Health covers may cost 20 per cent more

The insurance regulator has cleared a hike in health insurance rates for policies issued by New India Assurance, the country's largest non-life insurer. The new rates are on an average 20% higher than the old ones which were in force from 2007 and will come into effect from next month. The rate hike could trigger similar revisions among other state-owned non-life insurers since New India, being the largest, sets the benchmark for rates.

TOI had reported in its January 26 edition that public sector insurers are set to revise health insurance rates by 20-25%. Announcing the imminent hike, G Srinivasan, chairman, New India Assurance, said, "Our rates have not been revised since 2007. The revision in rates will result in an average increase of around 20% but it will vary from segment to segment." For renewal policies, the new rates will take a bit longer to be applicable as the insurer would have to provide a three-month notice.

At present, for an individual aged up to 35 years in Mumbai, the cost of a Rs 5-lakh health insurance cover is Rs 5,410, which goes up to Rs 6,078 after factoring in service tax. Going by what insurers say, the cost could go up to Rs 7,300 after the hike. But this would vary according to the individual's health profile and location. Premium varies with location because of variations in cost of treatment. Insurers have been complaining that losses in health insurance have been over 120%. Besides raising rates, the state-owned non-life companies are trying to reduce losses in health insurance by floating their own third-party administrator (TPA) — a separate entity that will manage the health insurance business and network with hospitals. According to Srinivasan, the TPA was expected to be incorporates by January next year.

Announcing the results on Wednesday, Srinivasan said that the company has earned a net profit of Rs 843.66 crore — the highest in five years and up almost five times from last year's Rs 179.31 crore. The net worth of the company rose to Rs 7,737.36 crore from Rs 7,057 crore in the previous year. The company trimmed its underwriting losses to Rs 1,800 crore from Rs 2,200 crore following a reduction in claims-to-premium income ratio.

Insurance regulator IRDA probing money laundering allegations against insurers

Insurance regulator IRDA today said it is examining the allegations of money laundering levelled against LIC, Reliance Life, Tata AIA and Birla Sunlife and action will be taken against the guilty at the earliest. "The insurance companies concerned have been asked to file a report on the allegations. The matter is under examination and appropriate action will be taken at the earliest," Insurance Regulatory and Development Authority (IRDA) said in a release. In its expose earlier in the day, Cobrapost has named as many as 23 public and private sector banks and insurance companies for allegedly "running a nation-wide money laundering racket, blatantly violating laws of the land." The four insurance companies which figure in the list are alleged to have violated the 'Know Your Customer' and 'Anti Money Laundering' Guidelines. Responding to Cobrapost allegations, LIC said that it has effective system for compliance of all statutory and regulatory norms, but added that "in case of violation is noticed at any level necessary action will be taken by the Corporation". Reliance Life too denied the allegations saying that it adheres to strict internal controls, processes and best practices and is in full compliance with KYC norms and regulatory framework. It further said: "As part of its ongoing compliance efforts, Reliance Life will continue to examine any specific instances that come to light for appropriate remedial action, if any." Taking a serious note of the expose, Tata AIA said: "We have initiated an internal inquiry into this incident and will take appropriate necessary action... Lapses in judgement and deviations from the rules are dealt with strictly." No response could be obtained from Birla Sunlife.

Private life insurers join hands to fight phony investment fraud

Amid a continuing Sebi probe into a phony investment syndicate active in the national capital region, six private life insurers have joined hands to fight the menace of mis-selling of insurance products through spurious calls made by fraudulent agents. Capital markets regulator Sebi earlier this month unearthed a syndicate of fraudulent gents operating in the national capital, wherein a large number of people could have been defrauded in the name of mutual fund and insurance products purchased by their deceased family members. Sebi widened its probe after preliminary investigations, conducted with the assistance of the Economic Offences Wing of Delhi Police, indicated an organized attempt by several people to defraud the gullible investors.

As Sebi is continuing its probe, six private insurers – Reliance Life Insurance, ICICI Prudential, HDFC Life, Birla Sun Life, SBI Life and Aegon Religare - have formally filed a complaint with the Economic Offences Wing (EOW), seeking its help to act against the spurious callers, sources said. In their complaints with the EOW, the private life insurance companies have sought action against offenders who make spurious calls to customers with false promises on loans or other investment products to dupe them. Their modus operandi typically involves the customers being asked to surrender their existing insurance policies and shift to some new products for better returns. The agents, in the process, earn hefty commissions or at times dupe the investors of their entire investment values.

When contacted, Reliance Life Insurance confirmed the development and said that the insurance companies have given presentations to EOW about the modus operandi of fake callers. As per their presentations, these fraudsters are operating from make-shift call centres in the Delhi NCR. The preliminary investigations by the insurers also found that some of these persons were previously associated with insurance companies, directly or indirectly. Typically, these persons use pre-paid mobile numbers or calling cards to contact gullible investors, while some people operate as field staff to collect documents and cheques. Sensing a large-scale fraud, the insurers and their regulator IRDA have also begun sensitizing the public on the matter though emails and SMSes on a regular basis. According to Reliance Life Insurance CEO Anup Rau, there are strict compliance policy and processes to help identify and act against spurious callers trying to mislead customers.

"We have been regularly alerting our customers through SMS and emails against falling prey to any person or entity making superficial offers of high returns, loans, bonus or gains," he said. In a recent public notice, IRDA also warned customers against fake entities calling on behalf of insurers. The country's biggest insurer, state-run LIC has also warned its customers and the general public about fraudulent agents, through newspapers and other channels

BNP Paribas launches new scheme; capital protection oriented fund

BNP ParibasBSE 3.27 % Mutual Fund has launched a closed end income fund - BNP Paribas Capital Protection Oriented Fund - Series 1 (38 months). The new fund offer is currently open for subscription and closes on April 30. The Structure The investment objective of the scheme is to seek capital protection by investing in fixed income securities maturing on or before the maturity of the scheme and seeking capital appreciation by investing in premium of exchange traded options.

The fund will invest 80-85% in debt instruments that will mature in line with the duration of the fund, with the balance 15-20% to be invested in equities. The equity component of the scheme will be actively managed by taking exposure through exchange traded call options. The investment team will evaluate the prevailing premium levels on the call options with tenure suitable to the scheme. The fixed income component will be passively managed. The fund will invest in "AAA" or A1+ and equivalent rated fixed income securities with maturities in line

with the maturity of the Scheme with an aim to protect capital at the time of maturity. The fund shall not invest in debt instruments issued by companies in the construction, real estate, gems & jewellery, micro finance institutions, hotels, shipping, telecommunication, airlines, biotechnology and refractories and ceramics. The fund expects the equity exposure through call options to help investors achieve superior risk adjusted returns over the tenure of the fund. The minimum investment amount is Rs 5,000 and in multiples of Rs 10 thereafter. After the NFO, the Units of the Scheme will be listed on the NSE, where investors can buy or sell units at market prices.

Why invest? Capital protection fund helps you preserve your capital, and gain a marginal exposure to equities. This has the probability to give you higher risk adjusted returns. Why not invest Since the fund is close ended, liquidity will be very low. In case you wish to sell units, before the end of the tenure you may have to do so at a discount to the NAV

