Insuring India: Latest Insurance News India, Motor, Health, Travel, Business Insurance

Cricketer Sachin Tendulkar has insured his five-story dream house in Bandra for Rs. 100 crore which is one of the largest insurance deals by a single person. The insurance is provided by a consortium of general insuring companies.

As per one official of a public sector insuring company who doesn’t want to be named, all the four public sector general insuring companies along with a private insuring company have furnished the insurance cover.

The official further added that the annual premium would be around Rs. 40 lakh.

The insurance cover has two parts. First is the fire insurance policy for Rs. 75 crore and an additional cover of Rs. 25 crore for household items like electronic gadgets, furniture and cricket accessories among others.

Tendulkar’s residence stands on the plot which he had purchased for Rs. 39 crore in year 2007.

LIC best in terms of claim settlement: IRDA
[Posted by: InsuringIndia News on Thursday, December 29, 2011 1:16 PM]

The IRDA has announced that the LIC of India has got a much better performance in claim settlement as compared to private life insurers.

In its annual report published this week, IRDA said, "The claim settlement ratio of LIC was better than that of the private life insurers. Settlement ratio of LIC increased to 97.03 % during the year 2010-11 when compared to 96.54 % during the previous year" IRDA said in its annual report released this week.

As compared to LIC, private life insurers rejected a large number of claims. Private life insurers have bettered their performance, but their settlement ratio is still much lower than LIC.

During fiscal year 2010-11, the life insurers settled 8.13 lakh claims on individual policies giving a total payout of Rs. 7,595 crore. The number of claims pending at the year-end were 16,415 amounting to Rs. 306 crore. The number of claims renounced were 17,350 amounting to Rs. 336 crore.

Sliding rupee might increase cost of travel insurance
[Posted by: InsuringIndia News on Wednesday, December 28, 2011 5:12 PM]

Travellers going abroad might have to dole out more money as travel insurance premium may rise due to the slipping rupee.

Insurance companies had set the rates of travel insurance premiums when the value of the rupee was around 44/45 per dollar. Now in view of the currency’s depreciation, the insurers may reconsider travel insurance premiums.

The reason being, the claims for outward-bound travel insurance are paid out by insurers in foreign currency while they collect premium in rupees.

The Indian rupee has seen a depreciation of 22% against US dollar, from 44.46 in January 2011 to 54.29 in December. Industry analysts are predicting that year 2012 would continue to be tough for rupee, and some analysts are predicting that it might touch 58.

RSBY now a reality for domestic workers
[Posted by: InsuringIndia News on Tuesday, December 27, 2011 12:26 PM]

Government of India’s health insurance scheme- Rashtriya Swasthya Bima Yojana (RSBY) for Below Poverty Line (BPL) families is ready to bring health benefits to millions of domestic workers.

RSBY was started by Ministry of Labour and Employment to provide health insurance for BPL families.

The objective of RSBY is to provide protection to BPL households from financial liabilities arising out of health shocks that involve hospitalization.

Families covered under RSBY are entitled to hospitalization coverage up to Rs. 30000. Up to five members of the family including family head, spouse and 3 dependents are covered under this scheme.

The family has to pay only Rs. 30 as registration fees and rest of the premium is paid by Central and State Government to the insuring company partnering with the state Government.

Motor Insurance Premiums to rise from April‎
[Posted by: InsuringIndia News on Sunday, December 25, 2011 12:24 PM]

Insurance premiums for vehicles are set to rise from coming April as IRDA has decided to substitute the 3rd party motor pool by a ‘declined pool'.

In all likelihood, the premiums will go up because of risk-based pricing; the increase could be anywhere from 20% to 70%.

In India, motor insurance covers damages to insured and damage to property or life of third party. Clients have the option to choose third party cover or the comprehensive cover. Third party cover is mandatory by law.

The third party pool was started in April 2007 by all general insuring companies to provide 3rd Party Insurance to all commercial vehicle owners at reasonable rates.

