Insurance Newsletter – March 03 to 07, 2014

IRDA on Monday has allowed insurance companies to invest in equity exchange traded funds (ETFs) subject to certain conditions

March 08, 2014 2:13 IST | India Infoline News Service
Top Stories

Insurers can invest in equity ETFs: IRDA
The Insurance Regulatory and Development Authority (IRDA) on Monday has allowed insurance companies to invest in equity exchange traded funds (ETFs) subject to certain conditions. The objective is to attract investments into equity market in India. Only passively managed schemes of the mutual funds, which are registered with SEBI and governed by SEBI are eligible, the IRDA said in a notification. ETF is a security that tracks an index, a commodity or a basket of assets such as an index fund, but trades like a stock on an exchange... Read more

IRDA recommends standard format for insurance policy
The Insurance Regulatory and Development Authority (IRDA) on Monday prescribed a standard format for life and non-life insurance policy to improve transparency and help people take informed decisions. As policy servicing is one of the critical components of the insurance contracts, various service forms / formats that are made available to the policyholders during the course of policy service shall have clarity in terms of the print-size and shall facilitate complete understanding in terms of the language, the IRDA said in a notification. Therefore, all the Insurers are advised to make available all the policy servicing forms also in languages recognized under the Constitution of India so as to meet the requirements of policyholders... Read more

AV Birla plans to enter health insurance: Reports
Mumbai-headquartered AV Birla group is planning to enter health insurance sector, according to a media report. The Kumarmangalam Birla led company has appointed Boston Consulting Group to find a partner to enter the sector, the report said further. The AV Birla group is expected to acquire 74% stake in the proposed venture. The group is in talks with a South African health insurance company, the report added. However, no details have been provided by AV Birla on the development.

Domestic News

Govt approves Rs. 1,000 minimum monthly pension under EPF
The Government on Friday has approved the proposal to ensure Rs. 1,000 minimum monthly pension under a scheme of EPFO (Employees’ Provident Fund Organisation), according to a media report. The Finance Ministry has already approved the proposal. Pensioners will get the benefit with effect from April 1, the report added. The move will benefit about 28 lakh pensioners. Last month, Central Board of Trustees (CBT), the apex decision making body of EPFO had met on February 5, and decided to amend the EPS-95 scheme for the purpose... Read more

FM approves 8.75% interest on PF deposit for FY14
The Finance Ministry has approved payment of 8.75 per cent rate of interest on PF (provident fund) deposits in 2013-14 for over five crore subscribers of EPFO (Employees' Provident Fund Organisation), according to a media report. In January, Central Board of Trustees (CBT), EPFO's apex decision making body, had decided to raise interest rate for the current fiscal to 8.75 per cent from 8.5 per cent paid in 2012-13. The CBT, which is headed by Ministry of Labour, sent its decision to the Finance Ministry for approval... Read more

PFRDA to make changes in NPS investment norms
The National Pension System (NPS) is all set to make changes in investment rules and fund management fees, according to a media report. The Pension Fund Regulatory and Development Authority (PFRDA) has asked private pension fund managers not to invest directly in equities but to invest in equities only through index mutual fund or exchange-traded funds, the report added. These index funds or ETFs should track either the Bombay Stock Exchange (BSE) Sensex or the National Stock Exchange (NSE) Nifty indices... Read more

LIC buys about 4.66% stake in BHEL
Life Insurance Corporation of India has bought around 4.66% stake in power equipment maker BHEL. India's largest life insurer has bought scrips worth Rs. 18.89 billion through an open market transaction. LIC has purchased 11.41 crore shares in BHEL at a price of Rs 165.55 apiece through a block deal on the BSE. Ministry of Heavy Industry and Public Enterprises, the parent ministry of BHEL, has for long opposed the proposed disinvestment in the company pointing out volatile market conditions.