Insuring your home, valuables may be as important as housing loan cover

Disasters, natural or man made, often serve as a rude reminder about buying insurance covers. Tremors in Delhi caused by the recent massive earthquake in Iran and the building collapse in Mumbra, near Mumbai, were two such incidents. Sure, the issue is a bit complex in the latter case, but it shouldn't prevent you from thinking about the importance of buying a home insurance cover. Buying adequate insurance cover for your house, particularly if you have a home loan or keep valuable items at home, is the only solution to keep such unpredictable events from ruining your financial stability. "The requirement of a home insurance was overlooked and understated in India. However, the scenario has changed over a period of time. Today, there are many convenient options available in the market that help one secure not only the property but also their belongings. The youth are also investing in homes, offices, etc, to ensure that all their assets are protected at the time of crisis," says Mukesh Kumar, member of executive management and head, strategy planning, HR and Marketing, HDFC ERGO. Now, most home loan borrowers are familiar with home loan insurance cover, thanks to their lenders and their insurance partners almost forcing them to buy a cover. However, home insurance is quite different. While home loan insurance offers to repay the loan if the policyholder dies before clearing the loan, home insurance comes into play if your property is damaged due to man-made or natural calamities. Such policies offer cover for both the structure as well as the contents in the house. However, you need to specifically ask for the contents cover if you intend to insure your belongings in the house. You only need to fill up the proposal form listing all the items you want to cover while buying the policy. You will have to furnish first information report (FIR), fire brigade report or other details the insurer may ask for at the time of claim settlement. Coverage is extended against damage due to earthquake, fire, lightning, cyclone, bursting or overflowing of water tanks and so on. Some policies also offer additional coverage against terror attacks, burglary and theft, while in some cases these are part of the base cover itself. Policyholders receive compensation for the replacement value of their property and contents inside the house. "So, the sum insured for the building should neither be the cost of acquisition nor the current market value of the house, but today's construction cost because the market value of the building includes cost of land on which the house is built," advises Sanjay Datta, chief, underwriting and claims, ICICI Lombard. Similarly, for household appliances, gadgets, jewellery, furniture and other equipment, ascertain the cost of replacing them. In other words, market value of similar products, minus depreciation (depending on the items) will be the sum insured. "However, the claim amount payable would be the amount required to bring the damaged item to the same condition as it was prior to the damage, subject to the adequacy of the sum insured," he explains. Loss of jewellery and other valuables are covered, subject to the sub-limits or ceilings mentioned in the brochure. For instance, your policy could specify that the valuables cover will not exceed 25% of the total content sum insured or Rs 1 lakh, whichever is lower. Hospitalisation expenses, too, are paid for if you are injured during the incident. Clearly, the utility value of such covers is quite high. In fact, most banks today advise home loan borrowers to buy this cover. Home loan agreements contain a standard clause that requires lenders to insure their house adequately against disasters. However, even otherwise, it is in your interest to get your home insured. Remember, if your house is destroyed during such mishaps, you will be left with no shelter, but the burden of repaying the home loan will continue. "Even if it is not compulsory as per your banks to buy home insurance, it makes sense to opt for one. Else, the borrower will have to bear the losses in the event of damages caused by earthquakes or other natural disasters," says VN Kulkarni, chief counsellor with the Bank of India-backed Abhay Credit Counselling. However, if your bank is keen on selling its insurance partner's policy to you, compare the features with other products in the market before giving your assent. There is very little variance in product features and premium rates, but choose your policy after a careful comparison. For the structure-only cover, the premium could be in the region of Rs 60 per lakh of sum insured. For example, if your sum insured (built up area in sq ft X cost of construction per sq ft) is Rs 20 lakh, you will have to pay an annual premium of Rs 1,200. Lastly, do not forget to go through the list of exclusions or claims that won't be entertained by the insurance company. For instance, your claim will not be admitted if the damage has been caused by natural wear and tear or depreciation. Similarly, you will not be paid if you have deliberately caused harm to your property. Other exclusions include loss due to war, invasion, civil wars, revolution and so on. More importantly, the policy will not come into play if any property or contents are illegally acquired or stored. Also, if you are operating your business from your house, you should not buy this policy, as it is meant only for residential properties. The policy wordings of such covers could also specify a deductible amount — you need to bear this expense out of your own pocket before the insurer chips in with the rest — for certain items.

Insurance cover for overseas students launched by private company

A private general insurance company has launched a policy for Indian students studying abroad or planning to do so. The policy pays for expenses incurred by the immediate family member if they visited the insured student in case of emergency or if the student had to visit them in similar circumstances. The 'Student Suraksha - Student Overseas Travel' policy provides cover against unforeseen expenses such as hospitalisation, accidental death, permanent disablement and dental treatment.

It has additional covers such as personal liability, bail bond, sponsors' protection, study interruption, loss of passport and checked-in baggage loss. It includes worldwide cover for students from 30 days to 2 years without any medical or health check-up requirements

The policy can be bought by an individual between the age of 16 and 35, who is a full-time registered student of an education course outside India. The policy pays the cost incurred in the event of a visit by one immediate family member abroad in case of medical emergency or in a reverse situation.

LIC Scripts New Record: Earns Profit Of Rs 20,000 Cr In FY' 2012-13

The largest insurer of the country, Life Insurance Corporation (LIC) of India has registered a record profit of Rs 20,000 crore (highest in around 7-8 years) in fiscal year 2012-13.

The state-run insurer now aims to invest Rs 2.15 lac crore in the current fiscal out of which 10-15% or Rs 21,500 crore will be in equities.

In an interview with a business channel on Monday, LIC chairman Shri D K Mehrotra said, ““The profit that we booked last year has been the highest in the last almost seven-eight years because we did get good opportunities."

Last month, Shri Mehrotra, who is due to retire next month, had said that the fiscal year 2013-14 should see LIC “having a total investment target of, say, Rs 2.25-2.3 lakh crore."

“Of that, about 10% should go to equity. If something better comes, say, an IPO comes; we should raise it a bit. About Rs 25,000-30,000 crore."

It is widely believed LIC would be in focus once the divestment issues start hitting the market in the coming months. The government has set a target of Rs 40,000 crore by selling partial stake in listed PSUs. In FY 2012-13, LIC participated in seven divestment offerings - Hindustan Copper, NMDC, Oil India, NTPC, Rashtriya Chemicals and Fertilizers (RCF), Nalco, and SAIL.

Shri Mehrotra, however, had denied being labelled the government's 'bailout agency' asserting that all of LIC's investment decisions were based on its own assessment of market conditions and the fundamentals of the company.

Use Of Tinted Glass In Vehicle May Blow Off Insurance Claim

Owner of vehicles with tinted glass may soon, not be eligible to claim insurance for it, in case it meets with an accident.

As per a report, the Union Road Ministry has written to the Insurance Regulatory and Development Authority (IRDA), asking it to disallow owners from claiming insurance for vehicles whose windows and windscreens are darker than permitted. The ministry says that tinted glass or solar films in vehicles would be considered a violation of the warranty conditions in the insurance policy.

The Central Motor Vehicle Rules 1989 says that the windscreen and rear window of a vehicle must have atleast 70% visual light transmission. For side windows, it should be at least 50%.

The Union Road Transport Minister Shri C.P. Joshi wrote a letter to all chief ministers asking them to start a drive against tinted glass in their respective states.

“All of us have been watching with deep concern and anguish the repeated incidents of crimes against women in vehicles, most of which had tinted glasses or solar films," said the letter.

The letter came in the backwash of the infamous Delhi gang rape, in which a paramedical student lost her life after being brutalised in a moving bus that had tinted windows.

“Registration of vehicles, which continue to violate the rules notwithstanding the suspension of registration, may be cancelled. Issuing challans to offenders is not a solution to the problem of tinted glass", Shri Joshi wrote.

Furthermore, he wrote, “Whenever a vehicle with tinted glass is found (to be) involved in a crime, or causes damage to another vehicle or bodily harm to a third party, the vehicle must be impounded by the law enforcement authorities of the states and maximum penalty provided for in the MV (Motor Vehicles) Act must be imposed on the offending vehicle owner."

“Ideally, all officers of the traffic police should be equipped with a handheld device which when fed with the offending vehicle's registration number, should reveal data on its past challans (or offences). But none of the state traffic police can afford such devices," said a transport official.

In an another idea, which the road transport ministry has conceptualized to track down repeat offenders, an officer will only have to send a text message with the offending car's registration number to the National Informatics Centre (NIC). The NIC will send information related to the past offences of the vehicle to the mobile number from where the query came.

The Haryana government has barred ICICI Prudential Life Insurance for three years from doing any further business with it or any of its departments for "intentionally delaying" the process of distribution of annuity to land owners and failure to carry out commitments.

"ICICI Prudential Life Insurance Company needed to be blacklisted," the state's Finance Department said in a statement.

When contacted, the company declined to comment on the matter.

"The noticee can, however, opt to pay compounding fee in lieu of entire or a part of the black listing period within one month from the date of this order.

"...this is by paying penal interest at a rate of one per cent for every six months or part thereof of the blacklisting period proposed to be compounded, by making a request to the government in this regard," the statement said.

Such enhanced rate of interest would be payable on the amount advanced to noticee for the period from date of receipt of advance till the date of repayment of advance and interest at SBI base rate to the Department, it said.

Necessary orders for allowing compounding of the black listing period will be passed after receipt of the requisite compounding fee, it added.

An Expression of Interest was issued in February, 2011 inviting bids from insurance companies and banks for the purpose of providing services for disbursement of annuity to the land owners under the R and R Policy of the state government.

The bid-cum-tender document were submitted by ICICI Prudential on March 31, 2011.

Thereafter, several rounds of discussions were held between the noticee and the state government with respect to various stipulations and condition stated in the draft Services Level Agreement, it said.

This included the obligation of the noticee as the Service Provider with respect to collection and validation of data of the beneficiaries under the scheme of annuity, it added.

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India First Life Insurance expects to break even by 2015-16

India First Life Insurance expects to break even in 2015-16, two years ahead of the original deadline, a senior company official said today.

"We had originally set break even target in the eighth year of our operation, but we think we could break even in the sixth year at the current growing rate," India First Life Insurance Managing Director and CEO P Nandagopal said.

The company, a joint venture between Bank of Baroda, Andhra Bank and UK's Legal & General, started its operations in 2010.