Under the proposed declined pool mechanism, every general insurer will have to issue policies to all who approach it. Only, the liabilities springing up from a stand-alone third party cover will be shared among general insuring companies from the pool.

IRDA scraps motor pool
[Posted by: InsuringIndia News on Saturday, December 24, 2011 12:23 PM]

The Insurance regulator IRDA has ordered scraping of the motor insurance pool. motor insurance pool was created to share liability claims by all general insuring companies no matter if they were motor insurance or not.

The move will push insuring companies to be more effective in handling liability claims. Motor insurance pool will be substituted by a syndicate of declined proposals in which only insurance claims from vehicles regarded to be uninsurable will be shared.

Public sector companies will be most affected as they have the highest motor third-party claims and it will be a positive for private insurers which now will not have to fully share public sector insurers’ losses.

Tamil Nadu to launch C.M's Health Insurance Scheme next month
[Posted by: InsuringIndia News on Friday, December 23, 2011 12:40 PM]

United India Insurance for the health scheme. More than one crore families in Tamil Nadu will benefit from the Health Insurance Scheme.

DMK first introduced public health insurance scheme during its tenure which was scrapped by current CM Jayalalithaa. The previous contractor, Star Health Insurance, was asked to end its operations and a makeshift scheme was set up by the C.M. Afterwards it was decided to allow only public insurers United India, Oriental Insurance Company, New India Insurance Company and National Insurance Company to bid.

The new scheme covers family up to Rs. 1.5 lakh per annum and includes medical management, against surgical interventions and treatment to newborns.

A.M. Best affirms United India Insurance credit ratings
[Posted by: InsuringIndia News on Thursday, December 22, 2011 12:12 PM]

A.M. Best Co. has substantiated the issuer credit rating of ‘bbb+’ and financial strength rating of ‘B++’ of United India Insurance Company Limited. The vantage point for both ratings is stable.

These credit ratings portray United India's strong business profile and strong capitalization in insurance sector and management's obligation to enhance the organization's underwriting functioning.

United India is a public sector insurer and has 1340 offices, 18300 employees and covers more than 1 crore policy holders.

A.M. Best Company is the world's oldest and most authoritative credit rating organization for insurance industry. Best's ratings are used as means of evaluating the creditworthiness and financial strength of risk-bearing entities and investment vehicles.

A.M. Best assigns three types of ratings; Best's Financial Strength Rating, Best's Issuer Credit Rating and Best's Debt Rating.

IRDA warns industry against unhealthy practices
[Posted by: InsuringIndia News on Wednesday, December 21, 2011 11:59 AM]

IRDA Chairman Mr. J. Hari Narayan has warned the insurance industry against unhealthy business practices.

He said, “This was driving down premium incomes raising fears of the health of the insurance industry,'' he said while inaugurating the 8 summit of the Insurance Brokers Association of India. “The broking industry too would get affected if this goes on.”

He pointed out that the responsibility for fair practices plainly lies with the insurers. He stated there were no reasons for the companies to compete on the prices in these times when the market is growing at a very fast pace.

He warned that if this unhealthy trend is not stopped, then there would be grave fiscal trouble for the insurers.

Indian Pharma Cos to benefit from S Africa's National Health scheme
[Posted by: InsuringIndia News on Tuesday, December 20, 2011 12:04 PM]

Indian pharmaceutical industry will get new opportunities when South Africa will implement its purported National Health Insurance (NHI) scheme.

In a seminar organized by Indian High Commission of South Africa in Johannesburg, delegates discussed a various topics related to this issue.

On the occasion, Virendra Gupta, High Commissioner to South Africa said, "The idea was to create a sensitisation about our engagement in this very important sector.”

The High Commissioner further added, "I'm also happy to see a qualitative shift that is taking place, which is that Indian companies have reached a certain threshold in volume terms and are now beginning to expand their linkages by creating joint ventures, establishing manufacturing facilities and engaging in transfer of technologies."

