years… Read more

HDFC Life brings back pension plans

HDFC Life has launched two pension plans. HDFC Life Pension Super Plus is a regular premium unit linked plan whereas HDFC Life Single Premium Pension Super is a single premium unit linked plan.

Amitabh Chaudhry, MD & CEO, HDFC Life said, “HDFC Life Single Premium Pension Super and HDFC Life Pension Super Plus are designed to build a sizeable corpus for post retirement income and offer assured vesting value with minimum guarantee benefits… Read more

Health insurance awaits recognition from senior citizens

Bajaj Allianz General Insurance offers an exclusive health insurance plan for senior citizens called Silver Health. This plan caters exclusively to elderly in the age group of 46 years to 70 years and offers cashless benefit or reimbursement for hospitalization expenses due to illness or accident… Read more

New Appointments

Martin Gruenberg designated as chairman of FDIC

Martin Gruenberg and Thomas Hoenig were officially designated on 30th November as the Chairman and Vice Chairman of the FDIC (Federal Deposit Insurance Corporation).

On November 15, 2012, the Senate confirmed both for their respective positions. President Obama recently signed the orders making the confirmations official. Both were confirmed by the Senate for six-year terms as Members of the FDIC Board of Directors on March 29, 2012… Read more

ACE Insurance appoints Edward Kopp, Jr as COO in Korea

ACE Insurance (Korea), part of the ACE Group of insurance and reinsurance companies, has appointed Edward J. Kopp, Jr as the deputy country president & chief operating officer. Mr. Kopp will report to Rob Wilkinson, Country President for ACE Insurance in Korea… Read more

Aviva Life Insurance appoints Amit Malik as director-HR

Aviva Life Insurance has appointed Amit Malik as director–human resources. Based out of Aviva Headquarters in Gurgaon, Mr. Malik is part of the India management committee and will be responsible for the development and implementation of strategies, policies and practices that will reflect Aviva India’s HR objectives… Read more

Dr Sandeep Sharma joins Assist America as sales director-India

Assist America Medical Emergency Services (India) Pvt. Ltd, a licensed provider of Assist America Services in India, is has appointed Dr. Sandeep R. Sharma as sales director--India, from 3rd December 3rd… Read more

Leader Speak

There is slower product clearance by the regulator: HDFC Life

“HDFC Life has done better than many other insurance companies showing the strongest growth trajectory. Our WRP (Individual business) has shown a growth of 10% for the H1FY13,” Vibha Padalkar, executive director and chief financial officer, HDFC Life, says… Read more

Domestic News

PFRDA to offer more freedom to fund managers: Reports

The PFRDA (Pension Fund Regulatory and Development Authority) is planning to provide pension fund managers (PFMs) some freedom in valuing their portfolios to help them show better returns, according to media reports.

The move is aimed at adding more subscribers to join the National Pension System (NPS), which has failed to attract substantial interest from the unorganised sector that includes workers, vegetable vendors, hawkers, domestic helpers, etc, the reports added… Read more

AHF demand insurance cover for HIV/AIDS patients

Health activists from AIDS Healthcare Foundation (AHF) on Friday appealed to Union Health Minister Ghulam Nabi Azad to provide health of insurance for people suffering with HIV/AIDS.

Formal letters of request sent to Union Health Minister on postcards from more than 25,000 people including those living with HIV/AIDS in India. The group organised display of postcards -- from Jantar Mantar to Barakhamba Road -- which read, “Kindly provide health insurance to people living with HIV/AIDS and save lives”… Read more

Foreign bank threatens to close New India Assurance account

Minister of State for Finance Namo Narain Meena said a foreign bank had threatened to close down the account of New India Assurance Ltd if it did not stop providing insurance cover to ships ferrying oil from Iran.

However, the threat was not executed by the foreign bank, Mr Meena said in a written reply in the Rajya Sabha… Read more

There will be a tendency to drop out of RSBY: WHO study

The Rashtriya Swasthya Bima Yojana (RSBY), a health insurance scheme for the poor, can become a major failure if insurance companies continue to throw a spanner, according to a WHO-supported study.

“Since its launch in 2008, RSBY has covered nearly 33 million Below Poverty Line (BPL) families and provided succour to 4.2 million patients who needed hospitalisation,” says the study, conducted in Patan district, Gujarat by Bengaluru-based Institute of Public Health.