Private insurer recorded a 34 per cent growth in the new business premium by collecting Rs 1,316 crore in 2012-13 against Rs 980 crore in the previous fiscal.

The company has reduced its operating expense ratio to 16 per cent from 19 per cent, he said.

"Our business strategy of keeping operational expenses low and pushing efficiency by introducing new technology initiatives is paying off," he said.

Talking about the business plan for the current fiscal, he said, the focus of the company would be on pension and health insurance.

The company would be coming out with some new products in this space in the second half of the current fiscal, he added.

The company started with the bancassurance model and would look at expanding other channels, including the agency model. Bank of Baroda holds a 44 per cent stake in India First, while Andhra Bank and Legal & General hold a 30 per cent and 26 per cent stake, respectively.

Reliance Life eyes expansion in health insurance space

Looking to tap the low customer penetration in health insurance segment, leading private insurer Reliance Life Insurance is planning to strengthen its presence in pure health insurance space with an expanded product suite. Health insurance is mostly dominated by general insurance companies at present, but life insurance firms have also started offering health-focussed products of late. Reliance Life, part of Anil Ambani-led Reliance Group's financial services firm Reliance Capital Limited, has also launched two new health products - Reliance Life Care for You Advantage Plan and Reliance Life Easy Care Fixed Benefit Plan.

"Health insurance is an important part of our comprehensive protection portfolio designed for customers because the health sector offers a huge service opportunity," Reliance Life Insurance CEO Anup Rau said. "Health insurance penetration in India is as low as 5 per cent, with over 85 per cent of the 1.4 billion population having no health cover. We see health segment as an opportunity to serve all requirements of customers and their families in short, medium and long-term," he said.

The company currently has three health plans in its product basket. Going forward, Reliance Life Insurance has plans to further strengthen presence in pure health insurance space. "Keeping in mind needs, difficulties and worries faced by customers while meeting their health expenses, we have innovated health products to help them meet their healthcare exigencies and costs at every stage of life effectively and fill the gaps in health space," Rau said. "We recognise health insurance as one of the primary protection requirements for individuals and family members in the country," he added.

The recently-passed new health insurance regulations, which specified the critical illnesses to be covered and standardised definitions, have propelled life insurers to turn their attention towards the health segment. Besides Reliance Life, other life insurers like ICICI Prudential, Bajaj Allianz and HDFC Life are also looking to capitalise on the growth prospects in the health insurance category. On an average, life insurers have two to three per cent of their business coming from health insurance in the retail segment and have a huge growth opportunity as the health market is highly untapped.

General insurance industry see growth slipping this fiscal

The general insurance industry is likely to see a drop in growth in the current financial year compared to the last fiscal due to a slowdown in economic activities, feel industry players. Growth in FY14 is expected to be around 15 per cent, down from 19 per cent last fiscal, they said. "There is a feeling that growth in the general insurance industry will come down. Macroeconomic condition is not sound. Projects are stalled...vehicle sales are down," a top official of a public sector general insurer told PTI today.

He said the dip in growth is more likely to be in the corporate and motor segments than in the retail space. Health and motor insurance are the major contributors to the growth in general insurance industry and a slowdown in economy is likely to affect these sectors the most, the industry players said. Bajaj Allianz General Insurance Managing Director and Chief Executive Tapan Singhel echoed similar sentiments.

"Unless industrial growth picks up, the general insurance industry may see a growth of around 15 per cent this fiscal," Singhel said, adding Bajaj Allianz will, however, report higher growth than industry average in FY14. However, the General Insurance Council (GIC), a top representative body of non-life insurance firms, said it's too early to come to a conclusion regarding growth figures for the just started fiscal. "I think, it's too early to predict growth rate of the general insurance industry," GIC Secretary General R Chandrasekaran said.

Finance Minister Asks Irda To Increase Insurance Penetration

The union finance minister Shri. P Chidambaram on Friday asked the Insurance Regulatory and Development Authority (IRDA) to focus more on its developmental role to increase the insurance penetration in the country. Insurance penetration in India is below its need and potential. Awareness about general insurance is dismal. India is ranked at 52nd in the world in non-life insurance penetration, lower than Sri Lanka, Malaysia. “India has to go a long way to increase insurance penetration", he said Referring to Shri. TS Vijayan, the new chief of Irda, Mr. Chidambaram Said, “For the first time we have a former insurer as the head of IRDA and you have a mandate to develop the insurance industry. While regulations are important, development of the industry is equally important."

TS Vijayan is the former chairman of the country's largest insurer, Life Insurance Corporation (LIC) of India. Mr. Chidambaram was speaking at the launch of an IRDA-backed insurance awareness campaign by the General Insurance Council. “We have 27 general insurance companies in the country, yet the general insurance penetration is 0.71%,“ he said, adding that by every measure there is a long way to go. The insurance density for general insurance in India is less than $9, while it is $53 in China. Gross underwritten premium (GWP) of the sector was Rs 69,000 cr in 2012-13.

FM also emphasized that the insurance awareness campaign should not remain limited to metros like Delhi and Mumbai but should spread to the states like Bihar, Uttar Pradesh, Chhattisgarh and Uttarakhand, where insurance penetration and awareness is considerably low. “This campaign must go to other capitals, this campaign must go to second-tier towns,“ he added.

Five types of bonuses your insurance plan can offer

In the most common understanding of the word, ‘bonus’ is a reward or any extra amount that one may receive over and above the base amount. A similar concept is also applicable to your life insurance policy. In this context, a bonus is an additional sum which gets accrued to the policy on a yearly basis. This amount is paid out by the insurance company to the policyholders upon maturity of the plan, or in case of unfortunate death. What bonus? Premiums paid by policyholders are pooled within the insurance company’s life fund. The company uses these pooled assets to pay out claims. A large part of the life fund is invested in government-secured debt instruments, with a small portion invested in equity to achieve a desired return. Based upon the earnings from the investments made by the company and its claims experience, the company aims to distribute a part of its surplus to the with-profits policyholders in the form of bonus.

The bonus rate is decided after considering a variety of factors such as the return on the underlying assets, the level of bonuses declared in previous years and other actuarial assumptions. Bonus is offered on traditional plans which are built in to the plan structure. To avail of the bonus, it is important that the type of plan you have purchased is a ‘with-profits’ one, often known as a participating policy as well. These types of policies participate in the surplus which gets shared in the form of a bonus to thepolicyholders. Types of bonuses Simple Reversionary bonus (SRB) This type of bonus is calculated on the sum assured only. This bonus is declared annually and is accrued to be paid out at the time of a claim or maturity. Compound Reversionary bonus (CRB) CRB is calculated as a percentage of the sum assured and all previously accrued bonuses. The bonus of each year is added to the sum assured and the next year’s bonus is calculated on the enhanced amount.Let’s take an example to understand which type of bonus is beneficial for you… Rahul Khanna has two participating policies of Rs 5,00,000 each. Let’s assume that on the first policy he gets a bonus using the simple revisionary method and on the second policy he gets a bonus using the compound revisionary method. The SRB declared on the policy is Rs 25 per 1,000 of sum assured, while CRB declared is 3 per cent throughout the policy term. As seen from the table above, the CRB to be accrued at the end of the 10th year is much higher, as compared to the SRB of the same year.

Terminal Bonus: The terminal bonus, also known as a persistency bonus, is a bonus paid to indicate an overall performance of a participating policy. The terminal bonus is paid at the time of maturity or death of the life assured. This form of bonus may be given after staying in the policy for a pre-determined time period and is offered at the discretion of theinsurer. Interim Bonus: Interim bonus is payable for those policies that mature or result in a death claim in between two bonus declaration dates. While the policy has already accrued the bonus declared at the end of the last financial year, there may be a short period in between the bonus declaration date and the maturity/claim date for which the policy has not received bonus. In such instances, bonus is added on a pro-rata basis using the interim bonus rates declared by the company. An interim bonus ensures that policyholders who claim benefits in midst of a year will receive credit for keeping the policy in force for that part of the year. Cash Bonus The insurance company may decide to give the bonus in cash, i.e. bonus accruing in a year will be paid to the policyholder at the end of the year. This gives the policyholder an opportunity to receive the bonus year on year rather than the usual way of accruing till bonus maturity.

Bonus offered While evaluating a traditional policy, it is a good idea to consider beforehand the type of bonus that your plan offers. This would be mentioned in the brochure of the plan, or you could also check with your agent/intermediary. Check bonus rates While choosing your traditional plan, make sure to check the bonus rates offered by them over the years. These rates are usually published on the insurer’s website and will give you an idea of the kind of benefits you stand to gain from the particular policy. Additionally, it is recommended that you check the company’s website as few insurers publish the declared bonus rate on their official website.