South Africa is India’s 4th largest market, after UK, America and Russia.

Shriram Capital plans to repurchase Sanlam's Stake in Insurance Joint Ventures
[Posted by: InsuringIndia News on Monday, December 19, 2011 3:27 PM]

Shriram Capital is planning to repurchase Sanlam Group's 26 percent share in the insurance joint ventures - Shriram General Insurance and Shriram Life Insurance to abide by FDI rules imposed by the Indian government on the insurance sector.

Shriram Capital will also raise its share in Shriram Transport Finance from to 25 percent from 21 percent.

In September, Sanlam Ltd. announced a Rs. 1200 crore investment in the joint ventures.

This investment gave Sanlam extra collateral holding in the insurance business, transgressing the FDI limit of 26 percent allowed in Insurance business. Therefore, Shriram Capital is repurchasing Sanlam's stake in insurance Joint Ventures.

Shriram Capital is the holding company for the insurance companies of the Shriram Group, namely Shriram Life Insurance Company Ltd and Shriram General Insurance Ltd.

Finance Minister directs LIC to open branches in 18 districts in South India
[Posted by: InsuringIndia News on Sunday, December 18, 2011 1:00 PM]

Union Finance Minister, Pranab Mukherjee has directed LIC and general insurers to open at least one branch in all districts in South India in next year.

In South India, out of the 156 districts, 18 do not have a branch of LIC. 4 districts are without branches of general insurance companies. Union Finance Minister, Pranab Mukherjee addressed the issue at a press conference after chairing the meeting with the CMs of south zone States and Union Territories and leaders of public sector banks in Bangalore on Sunday.

According to Mr. Pranab Mukherjee, the southern India has a healthy credit-deposit ratio. Andhra Pradesh has demonstrated an imposing growth of 114.9%, Tamil Nadu 177.2%, Kerala 75.9% t and Karnataka has shown a growth of 74.6%. Credit-deposit ratios of Andaman and Nicobar, Pondicherry and Lakshadweep are slightly less than the 60%.

Fire insurance premium for hospitals may increase
[Posted by: InsuringIndia News on Saturday, December 17, 2011 12:57 PM]

After the fire at Kolkata’s AMRI Hospital last Friday, in which at least 90 people were killed, insurance companies are in the mood to increase fire insurance premiums for hospitals all across the country.

Insuring companies are diligently inspecting fire safety arrangements at hospitals to which they have sold policies. Those hospitals not following proper rules and measures would be put under the high-risk class. All companies under the high-risk category have to pay a high premium of about Rs. 3 per Rs. 1000 of insurance cover. Presently all hospitals are paying approximately Rs. 1.80 on the average.

Hospitals found lacking in fire hazard rules will be asked to follow the regulations within an explicit time period, and failing to do so, will result in cancelling of their insurance cover.

MetLife launches ULIP “Met Smart Child” for child education
[Posted by: InsuringIndia News on Friday, December 16, 2011 12:09 PM]

MetLife India Insurance Company has launched a new ULIP plan in the market by the name of Met Smart Child. The plan will cover child’s higher education.

Previously, MetLife India had a Child Savings Plan in its portfolio by the name of Met Bhavishya. Met Smart Child is the second child saving plan introduced by the company. In this plan, the funds will remain locked away till the child attains 18 years.

The plan is available for 10, 15 and 20 years. The minimum premium is Rs. 18000. The amount covered will be equal to ten times of the premium and will remain fixed during the full Policy term. The plan covers six unit linked funds for policy holders from which they can choose.

MetLife India Insurance Company Limited is a joint venture between MetLife International Holdings, M. Pallonji and Co. Private Limited and The Jammu and Kashmir Bank, and some private investors.

