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Insurance Newsletter - September 17 to September 21, 2012

India Infoline News Service | Mumbai |

General insurers planning to enter capital market to raise funds should have a 10 year experience and will have to seek prior approval from IRDA (Insurance Regulatory and Development Authority), according to IRDA draft guidelines.

Top Stories 

IRDA issues draft IPO norms for general insurers

General insurers planning to enter capital market to raise funds should have a 10 year experience and will have to seek prior approval from IRDA (Insurance Regulatory and Development Authority), according to IRDA draft guidelines.

An applicant company proposing to raise share capital through a public issue… may do so only on completion of 10 years from the date of commencement of business, said the IRDA draft norms.

“No general insurance company shall approach the SEBI (Securities and Exchange Board of India) for public issue of shares and for any subsequent issue ... without the specific previous written approval of the Authority,” IRDA said in the draft norms for initial public offering (IPO) of non-life insurers… Read more

Consumer Forum penalizes National Insurance, Oriental Insurance

The Consumer Disputes Redressal Forum, in Ernakulam, Kerala, has ordered Oriental Insurance and National Insurance to pay Rs. 1 lakh as compensation for LPG explosion at petitioners’ – S. Surendranath and J. Santhakumari - house in Aluva, the media reports said.

Petitioners had approached the Consumer Disputes Redressal Forum after the LPG connection providers and insurers refused to compensate for the accident that took place in August 2010. The complainants had filed a petition against the Indian Oil Corporation Ltd, Bindhu Gas Agency, Oriental Insurance and National Insurance, the reports added… Read more

Insurance sector to witness massive changes

The insurance sector is expected to witness massive changes after the finance ministry intervention. The sector has been characterised by diminishing sales in the past couple of years, according to media reports.

After a meeting with public and private sector life insurers, the finance ministry has formed eight committees headed by senior officials of insurers. The chief executives of these insurance companies would examine issues which have hampered the growth of the sector. The panel will study a wide range of issues from distribution to product approval, taxation to bancassurance, among others, the reports added… Read more

New Appointments

HDFC Life elevates Vibha Padalkar as ED, CFO 

HDFC Life, one of India’s leading life insurance companies, has elevated Vibha Padalkar as Executive Director & Chief Financial Officer (CFO). Vibha joined HDFC Life in 2008 as CFO and has been a part of the top management team and Executive Committee. During her tenure as CFO, Vibha spearheaded finance, internal audit, risk management, compliance, legal & secretarial and investor relations… Read more

Zurich Insurance appoints Monica Machler to its Board

Zurich Insurance Group (Zurich) announced that the Board of Directors will propose to the next Annual General Meeting on April 4, 2013, the election of Monica Machler (56, Swiss citizen) to the Board of Directors. Zurich also announced that Armin Meyer, who has served the maximum tenure of office under the Group’s internal guidelines, will not stand for re-election… Read more

Comments on RBI policy

The RBI in its Mid-quarter monetary policy review reduced the cash reserve ratio (CRR) of scheduled banks by 25 basis points from 4.75 % to 4.50 % of their net demand and time liabilities (NDTL) effective the fortnight beginning September 22, 2012. Consequently, around USD 3.1 Billion of primary liquidity will be injected into the banking system. The RBI kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8%... Read more


Financial advisors: Scripting the future of wealth creation for Indians

‘Financial advice’ is probably the most opaque financial concept today. A country like India has witnessed a lot of ‘self-help’ as far as managing finances is concerned—citizens rarely sought financial advice because they were unaware of such services or wanted to take care of their finances themselves. This has led to a situation where Indians barely understand various savings and investment vehicles other than regular debt savings… Read more

A few steps to ensure that your insurance claim is not rejected

“We were told by the insurance company that we will get X amount of money if something unfortunate happens to my relative who bought this insurance policy and paid premiums regularly. But now when we filed for the claim, the insurance company has refused to pay us…” This is a standard statement you would hear from people whose claims have been rejected by the insurance companies… Read more

Smoking and term insurance

Typically smokers pay higher life insurance premiums than non-smokers at the time of buying a term insurance. The main reason is the mortality rate of smokers is higher than for those who do not smoke. As the probability of dying from smoking-related causes is so predominant, life insurance companies charge higher rates to compensate them for the additional risk of extending a policy… Read more

Life insurance during retirement

The virtues of life insurance are quite well known and it is well established by now that an early start to life insurance, whenever needed, definitely proves cost-effective in the long run.