Birla Sun Life Insurance launches new endowment plan

Birla Sun Life Insurance has launched a traditional participating endowment plan — BSLI Vision Regular returns Plan — which offers liquidity, long-term savings and life insurance benefit. The traditional participating endowment policy offers secured growth on savings and regular liquidity to meet financial objectives of the customers. In the event of the unfortunate death of the life insured during the policy term, the plan will pay to the nominee the sum assured plus accrued bonuses as on date of death. Bonuses once attached to the policy are guaranteed to be payable on death, survival and maturity, as may be applicable. The policy has tax benefits under Sections 80C, 80D and 10(10D) of the Income Tax Act,1961. A policy holder will start receiving returns every year starting from sixth year up until the end of policy term, thus infusing liquidity early on for a prolonged tenure. Says Jayant Dua, MD & CEO, Birla Sun Life Insurance: “In an increasingly uncertain market scenario, customers are now looking for plans that can provide them some guarantee, growth on their savings and adequate protection so that they can best beat inflation.”

Manulife, HDFC Life among bidders for HSBC India insurance arm

Canada's Manulife Financial Corp and the Indian affiliate of Standard Life plc are among the suitors to place first-round bids for HSBC plc's Indian life insurance business, a stake valued around $200 million, people familiar with the matter said. HSBC plc, Europe's biggest bank, is selling its 26 percent stake in a life insurance joint venture with two Indian state-run banks, as it sheds noncore businesses globally. The winner of the auction will get immediate access to about 5,500 branches of the two state-run banks. Bancassurance - an arrangement in which a bank and an insurance firm tie up so that the insurer can sell its products to the bank's customers - is emerging as a key tool to sell insurance products across Asia as the life insurance industry matures in the region. HDFC Life, a joint venture between India's top mortgage lender HDFC Ltd and British insurer Standard Life; Birla Sun Life, a venture between Indian conglomerate Aditya Birla Group and Canada's Sun Life; and ICICI Prudential Life, a joint venture between India's No. 2 lender ICICI Bank and Britain's No. 1 insurer Prudential, are among the bidders to submit first-round bids last week, the people said. HSBC's two Indian partners in the venture - Canara Bank Ltd and Oriental Bank of Commerce Ltd - could also pare their stakes, the people said, although no final decision has been made on this. That could push the deal value to $800 million, including a bank distribution agreement, they added.

"The biggest attraction for any Indian or foreign bidder in this joint venture would be the vast distribution network, which is absolutely essential in a country like India," said one of the sources directly involved in the process. "There are a very few good partnership opportunities available for foreign players in India, this venture is one of them." HSBC, HDFC Life, ICICI Prudential, and Manulife declined to comment. Aditya Birla Nuvo, majority owner of Birla Sun Life, also declined to comment. Canara Bank Chairman R.K Dubey was not immediately available for comment. Oriental Bank of Commerce Chairman S.L. Bansal declined to comment. The sources declined to be identified because the sale process is confidential. HSBC DIVESTMENTS The sale is part of HSBC's exit from nonstrategic businesses. It has got out of about 50 businesses globally since Chief Executive Stuart Gulliver took over at the start of 2011, including its recent profitable sales of its $9.4 billion stake in Ping An Insurance Group Co of China Ltd (601318.SS) and its $2.1 billion Panama business. Indian laws limit foreign ownership in domestic insurers to 26 percent, although the government has announced plans to ease the cap to 49 percent in the future. "High competition, strict regulations and a moderate growth outlook make this a tough operating market," Barclays said in a report on the Indian life insurance sector last month. "In this environment, the relatively cost-efficient bank channel becomes a ticket to play." BATTERED INDUSTRY Canara HSBC Oriental Bank of Commerce Life Insurance - as the venture is called - was launched in June 2008 and is 51 percent owned by state-owned Canara Bank, 23 percent by state-owned Oriental Bank of Commerce and the remainder held by HSBC. It ranks 16th in India's 24-player life insurance sector by first-year premium - a gauge of an insurer's ability to win new business - which was about 4.07 billion rupees as of the end of January, according to the Insurance Regulatory and Development Authority. The joint venture earned a profit of about 90 million rupees in the October-December quarter, compared with a loss of 74 million rupees a year earlier, according to its website. HSBC would become the third overseas insurer to exit India's life insurance sector in the last year. The industry lost a combined $4 billion in the past decade and was hit by a 2010 clamp-down on the sale of lucrative equity-linked products. State-run Life Insurance Corp of India is the nation's biggest insurer, controlling about 65 percent of the market. India's insurance business was full of promise when it was thrown open to competition in 2000, but instead has been battered by losses, regulatory change, uncertainty and a sharp slowdown in economic growth.

Life insurance penetration in India is about 4.4 percent of the country's gross domestic product in terms of total premiums underwritten annually, according to the insurance regulator. That compares with 8 percent in Japan and 9.5 percent in Britain, offering new entrants and existing players ample room for growth. The big reforms expected to the change the face of the industry include easing the cap on foreign ownership.

Former LIC chairman TS Vijayan takes over as Irda chairman

NEW DELHI: Former chairman of Life Insurance Corporation, TS Vijayan on Thursday took over as the chairman of the Insurance Regulatory and Development Authority (Irda). He succeeds J Hari Narayan who completed his five-year term on Wednesday. ET had reported on January 9 that the government has selected TS Vijayan as the next Irda chief. The regulator in a statement said that TS Vijayan has taken over the charge as chairman from Thursday. Vijayan's appointment as the Irda chief is a sort of redemption as he was unceremoniously demoted to a managing director in LIC in May 2011 following allegations of financial irregularity during his tenure. An internal panel of the finance ministry had found irregularities in investments made by LIC. CBI Investigations did not confirm any of the charges.

Tax concessions for life insurance sector likely in Budget 2013

Life insurance policyholders can look forward to more tax concessions in Budget 2013 as the finance ministry is considering a proposal to do away with service tax on first premium and create separate exemption limit for pension schemes. Besides, the tax authorities are examining whether service tax may be assessed on realisation basis as against the current practice of levying duty on the premium on accrual basis. At present, service tax is paid on dues or receipt of amount, whichever is earlier. However, some of amounts due are never received, similarly amounts received in advance with proposal are not converted into policy. Industry has demanded that service tax liability should be on the basis of receipt of amount and subsequent conversion as premium. Sources said the Income Tax Department is considering creating a separate exemption limit for some insurance pension products over and above the existing limit. Currently under the Income Tax Act, Rs 1,00,000 income tax deduction is allowed on the premium paid along with other approved investments. Industry is expecting that Finance Minister P Chidambaram may make an announcement in this regard which will benefit the consumers as well as the life insurance industry. The slew of incentives being considered by the government for boosting life insurance industry include higher incentives for agents selling policies, sources added. "TDS threshold on agents commission should be to raised to Rs 50,000 from the existing Rs 20,000 since most of life insurance agents are now in a low-income bracket," Max Life Insurance Managing Director Rajesh Sud said. The Central Board of Direct Taxes is also considering whether the total sum paid for post-retirement medical scheme could be made eligible of income tax deductions. Finance Minister P Chidambaram has been pitching for the need to push savings in financial instruments rather than in 'unproductive' assets like gold. The spurt in gold imports has aggravated the current account deficit. Concerned over subdued growth in the insurance sector, Chidambaram had asked the insurance companies to refrain from mis-selling and devise simple products for people to boost growth in the sector. "In my view, the reason why insurance is stumbling in India is because of mis-selling of products and complex products. If you want to sell insurance to India, you must sell simple products and must make it absolutely clear to agents and other officers that they should not mis-sell," Chidambaram had said.

Insurance cover for overseas students launched by private company

A private general insurance company has launched a policy for Indian students studying abroad or planning to do so. The policy pays for expenses incurred by the immediate family member if they visited the insured student in case of emergency or if the student had to visit them in similar circumstances. The 'Student Suraksha - Student Overseas Travel' policy provides cover against unforeseen expenses such as hospitalisation, accidental death, permanent disablement and dental treatment.

It has additional covers such as personal liability, bail bond, sponsors' protection, study interruption, loss of passport and checked-in baggage loss. It includes worldwide cover for students from 30 days to 2 years without any medical or health check-up requirements

The policy can be bought by an individual between the age of 16 and 35, who is a full-timeregistered student of an education course outside India. The policy pays the cost incurred in the event of a visit by one immediate family member abroad in case of medical emergency or in a reverse situation.

MP govt to set up budget hotels at religious tourist sites

The Madhya Pradesh government has decided to construct budget hotels at the state's prominent religious tourism destinations.

The places where these budget hotels will come up include Amarkantak, Maheshwar, Ujjain, Omkareshwar, Chitrakoot, Orchha, Maihar, Panna, Mandla, Multai, Salkanpur and Mandleshwar.

The state government has issued a notification to this effect, an official release said here today. Under the Madhya Pradesh Tourism Policy, there is a provision to give subsidy to investors for constructing budget hotels at prominent religious tourism destinations of the state.