However, the main objective of RSBY, which is to protect the poor from hospitalisation expenses, is only being partially met, said Dr N Devadasan, principal investigator of the study. “It is unacceptable that even after four years of the scheme, more than 50% of enrolled patients had to incur out of pocket (OOP) expenditure at the time of admission.”… Read more

Special Stories

Raise personal income tax exemption to Rs. 3 lakh: Assocham

Raise personal income tax exemption limit to Rs. 3 lakh, reduce service tax  and excise tax to 8% from 12% and increase deduction of interest on housing loan to Rs. 5 lakh to revive consumer demand and boost investment, ASSOCHAM said in its pre-Budget recommendations to the government. The effective rate of corporate tax should also be brought down to 25% from 32.45% at present.

“The base exemption limit of resident individual below the age of 60 years should be increased to Rs 3 lakh, to incentivize people to come into the tax net , ensure higher collection from greater compliance and encourage consumption and savings,” reveals the ASSOCHAM  pre-Budget memorandum for 2013-14… Read more
Do investors make rational investment & portfolio decisions?

Retail equity investors in India systematically lose out to other categories of players because they sell the winning stocks too quickly and hold on to the losing stocks too long, according to a study by Indian School of Business (ISB).

Individual investors are more behaviorally biased than the other categories of investors. As a result, they systematically lose to the other categories of investors. Further, the losses they experience are economically large, the study pointed out… Read more

EPFO launches e-Passbook service

Around 50 million provident fund subscribers can check their account statements online as EPFO (Employees Provident Fund Organisation) on Friday launched its e-Passbook service. 

The new concept called EPF Account Passbook allows active members to download their e-passbook multiple times in a month. The PF department no longer provides hard copy of the annual PF statement. The EPF members can access e-passbook on the EPFO website after getting themselves registered on the site. The registered EPF members can obtain the e-passbook after entering establishment code, PF number and member name as mentioned in the PF slip… Read more 


Micro insurance: Securing the future of low income group

Micro insurance is a kind of a financial service package for poor people that covers their risks by paying a small amount of premium on regular basis… Read more

Insurance Awards

ICICI Lombard wins Asia Insurance Technology Award for best mobile application

ICICI Lombard General Insurance Company Ltd, the country’s largest private sector general insurance company, has been awarded the prestigious Asia Insurance Technology Award for the "Best Mobile Application" in the non-life insurance sector… Read more

International News

FDIC-insured institutions earned $37.6 bn in third quarter of 2012

Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) reported aggregate net income of $37.6 billion in the third quarter of 2012, a $2.3 billion (6.6 percent) improvement from the $35.2 billion in profits the industry reported in the third quarter of 2011.

This is the 13th consecutive quarter that earnings have registered a year-over-year increase. Increased noninterest income and lower provisions for loan losses accounted for most of the year-over-year improvement in earnings… Read more

Sovereign default & expropriation risks worry investors: MIGA

Foreign investors, attracted by stronger economic growth in developing countries while mindful of risks, remain relatively optimistic about these destinations in the short term according to the results of a survey released in a report by the World Bank’s Multilateral Investment Guarantee Agency (MIGA).

World Investment and Political Risk noted that half of the survey’s respondents plan to increase investment in developing countries in the next 12 months. This sentiment dovetails with foreign direct investment (FDI) trends that show developing-country flows continue to account for a substantial share of global FDI: in 2012 they are estimated to be 36 percent of inflows and 14 percent of outflows. FDI to developing countries is expected to rebound in 2013 to exceed pre-2008 highs… Read more  

China’s Life Insurance faces new risks from liberalisation: Fitch

Fitch Ratings says in a new report that Chinese life insurers may be exposed to risks from new investments as a result of the recent liberalisation by the China Insurance Regulatory Commission (CIRC).

Under the CIRC's new initiative, Chinese insurers have more flexibility in diversifying their investments to include credit-related financial products (such as banks' wealth management products and asset-backed securities, which they are allowed to hold up to 30% of their assets. In addition, insurers can invest up to 20% of total assets in infrastructure debts and property-related assets, up from 10%... Read more



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