IRDA planning to allow Indian Insurers to establish overseas joint ventures
[Posted by: InsuringIndia News on Thursday, December 15, 2011 12:10 PM]

Soon Indian insuring companies are going to increase their influence all over the world. The IRDA is planning to permit Indian insurance companies to launch overseas JV subsidiaries with foreign insurers.

Recently, IRDA issued draft guidelines to permit all types of insuring companies and reinsurers having ten years of operations to set up insurance subsidiaries, joint venture companies or branches abroad. The foreign partners in these joint ventures cannot set up their branches in India.

Presently, private insuring are not allowed to set up branches abroad or buying stakes in foreign companies to establish a joint ventures but foreign insurers can purchase up to 26% stake in an Indian insurance company.

India may have to purchase N-cover from international markets
[Posted by: InsuringIndia News on Wednesday, December 14, 2011 12:19 PM]

Indian insuring companies can insure only 78 million dollars out of the 320 million dollars liability insurance as directed by the government for N-plant operators. This is forcing General Insurance Corporation (GIC) to look abroad for buying insurance cover from international markets. In this scenario, N-plant operators will be required to open up their reactors for inspection.

Chairman of GIC, Yogesh Lohiya said, "India is at an incipient stage of private participation in power. We had a meeting with local insurance companies to create a nuclear insurance pool. But we have managed to get commitments from only 7-8 insurers for capacity of $78 million as against the target of $320 million."

General Insurance Corporation has been given the responsibility of arranging the compulsory 320 million dollars liability insurance cover for nuclear plant operators. GIC presented a demo to Department of Atomic Energy officials, Atomic Energy Regulatory Board and Nuclear Power Corporation. Also present were experts and underwriters from Russia and China, who explained how reactors in their countries are inspected by global nuclear pool agencies and its benefit to the plant operator.

Lok Sabha approves LIC bill
[Posted by: InsuringIndia News on Tuesday, December 13, 2011 12:32 PM]

On Monday, Lok Sabha passed the LIC?(Amendment) Bill, 2009.

The Bill seeks to raise the paid-up capital of LIC to Rs. 100 crore from Rs. 5 crore besides and making the public sector insurer comply with the same regulatory rules as other life insuring companies.

The act will put LIC on equal footings with private insuring companies. The amendments in the bill were recommended by IRDA.

Several members of Lok Sabha emphasized the need to secure the interests of employees and customers of LIC under the new law.

Minister of state for finance assured the members that the new law will not have an effect on present policyholders, and the government will keep on to providing the sovereign guarantee to the policies sold by LIC.

The Bill was first introduced in December 2008 in Lok Sabha, but couldn’t be put to vote. It was reintroduced by FM Pranab Mukherjee in year 2009.

Once passed by both the houses of Parliament, it will be sent to President for her approval before becoming a law.

R-Cap in talks to sell 26 percent stake in its general insurance arm
[Posted by: InsuringIndia News on Monday, December 12, 2011 12:28 PM]

Reliance Capital is in negotiations with three offshore companies to sell 26 percent of the stake in its general insurance firm. These three companies are Samsung Fire? and Marine Insurance Co. Ltd., include Travelers Companies Inc. and the general insurance arm of Samsung Group.

At present, Reliance General Insurance Co. Ltd. is working without a foreign partner. According to Indian regulatory rules, a foreign company is permitted to hold up to 26 percent stake in an Indian non-life insuring company’s business.

A major percentage of Reliance General’s income comes from motor insurance. During the fiscal 2010-11, the company posted a loss of Rs. 310 crore, as compared to the loss of Rs. 91 crore previous fiscal.

If Reliance-Cap is able to sell 26% stake in the general insurance business, it will be its second such tie-up lately. In September 2011, Reliance-Cap sold a 26 percent stake in its life insurance business to Nippon Life for Rs. 3,062 crore.

