Insurance Newsletter – January 13 to 17, 2014

Equity ETFs should not be holding more than 15% of Fund in a single company and total exposure to a particular sector should not exceed 30% of the fund.

January 18, 2014 12:18 IST | India Infoline News Service
Top Stories

IRDA may allow insurers to invest in equity ETFs

The Insurance Regulatory and Development Authority (IRDA) on Wednesday released a draft on allowing insurers to invest in Equity Exchange Traded Fund (ETF). The regulator has proposed that Equity ETFs would be restricted to schemes of Mutual Funds.

The IRDA will allow insurance companies to invest in equity ETFs.

The equity ETFs would be restricted to registered schemes of Mutual Funds (MFs) and over all expense ratio should be below 0.4% of daily net assets, RK Nair, Member (Investment), IRDA said in circular issued on Thursday.

Equity ETFs should not be holding more than 15% of Fund in a single company and total exposure to a particular sector should not exceed 30% of the fund. No investments in the overseas equity ETFs... Read more

IRDA panel to study FDI in insurance intermediaries & TPA

The Insurance Regulatory and Development Authority (IRDA) has created a committee to study 100% Foreign Direct Investment (FDI) in insurance intermediaries and Third Party Administrators (TPAs).

IRDA said that it had received references from various stakeholders requesting them to consider the foreign holding in insurance brokers from existing 26% to 100%.
The 10-member committee has representatives from life and non-life insurance companies, broking firms, IRDA officials and industry bodies.

Headed by Suresh Mathur, senior joint director, IRDA, the committee will submit its report in three months.

IRDA may direct all banks to become insurance brokers

The Insurance Regulatory and Development Authority (IRDA) has supported the finance ministry's decision to allow banks to sell products of multiple insurers. At a meeting in Hyderabad on Thursday, the IRDA said that it is in favour of banks selling products of multiple insurance companies. At present, banks are allowed to sell products of one life, one non-life and one-health insurance company. The finance ministry had asked all public sector banks to start broking - selling products of multiple insurance companies - from January 15. The insurance regulator said private banks should also start doing so. Out of more than 1 lakh bank branches, only 20,000 are estimated to be selling insurance products of any kind.

Leader Speak

We hope to record revenue of over Rs. 75 cr in FY14: PolicyBazaar.com

“We really look forward to the day when all customers realize the value which aggregation and comparison bring into the purchase decision,” Yashish Dahiya, CEO & Co-Founder, PolicyBazaar.com, says... Read more

Special Stories

Govt to strengthen capabilities of FSDC: FM

Finance Minister P. Chidambaram said that the government is working to strengthen data bases and technical capabilities of FSDC (Financial Stability and Development Council).

The FSDC was set up in 2010 to strengthen and institutionalise the mechanism of financial stability and development.

FSDC has already improved communication between all regulators and is expected to increasingly play this coordination role, the finance minister said.

EPFO to provide 8.75% interest on PF deposits for FY14

In mid-January, retirement fund body EPFO (Employees' Provident Fund Organisation) said that it has decided to increase the rate of interest on provident fund deposits to 8.75% for 2013-14.

The decision is expected to benefit 50 million subscribers. According to Union surface transport and labour minister Oscar Fernandes, EPFO has decided to recommend to the government 8.75% rate of interest for 2013-14 to its subscribers.

The Central Board of Trustees, which is the apex decision-making body of the EPFO, has approved the 8.75% interest rate. The EPFO's recommendation will be vetted by the finance ministry. Once the ministry approves the decision, the interest would be credited to the accounts of subscribers.

Domestic News
Issue relating to show-cause notice against LIC resolved

The issue involving a show-cause notice being sent to Life Insurance Corporation (LIC) of India by Insurance Regulatory and Development Authority (IRDA) had already been resolved, according to a media report.

In November 2013, the insurance regulator had issued a show-cause notice to LIC for allegedly misleading the public through advertisement. The IRDA had sought a clarification from LIC for putting up advertisements asking customers to buy products before December 31, 2013, the report added.
The IRDA had questioned the relevance of certain LIC advertisements that had the catch line -- 'last time to buy your favourite product'.

HDFC Life launches Regular Income Insurance Plan

HDFC Life, India’s leading long term private life insurance solutions provider announced the launch of HDFC Life Super Income Plan, a new traditional, with profits plan under savings category. Under the new product regime, HDFC Life recently launched 11 traditional plans and 10 ULIPs. This new plan enhances the company’s robust product portfolio.

This plan gives customer flexibility to choose from 6 plan options with different term combinations. Each plan option offers a different level of guaranteed regular income defined as a percentage of “Sum Assured on Maturity”. This Sum Assured on maturity is chosen by customer at policy inception, allowing customer to define his/her own benefits... Read more

Tata AIA Life announces Mahalife Supreme

Income protection is a key requirement in today’s environment. Tata AIA Life Insurance Company Limited (Tata AIA Life) helps fulfill this critical need through Tata AIA Life Insurance MahaLife Supreme, a simple offering that provides income protection with the added advantage of guaranteed^ returns.
“Our research shows that customers have varying expectations from their insurance solution; be it investing during early years to earn returns during golden productive phase, or preparing for their retirement needs. Tata AIA Life Insurance MahaLife Supreme is a long term pay plan that opens doors to a guaranteed future, wherein initial investments fructify into a guaranteed additional income with the added benefit of maturity payment,” said Mukesh Dhawan, Deputy CEO & CDO, Tata AIA Life Insurance...
Read more

CIC cannot hold shares in insurance company: IRDA

Currently there is a trend for holding company structure for promoting insurers. It is gaining preference particularly when the promoters are in financial sector activities especially by forming Core Investment Company (CIC). 