As per the policy, 10 per cent of total capital expenditure or Rs 50 lakh, whichever is less, will be payable on construction of budget hotel on a plot of departmental land bank.

General insurance industry grows 19% in April-Feb period of FY' 2012-13

India's general insurance industry grew by 19.34 % in the 11 months of fiscal year' 2012-13 led by SBI General which recorded more over 3 times growth in gross premium collection as compared to last fiscal year. For the April-February period of fiscal year' 2012-13, the total premium collection of the 27 general insurance cos was Rs 61,885.11 cr. .

The premium share of 21 private insurers stood at Rs 26,655.35cr and grew by around 22.78 %. While, the state-run insurers - New India Assurance, National Insurance, United India Insurance and Oriental Insurance contributed Rs 31,196.3cr and logged a premium growth of 16.87% during the period.

Among the private sector insurers, SBI General Insurance Company collected the highest premium of Rs 653.17cr registering a growth of 209.71%, ICICI Lombard with the largest market share collected a premium of Rs 5,655.27cr and, the second largest private insurer, Bajaj Alliance collected Rs 3,528.24cr premium during the period. .

HDFC Ergo General Insurance collected Rs 2,201.77cr, followed by Tata AIG with Rs 1,903.29cr. Reliance General collected Rs 1,853.26cr for the period. . While, another private sector insurer, Star Health & Allied Insurance witnessed negative growth of 30.26% at Rs 740.39cr. . Market leader New India Assurance with 7% market share collected premium of Rs 8,956.48cr, an increase of 17.21%. It was closely followed by Chennai-based United India Insurance with premium collection of Rs 8,311.44cr.

Germany presses India to raise insurance equity cap

On Thursday, Germany pressed India to raise the foreign equity cap in the insurance sector and reduce tariffs on import of automobiles as a prelude to the much- awaited India-EU Free Trade Agreement (FTA) even as the two countries signed 6 pacts including one under which a German loan of Euro one billion (Rs7,000 crore) will be provided for a green energy corridor in India.

The Indian Prime Minister Dr. Manmohan Singh is currently in Germany to chair the second India-Germany Inter-Governmental Consultations with German Chancellor Angela Merkel. After talks with Prime Minister Manmohan Singh, German Chancellor Angela Merkel said “We are now in a position where we can get there. We have not yet overcome all the difficulties. We are not ready to sign yet but we thank India for paving the way for signing the agreement. We are in a dynamic stage of consultation."

Ms. Merkel, who jointly co-chaired the second round of Inter-Governmental Consultations (IGC) with Singh, however, minced no words when she said that the increase in the insurance cap by India was “undeniably“ an important issue apart from resolution of issues such as tariff rate quota on imports of German cars, Services and Intellectual Property Rights. On the other hand, India is pressing Germany, the biggest economy in Europe, to provide a “strong political thrust“ for inking of broad-based Bilateral Investment and Trade Agreement (BITA) with the 27-nation European block.

HSBC all set to exit Indian insurance biz

HSBC plc, the largest bank of Europe has said that it has decided to sell its 26% stake in a life insurance joint venture, which it runs in association with two Indian state-run banks, as it sheds noncore businesses globally.

If sources are to be believed, Canada's Manulife Financial Corp and the Indian unit of Standard Life are among the suitors to place first-round bids for HSBC's stake Indian life insurance business, which is estimated to be valued at around $200 million. Whoever buys HSBC's stake will get immediate access to about 5,500 branches of the two state-run banks. Bancassurance - an arrangement in which a bank and an insurance firm tie up so that the insurer can sell its products to the bank's customers — is emerging as a key tool to sell insurance products across Asia as the life insurance industry matures in the region.

HDFC Life, a joint venture between India's HDFC Ltd and British insurer Standard Life, Birla Sun Life, a venture between Indian conglomerate Aditya Birla Group and Canada's Sun Life and ICICI Prudential Life, a joint venture between India's ICICI Bank and UK's Prudential are among the firms bidding for the stake in the first round.

According to the sources close to the development, HSBC's partners in India, Canara Bank Ltd and Oriental Bank of Commerce might also sell their stake in the insurance joint venture. Recently, New York Life exited its joint venture with Max Life; and ING left the Indian market by selling its full stake of 26% to Exide.

Buy insurance from licensed insurers only: Irda advised public

On Tuesday, the Insurance Regulatory and Development Authority (IRDA) issued a notice advising general public not to buy insurance products from an unlicenced entity or insurer. The insurance watchdog in a circular said, “The Insurance Regulatory and Development Authority (IRDA) is a regulatory body established by an Act of Parliament to protect the interests of the policyholders and to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith."

“It has come to (our) notice that a few entities under the banner of cargo carriers, couriers/logistic providers/freight forwarders/transporters or involved in similar trade are charging consideration from their clientele towards their contractual liabilities, using the terminology 'insurance', thus creating an impression that they are either insurance entities or arranging insurance on behalf of their clientele,“ said the statement.

Furthermore, the statement said, an entity could function as an insurer or an insurance intermediary only after a licence/certificate of registration from the Insurance Regulatory and Development Authority under the relevant provisions of the Insurance Act, 1938, and the IRDA Act, 1999, for such a business.

Only such a licensed entity can offer an insurance product and collect/charge an insurance premium. The statement also advised the general public to check the truthfulness of the entity as well as the insurance arrangement promised, before making any payment towards insurance premium/consideration.

AEGON Religare unveils traditional guaranteed benefits plan

On Monday, private life insurer Aegon Religare Life Insurance (ARLI) announced the launch of a traditional plan with guaranteed benefits — Flexi Money Back Plus Insurance Plan. Mr. Yateesh Srivastava, Chief Marketing Officer & Head (Talent), said in a statement, “The investment climate remains uncertain and volatile. In such times customers seek shelter in products that provide guarantees. At the same time the money back component of the plan allows for a cash flow at regular and pre-determined intervals."

“In addition to the guaranteed returns customers can also look forward to an upside through accrued bonuses from the first year onward," he added. Aegon Religare, under this plan, offers lot more apart from guaranteed returns. It offers extended life cover that goes beyond the premium payment term, rider that can be added to the plan, to provide extra cover in case of death due to an accident, bonus, guaranteed pay-outs, 40 % of the Sum Assured as maturity benefit at the end of the policy term.

To buy this product, the minimum entry age is 7 yrs. and maximum is 60, 58 or 54 yrs., depending on the tenure of the plan. Whereas, the maximum entry age at maturity is 75 yrs. The minimum Sum Assured is Rs 1,00,000 and the minimum annual premium is Rs 13,033. AEGON Religare Life Insurance Company in India is a joint venture between AEGON (26%), an international life insurance, pension and investment company; Religare Enterprises Limited (44%), a global financial services group; and Bennett, Coleman & Company (30%).

J & K govt. to provide life insurance cover to panchayat representatives

Jammu and Kashmir government has recently said that steps were being taken to provide life insurance cover to panchayat representatives in the state. Mr. Ali Mohammad Sagar, minister for Rural Development and Panchayati Raj, said, “Honorarium and sitting fees of Panchayat Representatives have been fixed and steps are being taken to provide Life Insurance Cover." He said large sum of money was also spent on training the Panchayat representatives under various schemes.

“Under Backward Regions Grant Fund and Rashtriya Gram Swaraj Yojna, capacity building and extensive trainings are being provided to the Panchayat Representatives as per the national capacity building frame work and for the financial year 2012-2013, an amount of Rs 11.85 crore has been made available for the purpose,“ the minister said. Further, the minister said an amount of Rs 230 crore under 13th Finance Commission has been released mainly for the construction of Panchayat Ghars and in convergence with other schemes, a target of 1,788 Panchayat Ghars is to be completed with full funding.

A grant in aid Rs 72.24 crore has been released to the Halqa Panchayats for asset creation, furniture and rent, he added. On MGNREGA, the minister said against the labour budget of Rs 1,077 crore for the financial year 2012-2013, an amount of Rs 1,365 crore has been approved for 2013-2014.

“During the financial year 2012-2013 there has been an availability of Rs 912.37 crore against which an expenditure of Rs 620.41 crore has been made by ending February 2013,“ he said

Canadian insurer Manulife eyes Indian market

ne more foreign player Manulife Financial, the largest insurer of Canada is actively contemplating Indian Insurance sector to find a workable business model to set up shop here. Other foreign players like Allianz, Prudential, Standard Life, Aegon, Aviva and Nippon Life are already present in the Indian insurance sector through joint ventures with their respective Indian partners.

