Insurance Newsletter - October 28 to November 01, 2013

India Infoline News Service | Mumbai |

According to IRDA, general insurers are outsourcing a lot of their work relating to the motor insurance services from auto dealers, the report added.

Top Stories

Investment limit of insurers hiked to 20% IT, pharma sector: IRDA

The IRDA (Insurance Regulatory and Development Authority) on Wednesday increased the investment limit of insurers from 15 per cent to 20 per cent in sectors such as IT and pharma.

Presently, insurers are permitted to take exposure in a specific industry up to 15% of the Investment Assets (25% in case of BFSI sector and no exposure limit for Infrastructure sector), the IRDA said in a circular.

According to IRDA, industrial weightage on the benchmark indices is dynamic and presently IT industry contributes more than 15% on the benchmark indices. As the weightage keeps on changing from time to time, it is decided to give general permission to have exposure of further 5% in one industrial sector (not applicable to BFSI), IRDA added... Read more

Insurers to stop giving high incentives to auto dealers: IRDA
The Insurance Regulatory and Development Authority (Irda) on Monday has asked general insurance companies to cut the excess incentives which they are paying to motor dealers and to pass on the benefits to customers in the form of low premium on policies, according to a media report.

According to IRDA, general insurers are outsourcing a lot of their work relating to the motor insurance services from auto dealers, the report added.

In order to push sales of motor insurance policies, insurers pay huge incentives to the auto dealers. As a result, these policies become excessive and the end-consumer has to bear the cost.

The regulator recently met the chiefs of general insurance companies to discuss this issue.

IRDA eases norms for investments in FDs
The IRDA (Insurance Regulatory and Development Authority) on Wednesday relaxed norms for fixed deposit investments in the promoter group of insurance companies.

“Considering the representations from the industry and the Life Insurance Council, we have decided to permit fixed deposits, as stated in the regulations, in promoter group scheduled banks within the 5 per cent limit prescribed for Promoter Group subject to the overall limits,” said the regulator.

Domestic News

IRDA extends deadline for phasing out old plans till Dec 31
The Insurance Regulatory and Development Authority (IRDA) has extended the deadline for phasing out the old products in traditional segment till December 31, according to a media report.

The earlier deadline was October 1. Also, the sale of highest net asset value (NAV) products in the unit-linked product segment has been banned from October 1 onwards.

The insurance regulator had brought out a new set of guidelines for life insurance products in February. While the minimum death benefit and surrender value was altered for traditional product customers who stay invested in a policy for a longer period, in the case of unit-linked products (Ulips) insurers had to intimate customers about changes in the yield of the Ulip every month.

The rules had also banned the sale of highest NAV products, since they were not in customer interest.

IRDA notifies SLAs to submit compliance by Mar 2014
The IRDA (Insurance Regulatory and Development Authority) has advised to all corporate SLA (surveyors and loss assessors) to submit compliance by 12 March 2014.

There shall be at least two directors/partners in the company /firm at any point of ti me who are members of the institute and are licensed to act as surveyor and loss assessor, IRDA said in a circular.

Licensed surveyors who are working as employees of the company/ firm shall undertake survey jobs only of that company/firm with whom he/she is employed with. The employee shall undertake survey jobs only in those department and level of membership allotted to him/her under his/her individual license... Read more

IRDA to use more technology for assessment of crop loss
The Insurance Regulatory and Development Authority (IRDA) said that is planning to use more technology for assessment of agricultural crop loss, according to a media report.

M Ramaprasad, Member (Non Life, IRDA said that the regulator is planning to rely more on technology in the assessment of crop loss for which it will take help from the India Meteorological Department (IMD), the report added... Read more

Max Life Insurance H1 PBT at Rs2.48bn
Max Life Insurance, India's leading life insurance company, continued its profitable growth journey during the first half of the Financial Year 2013-14. The Company has outperformed the industry to record New Business Premium of Rs. 904 crore,  growth of 11% over the corresponding period last year.
The Gross Written Premium of the Company grew 4% to Rs. 3,005 crore. During the period the Pre Tax Shareholder Profit grew 2% to Rs. 248 crore. In view of a strong all round performance during H1 FY 2013-14, the Company declared a net interim Shareholder Dividend of Rs. 128 crore, a 29% upward revision from interim dividend announced in the previous year... Read more

Chola MS General launches ‘Chola Swasth Parivar’ policy
Cholamandalam MS General Insurance, a joint venture between the Murugappa Group and Mitsui Sumitomo Insurance Group Japan, has launched Chola Swasth Parivar Health Insurance Policy.

The family floater policy offers a combination of Health and Personal Accident covers at an affordable premium. The premium for a family of 4(2 Adults +2 Children) works out to Rs. 5005 for a sum insured of Rs. 3 lacs. The premium does not increase with age (up to 70 years) making it the only policy in the market to offer such a benefit... Read more

Birla Sun Life launches Vision LifeSecure Plan
Birla Sun Life Insurance, the life insurance arm of the Aditya Birla Financial Services Group, has launched traditional participating whole life insurance plan, BSLI Vision LifeSecure Plan. This traditional plan offers an ideal combination of regular bonuses throughout the policy term and life insurance benefit till the age of 100. Birla Sun Life Insurance’s Vision LifeSecure Plan offers maturity and death benefit including regular accrued bonuses and terminal bonus, if any... Read more

LIC tops as India’s most attractive BFSI brand
Of the 29 BFSI brands that feature among India’s 1000 Most Attractive brands, LIC (All-India rank 59th) tops this category, the only PSU insurer in the list. It is closely followed by ICICI ranked second in the category. SBI is third among all BFSI brands featured and is also India’s Most Attractive brand. The list includes 6 insurance companies and 19 banks of which 10 are PSU banks. These results are based on a primary survey conducted across 16 cities by TRA (Trust Research Advisory) published in a report titled India's Most Attractive Brands... Read more

Special Stories

Installment under reverse mortgage would be tax exempt: NHB
In order to make the reverse mortgage scheme more attractive for senior citizens, the government has decided to give tax break on installment earned by pledging their residential property.

The reverse mortgage scheme is operated by National Housing Board and housing finance companies, banks and insurance companies.

It has been decided that installment under the reverse mortgage scheme would be tax exempt, NHB said.

Besides income tax benefit, the installment income or annuity is expected to increase at least three times to the benefit of retired person, NHB added.


Learning

The significance of Muhurat trading during Diwali
Muhurat trading also called Mahurat trading is the stock market trading activity which happens for about an hour on the Diwali day. Usually, this trading session is held in the evening and most traders buy on this day. It is a symbolic ritual which has been performed for years and investors make some token purchases on this day... Read more

 

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