All the investments of the financial companies are transferred to CIC which in turn is held by ultimate promoter company. Thus, CIC is generally a subsidiary company. However, CIC (being a subsidiary company of the ultimate promoter company) cannot hold shares in Insurance Company as the regulation 2(g) (i) of IRDA (Registration of Indian Insurance Companies) regulation, 2000 provides that company formed under the Companies Act, 1956 which a not subsidiary company as defined in Section 4 of the Act can be an Indian Promoter... Read more

Canara Bank may hold govt norms on insurance sale

Bangalore-based Canara Bank is said to be defy finance ministry's rule to sell products of multiple insurers, according to a media report.

The state-run bank has already circulated a note in this regard to its board of directors, the reports added.
The government had directed state-run banks to adopt the insurance broking model, which would allow them to sell products of multiple insurers in December.

Tata AIA Life offers easy to buy, easy to sell solutions

Income protection is a key requirement in today’s environment. Tata AIA Life Insurance Company Limited (Tata AIA Life) helps fulfill this critical need through Tata AIA Life Insurance Money Maxima, a simple offering that provides income protection with the flexibility to address various needs of life.

“Our research shows that customers have varying expectations from their insurance product; be it building a corpus for their retirement need, or their children’s higher education... Read more

HDFC Life reduces customer response times by 50%

HDFC Life leverages QlikView Business Discovery Platform for strategic decision making across the enterprise QlikTech, a leader in user-driven Business Intelligence (BI), announced that HDFC Life, one of India's leading private life insurance companies, is using the QlikView Business Discovery platform to successfully increase customer satisfaction – by reducing response times by 50 percent, accelerate business growth, and provide its senior management with a strategic decision making model.

Using QlikView, HDFC Life is also to draw insights from data of its customers as well as sales performance to predict for instance the next wave of customer lifecycle management and determine what their most effective customer engagement strategies are... Read more

HDFC ERGO goes viral on social media

HDFC ERGO General Insurance, India's 4th largest private sector general insurance company, recently executed an innovative multiplex campaign which was a mix of online & on-ground activation at PVR Cinemas. The campaign was focused on HDFC ERGO’s Motor Insurance policy which can be bought or renewed through the company’s mobile website anytime, anywhere.

This unique activation was executed during the opening weekend of Amir Khan Starrer blockbuster – Dhoom 3 screening at PVR Cinemas. The concept saw a person from the audience surprisingly walking into the big screen and coming back to his seat enjoying the movie with other audience... Read more

SBI General Insurance launches road safety campaign
SBI General Insurance Company Limited, a joint venture between the State Bank of India and Insurance Australia Group (IAG) has launched a national road safety campaign ‘Right to Walk’ as part of 25thNational Road Safety Week that commenced on the 11th January, 2014.

The initiative aims at bringing about a behavioral change in drivers, both two and four wheelers and sensitise them to recognize the rights of the Pedestrians who are the primary victims of Road accidents.  The campaign is targeted at young drivers – especially youth from colleges across the country to participate in a contest of making short films on Road Safety measures... Read more

New Appointments

Zurich appoints Robert Dickie as Chief Operations and Technology officer

Zurich Insurance Group (Zurich) announced that Robert Dickie (54, British citizen) has been appointed Chief Operations and Technology Officer and a member of the Group Executive Committee (GEC), effective March 2014. He will be responsible for Zurich’s shared services, IT, procurement and sourcing as well as operational transformation initiatives. Dickie joins Zurich from American International Group, Inc. (AIG) where he served as Chief Operations and Systems Officer and was a member of the global leadership team since 2008... Read more


Top up plan: Enhance your medical cover at low-cost premium

Most people on an average buy health insurance cover between Rs. 1 lakh and Rs. 3 lakh. This amount may be sufficient for minor surgery. However with rising healthcare expenses, the above sum insured may not be sufficient.

Many people are also concerned about the limited amount of sum insured—which their health insurance plans offer—since medical expenses have increased tremendously. At the same time, these expenses can neither be delayed and unavoidable... Read more

International News

Swiss Re encourages employees to reduce their personal CO2 footprint

Swiss Re extends its proprietary "COyou2 programme" for a period of seven years, providing financial support to employees around the world when they make private investments to reduce their own CO2footprint. The programme will now end in 2020, in line with the company's current climate strategy.

The "COyou2 programme" raises awareness among Swiss Re employees about the impact their everyday lives have on the environment. It supports employees with a subsidy when, for example, switching to use a bike instead of using a car, or installing energy-efficient home appliances (e.g. washing machine/ refrigerators) and home infrastructure such as insulation or heat pumps... Read more

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