The need to provide for children’s education, home loans, liabilities, etc lead to high levels of insurance coverage. But, a serious thought needs to be given to the need (or otherwise) for life insurance during retirement. During the last few years, when I have counselled retired people for structuring their retirement corpus, I have observed a number of people having life insurance policies with their premium payment term extending well beyond retirement… Read more

How to decide how much health insurance you need

You may be aware that having health insurance is essential, but have you ever wondered just how much insurance would be enough for you and your family? It may have been a mind-boggling decision until now, but it no longer has to be. A few tips may help you decide just what the right health insurance amount for you is… Read more
Domestic News

Mahindra announces strategic partnership with LeapFrog

Mahindra Insurance Brokers Ltd (MIBL), a leading insurance broker primarily servicing rural and semi-urban India, has 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

United India Insurance to open 200 one-man offices in smaller cities

United India Insurance Company is planning to recruit 21,000 agents and open 200 one-man offices in semi-urban and rural cities this financial year. The non-life insurer targets a gross premium of around Rs. 102.5 billion, according to media reports… Read more

Max Life Insurance announces Claim Guarantee

Max Life Insurance, one of the leading life insurers in India, announced a breakthrough initiative in customer centricity by introducing ‘Claims Guarantee’, a unique friendly and hassle free death claims process.

Max Life Insurance commits to pay claims within 10 working days of the receipt of all the death claim documents/clarifications from the nominee, provided that there is no non disclosure/mis-statement in the proposal form and/or health declaration form by the policyholder… Read more

Unemployment insurance product to be launched soon

Private life insurer Bharti AXA General Insurance is set to launch an 'unemployment insurance’ product that will cover the risk of being laid off. The company has filed the product with IRDA (Insurance Regulatory and Development Authority) and is waiting for the regulator’s approval… Read more

MetLife to pay J&K Bank Rs. 1.9bn for buying stake in JV: reports

MetLife Inc is reportedly planning to pay Rs. 1.90bn to Jammu and Kashmir Bank for buying a part of its stake in their insurance joint venture, MetLife India Insurance Co.

This move is aimed at maintaining MetLife's 26% stake in the Indian insurance venture. Earlier, it was decided that Punjab National Bank (PNB) will acquire 30% stake in MetLife India Insurance buying shares from the joint venture partners, according to reports.

Quote, Unquote

“Insurers should look at the wording of their insurance contracts—which is normally difficult for lay people to understand. Insurers need to make contracts and communication easier for policyholders”

J Hari Narayan, Chairman, IRDA, at the 15th CII Insurance Summit in Mumbai

“How many millionaires do you know who have become wealthy by investing in savings accounts?”

Robert G Allen, Canadian-American business man

International News

Pramerica Fosun Life Insurance approved by CIRC to open business

Fosun International Limited and Prudential Financial, Inc. jointly announced that their proposed joint venture has been officially approved by the China Insurance Regulatory Commission (CIRC) to begin operations. The company, named Pramerica Fosun Life Insurance Company Limited (PFL), is a 50/50 joint venture with registered capital of RMB 500 million.

Kenny Wu, a 27-year veteran of the Chinese life insurance industry, will serve as general manager of PFL. The company is expected to begin operating in the fourth quarter of 2012… Read more

Swiss Re becomes insurance provider of Solar Impulse 

Swiss Re Corporate Solutions, the commercial insurance arm of Swiss Re Group, is joining forces with Solar Impulse, the world’s first purely solar powered airplane able to fly through the night, as its official insurance provider.

Swiss Re Corporate Solutions will now support Swiss aviation pioneers Bertrand Piccard and André Borschberg’s ambition to fly around the world powered only by solar energy by becoming the sole insurer of the revolutionary airplane… Read more

Life insurance plans should be more attractive & affordable

On 19th September, Swiss Re published the European Insurance Report 2012 highlighting potential gaps between the insurance industry's product offerings and current consumer demand. The report includes the results of a survey commissioned by Swiss Re among 15,000 consumers in 14 European countries, and comes up with the following key findings: The main reason for the insufficient market penetration of life insurance is that consumers consider it to be too expensive. The industry should look to develop products to fill the gaps taking into account the consumers' price sensitivity. The insurance industry and governments should work together and build awareness to the benefit of consumers… Read more

Insurance against hacking on your Facebook, Twitter accounts

You may soon insure your Facebook and Twitter accounts against hacking as UK-based ALLOW has launched the country’s first social media insurance.

The social media insurance cover will protect against the impact of reputational damage, account hacking and all other forms of ID theft. The cover, which has been put in place for the benefit of all of our subscribers, will pay for legal advice and expert support in the event of a claim and is included in our service at no additional cost, ALLOW said in a press release… Read more



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