Now, Manulife Financial is closely examining various rules and regulation of the sector regulator Irda including those for the foreign ownership restrictions. Currently, the insurer has a representative office in India. Fiona SF Chan, Asia's AVP (Brand Development and Communications), Manulife Financial said, “We can confirm that we have a representative office in India. We have not pursued India (so far) because of ownership restrictions and, more recently, regulatory changes around product. But we maintain an active research brief and if we can find a business model that we think will work; we'd be prepared to enter India,“

As per current rule, a foreign player can not invest more than 26% in Indian insurance business, but the proposals are underway to raise this ceiling to 49%. The union finance minister Mr. P Chidambaram has expressed confidence that much-awaited amendments to the Insurance Bill may be introduced by the government soon. The Bill seeks to raise foreign investment cap in the sector from 26% to 49 %. Manulife Financial has principal operations in Asia, Canada and U.S.A. At the end of 2012, funds under management of Manulife Financials and its subsidiaries were $535 billion or over Rs 28 lakh crores.

As per the Life Insurance Council data, the Indian life insurance sector saw over Rs 33,633 crore of deployed capital, controlled more than Rs 16.18 lac crore managed assets with 34 crore policies in force as of March 31, 2012.

Reliance Life introduces healthcare policy with cover for hospitalisation, surgery

Indian private sector life insurer Reliance Life Insurance Company (RLIC), a part of Anil Ambani's Reliance Capital Limited, on Wednesday announced the launch of its new healthcare policy- 'Reliance Life Easy Care Fixed Benefit Plan' aimed at meeting both the hospitalisation and surgery expenses of individuals.

Announcing the launch, Mr. Anup Rau, Chief Executive Officer, RLIC, said, “Reliance Life Easy Care Fixed Benefit Plan is designed to cover the two major components of health expenses - hospitalization and surgery, keeping in mind the difficulties and worries faced by customers while meeting the high hospitalization and surgery costs. We are confident that our new healthcare plan will fill the gaps in health insurance and address key concerns among customers on claim amount, increase in premium in case of a claim and coverage on surgeries."

Reliance Life Easy Care Fixed Benefit Plan gives the customer the option of paying a single premium upfront for the entire policy period of five years. This feature is seen as a key differentiator in the domestic health insurance market.

The new healthcare policy offers its policyholders a lump sum benefit of 100 % of sum insured to the insured suffering from 10 critical illnesses, including cancer, stroke, loss of speech, Alzheimer and coma. This plan is available for the people between the age group of 18 to 65 years and can be opted for the plan with guaranteed renewability till the age of 75 years.

Reliance Life Insurance Company is a joint venture between Reliance Capital Ltd., an Indian financial services company and Japanese insurance giant Nippon Life.

Reliance Life launches health insurance plan

Reliance Life Insurance Company today launched a healthcare product -- Reliance Life Easy Care Fixed Benefit Plan -- which offers a fixed rate of premium for five years.

The plan gives the option of paying single premium upfront for the entire policy period of five years at an attractive rate, the company said.

The plan, which will be available to people in the age bracket of 18 to 65 years, provides fixed pay-outs to the insured at various stages of his/her hospitalisation and surgeries, in addition to benefits received from other medical insurance plans.

RBI redefines entry norms for core investment firms into insurance biz

The Bank of Banks in India, Reserve Bank of India (RBI) has allowed core investment firms/companies (CICs) to set up a joint venture company for undertaking insurance business with risk participation, subject to safeguards. In the notification, RBI has said a core investment company should have a minimum net worth of Rs 500 cr and a satisfactory track record. And, also should have registered net profit for three consecutive years if it wanted to enter the insurance business. The notification also said that the level of net non-performing assets shall be not more than 1% of the total advances.

RBI has also clarified that CICs cannot enter into insurance business as agents. CICs that wish to participate in insurance business as investors or on risk participation basis will be required to obtain prior approval of the Reserve Bank. It should be ensured that risks involved in insurance business do not get transferred to the CIC. Further, the notification said, “CICs cannot enter into the insurance business as agents. CICs that wish to participate in the insurance business as investors or on risk participation basis will be required to obtain prior approval of the Reserve Bank (which) will give permission on a case-to-case basis, keeping in view all relevant factors."

As for the non-deposit taking systemically important CICs, they a are required to maintain adjusted net worth which shall be not less than 30% of aggregate risk weighted assets on balance sheet and risk adjusted value of off-balance sheet items. Further, the Reserve Bank clarified that no CIC would be allowed to conduct such business departmentally. Further, an NBFC (in its group / outside the group) would normally not be allowed to join an insurance company and hence should not provide direct or indirect financial support to the insurance venture.

Within the group, CICs may invest up to 100% of the equity of the insurance company either on a solo basis or in joint venture with other non-financial entities in the group. This would ensure that only the CIC either on a solo basis or in a joint venture with the group company is exposed to insurance risk and the NBFC within the group is ring-fenced from such risk. In case where a foreign partner contributes 26 % equity with the approval of IRDA/FIPB, more than one CIC may be allowed to participate in the equity of the insurance joint venture.

HDFC Ergo to focus on health, motor segment to sustain growth

MUMBAI: Private sector general insurer HDFC Ergo is planning to increase its focus on health and motor insurance segments to sustain its high growth, apart from weather segment, a top company official said. "As we are reaching the scale, there is scope for growth in motor business along with health segment. We will also increase our focus on the weather segment," HDFC Ergo General Insurance Marketing and Strategic Planning head Mukesh Kumar told PTI today.

As per the data furnished to the regulator Irda, HDFC Ergo's premium collection stood at Rs 1,998.16 crore during the April-December period of this fiscal, up 34.51 per cent over the corresponding period last year while the general insurance industry is estimated to be growing at around 19 per cent this year.

However, Kumar said it will be challenging for the company to sustain high growth after reaching the scale. "It will be challenging to sustain such high growth, given the high base. But we are sure to grow better than the industry in the next fiscal," Kumar said. He also said the company will focus largely on the retail side of the business to grow in the future. On the corporate business front, he said there are opportunities in the marine segment.

Meanwhile, the company today launched 'Student Suraksha- Student Overseas Travel, which is designed for Indian students who are planning

to pursue higher education abroad or for those already studying abroad.

"New product launches will not be many next financial year as we already have most of products in our portfolio," he said. HDFC Ergo is a 74:26 joint venture between HDFC and Ergi International, which is the primary insurance entity of the Munich Re Group.

Reliance Life Insurance launches new healthcare plan

NEW DELHI: Reliance Life Insurance Company (RLIC) today said it has launched a new healthcare product, which offers full coverage for the entire family under a single policy.

The new scheme 'Reliance Life Care for You Advantage Plan' is a comprehensive coverage for hospitalisation, surgeries and critical illnesses for the entire family in a single policy, the company said in a statement.

"The key feature of the policy is that it allows an insured to pay a fixed premium for a three-year policy. This premium remains fixed for the three-year period, irrespective of the number of claims taken by the insured during the validity of the policy," it added. The coverage offered by this plan ranges from Rs 2-10 lakh with a no claim bonus of 5 per cent of the sum assured for every claim-free year up to a maximum of 30 per cent.

Commenting on the new scheme, Reliance Life Insurance Chief Executive Officer Anup Rau said: "With our new health insurance solution, we are offering the much needed financial security to the customers to meet their health related contingencies and would continue to service them with innovative products."

Watch Your Weight for Health Insurance

In a survey released by Fidelity Investments and the National Business Group on Health, 15% of employers need employees to undergo biometric screening. In general - employees have to undergo blood tests to screen blood sugar and cholesterol, take their weight and waist measurements. "There are some companies saying, 'gee, we're spending an awful lot on health care, we would like you to do certain things,'" says Adam Stavisky, a Fidelity benefits consultant.3% of the employers said they would cut benefits of employees who did not complete the screenings. Benefit experts feel that it is not wrong to expect workers to fill these criteria as this is part of a routine health check and people can work towards a healthier future, once they know how they fare health wise. "It's something that everybody needs to have for their own sake,". "The people who might claim that they are discriminated against would be the very people you'd want to have a primary care physician, and talking to doctors and nurses." Biometric screenings are soon becoming the mainstay of modern corporate programs; almost 40% of employers want to tie biometric measurements to premiums or health incentives. A third of the companies reward employees for lowering their cholesterol or blood pressure and dropping weight. Critics are worried with the practice of "outcomes-based incentives" as it sums up to insurance underwriting and decreases access to health care, which in turn would defeat the purpose of The Affordable Health Care. . "There's real concern that if people perceive some of the new incentives rules as penalizing people for their health behaviors, then that could actually distance people from accessing health care," says Paul Terry, CEO of Stay Well, an employer wellness company that administers biometric screenings. Employers who want to charge premiums based on biometric tests must also legally allow employees who fail the tests to pay the same amount by providing a doctor's note or enroll themselves in a program to achieve their goal. They can get the same benefits by participating in health programs. Stay Well recommends that companies should reward people for taking the biometric tests and setting realistic targets. "Rather than simply saying hit the outcome or else," Terry says, "Why wouldn't we say to employees, show us some progress that you're moving in the right direction in order to achieve the reward?"