LIC invests Rs. 352.93bn in equities in 9-month of FY14
Life Insurance Corporation of India has invested Rs. 322.93 billion in the stock market in the nine months of 2013-14, according to a media report. LIC had invested Rs. 332.08 billion in equity markets in the nine months of 2012-13, the report added. The life insurer will invest another Rs. 20 billion in March in order to acquire 5% stake in power equipment manufacturer BHEL, the report further said... Read more

Capital First announces Capital raising of Rs. 178 crore
Capital First announced that it is raising fresh equity capital of Rs. 178 crores on a preferential basis at Rs. 153.80/- per share subject to approval of Shareholders. The company will allot 83.6 lac shares for a consideration of Rs. 128 crores to Cloverdell Investment Ltd, an affiliate of Warburg Pincus, and 32.5 lac shares for Rs. 50 crores to HDFC Standard Life Insurance Company Limited. Post this transaction, the total Tier 1 capital of the company on a consolidated basis will increase to Rs. 1298 crores. The total capital of the company including Tier 1 and Tier 2 capital will increase to Rs. 1791 crores... Read more

LIC's Sushobhan Sarkar likely to move to IRDA as member
Life Insurance Corporation managing director Sushobhan Sarker is likely to move to the Insurance Regulatory and Development Authority as Member, Life, according to a media report. Sarker was appointed as LIC in February 2012. Sarker had joined LIC as a probationary direct recruit in 1978 and has handled portfolios relating to insurance, marketing and investment... Read more

HDFC Life launches blog to create awareness about life insurance
HDFC Life, India’s leading long term private life insurance solutions provider announced the launch of its first Corporate Blog to educate people about Life Insurance. Titled ‘All about Life’, the Blog opens up a new avenue for readers to know everything about the insurance industry, financial planning, the HDFC Life brand & much more. All that's brewing fresh in the insurance industry, expert opinions, market movements, interesting articles on planning finances better will feature in the blog. This new platform of digital communication is now open to all at http://blog.hdfclife.com... Read more

ICICI Pru Life launches Guaranteed Wealth Protector
ICICI Prudential Life Insurance announced the launch of ICICI Pru Guaranteed Wealth Protector. This unit linked plan allows customers to protect their capital on maturity and have a potential for upside through an exposure to equities. The product provides for exposure to an equity oriented fund of upto 60% for customers aged below 45 years and upto 45% for customers above this age limit, while ensuring that premiums paid are protected. Loyalty Additions of 0.25% of the average fund value are added every year after the completion of the 6th policy year. Additionally, Wealth Boosters are added after the completion of the 10th policy year... Read more


Insurance: How to make application under RTI Act
The Government has enacted the Right to Information Act, 2005. The RTI Act is meant to give to the citizens of India access to information under control of public authorities to promote transparency and accountability in these organisations... Read more

International News

US health insurance regulator Gary Cohen to resign
Gary Cohen, who leads the Affordable Care Act, would resign from his post of the director of the Center for Consumer Information and Insurance Oversight on March 31, according to a media report. Besides leading the agency, Cohen established the marketplaces, where US citizens can buy health insurance through Obamacare, including Healthcare.gov. However, no reason has been provided for Cohen's departure. He will be replaced by physician Mandy Cohen, who is currently serving in another leadership position at the CCIIO, the report said. The CCIIO is also responsible for implementing measures concerning private health insurance.

Global market for travel insurance is worth $14bn: Finaccord
According to research published by Finaccord, the global market for stand-alone travel insurance and assistance (excluding policies linked to credit cards and bank accounts) was worth around $13.8 bn in 2013, and this figure is expected to rise to $18.1 billion by 2017. However, many of the world's largest and most established travel insurance markets – including a number of European examples, plus the US – are either stalling or declining. "On the other hand, some of the best opportunities for strong and sustained growth are to be found in Latin America and the Asia-Pacific region, where consumer awareness is often low and where the competitive landscape can be fierce", comments Simon Tottman, a consultant at Finaccord... Read more

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