A New Website - InsuranceComplaint.com Launched

InsuranceComplaint.com is a new website - it gives policy holders a public platform to air their experience and grievances during the claim process. Statistical data is compiled on insurance claims - on this website, giving the public an open forum to share their experience with insurance claims and look for professional help also. Each state has a Department of Insurance to manage their insurance market, but they lack the resources to investigate all the complaints thoroughly, and also they cannot investigate insurance companies with unfair practices across the State lines. With this target in mind InsuranceComplaint.com, collects all the statistical data on complaints and then sorts out the data by insurance Companies, brokers, agents, independent adjusting company and the type of cover availed. Armed with this check list they investigate the underwriting, policy holder service, in house claims, and field adjusting, along with sales and marketing. The founders of the website are Peter Nicolas and Michael Grady. Grady is an insurance professional with experience in handling claims and Peter is a policy holder who, went through a nightmare when he lost his house and possessions due to a fire. They know firsthand the issues a policy holder can face during a claims process. According to Grady, "Although seemingly unfair, your policy is just your ticket to the fight, no policy no claim." Mike explains that having an insurance policy does not guarantee a worry free claim. "There are no policy provisions that compel your carrier to educate you of your rights therein. Simply put, if you do not understand how to administer your own claim the carrier is not contractually obligated to do so on your behalf. This is not meant to imply that carriers will not offer you any assistance, but the finer points of adjusting the claim are your responsibility and ignorance is no excuse," he says. "The insurance industry has a powerful lobby that has strong influences at the state and national level," states Grady. An individual policyholder cannot match the power and resources of even the smallest carrier. But now, policyholders can band together and level the playing field. There is power in numbers," says Grady.

National Insurance Company to pay family 29 lakh compensation, says MACT

The family of a businesswoman, who was killed after being hit by a rashly driven bus, has been awarded a compensation of over Rs 29 lakh by a Motor Accident Claims Tribunal (MACT) here. The tribunal directed National Insurance Company Ltd, with which the offending bus was insured, to pay Rs 29,38,480 to the husband and two minor children of deceased Zeenat Parveen. "In view of the testimony of prosecution witness 1 (victim's husband) and documents on record, the petitioners have prima facie succeeded in proving that the deceased died due to injuries sustained in this accident caused by the offending vehicle driven by respondent no. 2 (bus driver) in a rash and negligent manner," MACT Presiding Officer Harish Dudani said. Parveen's husband told the tribunal that the accident took place in December 2008 when he and his wife were going to meet some relatives at Shaheen Bagh here on his motorcycle. When they reached sector 24, Noida, the rashly driven offending bus being driven by its driver Rajiv Kumar came at a high speed and hit them from behind. Due to the impact, they fell down and Praveen came under the wheels of the bus. She was taken to a hospital where she was declared brought dead by the doctors, he said. The 38-year-old woman was running her own business in the name of M/s Sharp Industrial Advisory Bureau and was earning Rs 25,000 per month. The bus driver and owner, however, said the accident took place due to negligence of the victim's husband as he was driving the motorcycle at a high speed and was trying to overtake the bus during which he lost control and hit it. The tribunal refused to accept their contention and directed them to pay compensation to the victim's family.

IRDA allows agents of general insurance companies to sell mediclaim policies

Insurance regulator IRDA today permitted agents of general insurance companies to sell mediclaim products of standalone health insurance companies to help increase the penetration of such products in public. "In order to encourage penetration of health insurance and to spread the message of health insurance across the country, it has also been decided to allow Standalone health insurance companies to avail the services of agents, corporate agents of other life or non-life insurance companies to distribute their products provided such agents," IRDA said in a statement. Such agents, however, need to undergo 25 hours training, it said. IRDA added meanwhile that in terms of this permission, any agent cannot offer his/her services to more than one Standalone Health Insurance Company. "The authority had recognised that health insurance cover is the necessity of the Indian public and hence proposed the same as a separate class of business while granting registration to some insurers to act as Standalone Health Insurance Companies to provide only health insurance products," it said. It is observed that currently the Standalone Health Insurance Companies can utilise the services of Life Insurance Agents after converting them into composite agents, which calls for completion of Certification by them, it said. It has been decided to waive mandated certification for Life Insurance Agents desiring to distribute products of a Standalone Health Insurance Company, the regulator said. However, it said, the standalone health insurers desirous of converting life insurance agents into composite agents to sell their products, should do so after making such agents undergo an internal training programme on health insurance. The training should cover the basics of health insurance, health insurance terminology, and products for a minimum period of 25 hours. It added: "Further, it is clarified that such composite agents shall not be allowed to transfer general part of their license to other non-life insurance company without completing certification."

Health insurance: Sooner the better

There are increasing number of people falling prey to lifestyle diseases at a young age. At the same time, the cost of health care is rising exponentially. As a result, paying off healthcare bills is crippling Indian households. Keeping this scenario in mind, investing in a comprehensive health insurance plan to safeguard the interest of the family, has become imperative. It is, however, critical to have a sound understanding of the structure and the benefits of different health insurance products before investing. Health insurance plans can be broadly classified in two categories, namely, indemnity-based and benefits-based. Under an indemnity based plan the insured is paid the entire amount that he spends on medical treatment, provided it is equal to or less than the sum assured. Benefits based plans are mainly critical illness plans under which the insured can claim the entire sum assured for the treatment of a critical illness specified in the policy. Indemnity (typically like a mediclaim) and critical illness plans serve two different purposes, and both must be included in the health insurance portfolio. Investing in mediclaim can prove extremely useful in case of minor ailments such as food poisoning or appendicitis, as all the hospital expenses including tests etc are taken care of by the insurer. However, they become futile in case the insured contracts a critical illness such as cancer which demands much larger expenses over long-term. A critical illness (CI) plan can be extremely beneficial in this case as the lump sum received by the insured can be used to get the illness treated by best professionals.

Motor insurance premium hiked 20% yet insurers say not enough to cover loss

The general insurance industry today termed the decision of the sectoral regulator to increase the motor insurance premium as a step in right direction, but too low to cover losses in this segment. "If you see the exposure draft, there was a proposal to increase premium at a higher rate. Even if done at the proposed level, it was inadequate. So, the current rise is too inadequate to cover the losses in this space on the back of rising accidents and claims," General Insurance Council Secretary General R Chandrasekaran said.

He also said things would not be much different as far as underwriting losses are concerned in the next financial year despite the rise in the premium. The insurance regulator IRDA has increased the motor premium rates by an average of 20 per cent effective next April 1. However, these rates are way below the hike proposed in the exposure draft floated in February.Chandrasekaran, however, said the council would continue its representation to both the regulator as well as the government for increase of premium in this segment. Bharti Axa General Insurance too said the hike is a step in the right direction. "The increased rates are a step in the right direction from the point of view of the insurance industry as this is a loss-making proposition currently.... "However, de-tariffing motor third-party premium would help the customers more as in this case good customers would enjoy lower premium as opposed to the current scenario wherein good customers are subsidising the bad customers," Bharti Axa General Insurance MD and CEO Amarnath Ananthanarayanan said. Another official from a large public sector GI said the company would soon pass on the new premium rates to the customers.

"Whatever the rise that will be passed on to consumers. There is no case for absorbing any part of the rise as this is a loss-making segment," the official said who wished to remain unidentified.

Many of the general insurance industry players are making losses due to high underwriting losses in the motor insurance segment as premium paid are inadequate in comparison to the claims.

Bajaj Allianz to pay Rs 16.65 lakh compensation to road mishap victim's family

The family members of a businessman, who died in an accident with a rashly driven tractor in 2009, have been awarded a compensation of over Rs 16 lakh by a Motor Accident Claims Tribunal (MACT) here.

The tribunal has directed Bajaj Allianz General Insurance Company Ltd, with which the offending vehicle was insured, to pay Rs 16,65,640 to the wife, two kids and father of Mahinder Babber.

"There is nothing on record to dispel the inference that deceased Mahinder Babber died on account of injuries sustained by him in a road accident which occurred on June 26, 2009 because of rash and negligent driving of vehicle (tractor) being driven by its driver.

"There is nothing on record to indicate any negligence on the part of the deceased," MACT Presiding Officer Arvind Kumar said.

Babber's family told the tribunal that the accident took place on June 26, 2009, when he, along with his three friends, was coming to Delhi in his car from Haridwar.

When they reached Sonali river, a tractor trolley, driven rashly by one Ashok, came at a high speed and hit the car, the family said.

Due to this, 49-year-old Babber suffered fatal injuries and died on the spot.

His family said he was doing business and earning Rs 25,000 per month.

The tractor driver and its owner did not contest the case while the insurance company contended that the accident took place due to Babber's negligence.

The insurance company said the truck driver and owner were liable to pay the compensation amount as the driver was not holding a valid driving licence at the time of accident.

Insurance cos not keen on banks as brokers

While the finance ministry is keen on banks to act as brokers for insurance firms, the lenders themselves do not sound too enthusiastic. In his Budget speech last month, finance minister P Chidambaram had stated that after due permissions from concerned regulators, banks will be allowed to tie up with multiple insurance companies to sell life and general insurance products.

Under the present bancassurance structure, banks are allowed to tie up with only one life and one non-life insurance player, each. Moreover, many leading banks also promote insurance companies of their own, so it would not make sense for them to tie up with another player.“It is an opportunity, but at this point in time, we are not considering the brokerage model because we already have our own insurance firm,” said KVS Manian, group head (consumer banking), Kotak Mahindra Bank.Bankers believe that the current partnership model will always score above a broker model because it has more involvement from the bank and the insurance company.

“We want the insurance company to be answerable to the kind of products being sold to our customers. In a broker model it would not be very effective,” said a senior official from a leading private sector bank.Bankers like M Narendra, chairman and managing director, Indian Overseas Bank, are still waiting for Insurance Regulatory and Development Authority (Irda) to come out with final guidelines on bancassurance, before considering a broker model.Insurance players on the other hand sound pessimistic about banks entering the market as brokers.

The industry, which was under a cloud for charging usurious premiums before the regulator stepped in to lower the charges, now hopes that there won’t be another bout of misselling.

“We are not at a stage in the evolution of insurance companies, where this move can be implemented. Banks which do not completely understand the insurance products may lead to mis-selling,” said a senior official with an insurance company, seeking anonymity.

The insurer also felt that the move may inspire undercutting of business by some private players who may end up paying higher commissions to banks to get more visibility for their products.

Irda’s annual report (2011-12) said maximum complaints in the life insurance sector were related to malpractices and accounted for 34,799 complaints out of 100,770 complaints in unfair business practices. In the non-life sector, maximum complaints were policy related, accounting to 38,076 complaints out of 93,155 complaints in the year.

“In my view, the reason why insurance is stumbling in India is because of mis-selling of products and complex products. If you want to sell insurance to India, you must sell simple products and must make it absolutely clear to agents and other officers that they should not mis-sell,” the FM had said last month.

RBI too had shown apprehensions about banks acting as insurance brokers, stating that it may lead to reputational risks. Some private insurers are happy, nevertheless. The move will help them improve the reach of their products in areas which they could have otherwise not been able to touch. The strong presence of public and private sector banks in smaller cities and villages is a big positive they said.

“If this works out, it will promote competition among insurance companies and customers will be given various options to choose from,” said AS Narayanan, chief distribution officer, Bajaj Allianz Life

Public sector insurers to open 1,800 branches in next fiscal

MUMBAI: India's largest insurer Life Insurance Corporation of India (LIC) and four public sector general insurance companies will open around 1,800 branches by the end of the next financial year to cover all Indian villages with a population of over 10,000.

Finance minister P Chidambaram said in his budget speech that state-run insurance companies will open a branch each of life and non-life ventures in towns with a population of 10,000 or more. "All towns in India with a population of 10,000 or more will have an office of LIC and an office of at least one public sector general insurance company," he said, and set a deadline of March 2014 to achieve this target.

LIC will open 256 offices to cover all towns with a population of 10,000 or more. "These will be one man offices and will not require much capital," said a senior LIC executive who didn't wish to be named.

The country's largest insurer has 2,048 branches and around 2,000 satellite offices. In addition, it has 20,000 premium paying points where investors can enquire, buy a policy, make payment, pay renewal premium and get loan application forms.

New India Assurance launches 'online' platform for products

MUMBAI: New India Assurance on Tuesday launched a portal, which will enable customers to buy policies online. The country's largest general insurer will offer products in motor, health, travel and personal accident space through this portal along with policy renewal facilities, the company said in a release here.

"We are offering products of comprehensive private car and two-wheeler insurance, health insurance, personal accident and overseas mediclaim policy. The customer portal 'online.newindia.co.in' will also allow policy renewals."

The existing customers would also be able to link their policies and track their claims among others. The general insurer also launched 'Anywhere Any Time Renewal' facility through which a customer can renew policy in its 1,500 offices and also online, the release said.

The Government-run firm said it would launch its mobility solutions soon, which will have the facility to take and renew the insurance policies offered by it.

New India Assurance had reported a net profit of Rs 517 crore in the first nine months of the current financial year (April-December).

Number of mutual fund accounts decline in 2012-13

NEW DELHI: The mutual fund industry seems to have lost more than 32 lakh investors, measured in terms of individual accounts or folios, in the first 10 months of the current fiscal, with equity funds accounting for most of the losses.


"The number of folios, have fallen to 4.32 crore at the end of January from 4.64 crore in the previous fiscal (2011-12), translating into a decline of 32.45 lakh new investor accounts," as per the latest data of market regulator Sebi about total investor accounts with the country's 44 fund houses.

Folios are numbers designated to individual investor accounts, although one investor can have multiple folios.

Equity schemes were the biggest losers in terms of folios, losing 40.2 lakh new investor accounts. The total number of folios in equity funds plunged to 3.36 crore at the end of January 2013 from 3.76 crore in the previous fiscal.

Equity folios for over 70 per cent of the industry's total new investor accounts.


Mutual fund industry has been facing consistent equity folio closures in the past few months. Besides, equity schemes have seen outflows for the last eight months, with January witnessing an outflow of Rs 2,501 crore.


The benchmark BSE Sensex has gained over 14 per cent in the current fiscal so far (April-January, 2012-13)

According to market participants, investors have used market rally as an opportunity to exit after booking profits.


"The sharp fall in the number of folios can be attributed to profit booking and various merger scheme in the mutual fund industry among others," Quantum Asset Management Company CEO Jimmy Patel said.

Balanced schemes, which invest in equity and debt category, followed closely and shed 1.11 lakh folios to end at 26.07 lakh in January.

Fund of funds lost 34,000 folios to end January at 1.77 lakh.




In contrast, income or debt oriented schemes, gained 8.11 lakh folios and now have 60.61 lakh folios.




Besides, exchange traded funds have 7.32 lakh investor accounts at the end of January by gaining 1.09 lakh folios.

Budget 2013 has many implications for general insurance sector: G Srinivasan, The New India Assurance CO

NEW DELHI: The Budget has many positive implications for the General Insurance Sector. Banks being allowed at act as Insurance Brokers will increase insurance penetration as the large number of Bank Branches could be leveraged to distribute Insurance Products in a more effective manner, said the CMD of The New India Assurance CO.Commenting on the Union Budget 2013 G Srinivasan said, "Allowing the general insurance companies to open offices in tier-II and below towns without the regulatory approval will speed up opening offices in smaller towns."




The Public Sector General Insurance Companies will ensure that there is an office in all towns upto tier-IV by 31st March 2014. This will facilitate better insurance penetration.




Using KYC norms for Bank for insurance purpose will be a great facility for the customers as it will avoid duplication of efforts. Expanding RSBY Scheme to be expanded to include Rickshaw pullers, taxi-drivers etc, will go a long way in providing health insurance to people of this Country.




Public Sector Insurance Companies will use Adalats in a large manner to dispose of pending Motor TP Claims to bring in faster relief to the accident victims.




The Budget will allow Banking correspondents to sell micro insurance products. This will lead to insurance being available in smaller towns and villages through a large number of Bank correspondents, he said.

Briefly Business: LIC selected as default NPS annuity provider

LIC selected as default NPS annuity provider NEW DELHI: Pension fund regulator PFRDA has chosen state-run LIC as the default annuity service provider for subscribers exiting from New Pension System (NPS) and seeking withdrawal of accumulated pension wealth. AirAsia, Tata JV seeks nod for leasing planes new delhi: Air Asia and Tata Group, which have proposed to set up a domestic airline along with Arun Bhatia of Telestra Tradeplace, have sought approval for renting and leasing of aircraft in their application to the finance ministry.

Jet Airways seeks nod to buy Kingfisher slots Mumbai: With the government withdrawing Kingfisher Airlines’ international flying rights and domestic slots, the Jet Airways has approached the civil aviation ministry to acquire six of the vacant slots, according to company sources. IMG formed to look into coal linkages NEW DELHI: The coal ministry has set up an inter-ministerial group (IMG) to look into coal linkages of power plants having capacity of 16,000 MW, which are at advanced stages of commissioning. HDFC Bank raises $500 mn from abroad MUMBAI: HDFC Bank has successfully sold a $500 million five-year bond at 3 per cent coupon, its lowest yet. The money was raised through its Bahrain branch over the last weekend.