Bajaj Allianz launches a new unit linked plan
[Posted by: InsuringIndia News on Sunday, December 11, 2011 11:49 AM]

Bajaj Allianz Life Insurance has brought a new unit linked plan in the market by the name of “Guaranteed Maturity Insurance Plan”. At maturity, the product will provide a secure life cover along with minimum 200% returns on the principal invested.

The product is the lowest single premium ULIP in India with the minimum single premium as low as Rs. 5000.

The plan provides life cover all across the total term of 10 years and gives the flexibility of partial withdrawal after five years. There are no allocation charges. The policy holders can avail tax benefit under section 80C.

IRDA issues guidelines for Agents Training Institutes
[Posted by: InsuringIndia News on Saturday, December 10, 2011 11:18 AM]

The Insurance Regulatory and Development Authority have issued guidelines for authorization and renewal of Agents Training Institutes (ATIs).

The verification and granting of licences to these institutes will be done by a Standing Committee established by IRDA in 2010.

In a statement, IRDA said, "Only (those) entities registered as a company under the Companies Act and society and trusts under Societies Registration Act shall be eligible to apply for accreditation as Agents Training Institutes."

IRDA has also declared that only those institutions which have been in the field of training for insurance products for more than 3 years would be entitled to start an ATI.

Those institutes which want to start a new ATI can apply twice a year. ATIs will also have to register with Provident Fund Commissioners.

Insurance brokers to help settle claims
[Posted by: InsuringIndia News on Friday, December 09, 2011 12:40 PM]

In a move welcomed by industry, IRDA has given permission to insurance brokers to offer consultancy for insurance claims. Now the policy holders can approach insurance brokers not only for purchasing insurance but also for claim settlements.

Insurance brokers have been demanding for long allowing them to set up a claim consultancy service. Insurance brokers can offer consultancy for claim settlement up to Rs. One crore if they are not based on polices, which have been placed by any other broker.

In a circular issued by IRDA, Mr. J. Hari Narayan said, “It will be in the interest, particularly of the relatively smaller policyholders, to provide an avenue to such policyholders to obtain more competent advice, particularly in the matter of settlement of claims.”

Insurance brokers will have to get a written permission from the policyholder while conducting claim negotiations with the insuring company.

The fee for consultancy will be mutually decided by the broker and the policy holder. In case of any conflict between brokers springing up out of such consultancy arrangements shall be mediated by the Insurance Brokers Association of India. The association would forward the same to the IRDA with its recommendation for final disposal.

SKS Microfinance to cut its microfinance exposure
[Posted by: InsuringIndia News on Thursday, December 08, 2011 2:06 PM]

SKS Microfinance is working out to cut down its exposure in microfinance and increase income from associated operations to protect itself from the on-going upheaval in the finance sector. SKS Microfinance recently wrote off a Rs. 1200 crore loans in Andhra Pradesh.

SKS Microfinance started its journey in year 1998 as an NGO and today is a for-profit NBFC regulated by Reserve Bank of India. SKS loans out small amounts beginning from Rs. 2000 to Rs. 12000 to poor women so that they can have sustainable income. The micro-endeavours range from raising cattle for selling milk, to starting a small kirana store.

CFO of the company, Dilli Raj said, “We are going to have non-microfinance operations contributing to the balance sheet from the next financial year. These include gold loans, loans disbursed for buying mobile phones, insurance and funding Sangam stores (small kirana stores).”

SKS Microfinance planning to project its return on assets at 3 percent for microfinance business and 1 percent of return on assets from non-microfinance business.

For pursuing the non-microfinance operations, the company is planning to set up a wholly owned subsidiary shortly. The subsidiary will initially focus on gold loans and operations including lending to small kirana stores and mobile phone buyers would be scaled up later.

LIC signs MOU with Dhanlaxmi Bank with for e-payments
[Posted by: InsuringIndia News on Wednesday, December 07, 2011 12:22 PM]

Life Insurance Corporation of India has signed a Memorandum of Understanding (MOU) with Dhanlaxmi Bank to facilitate policy payments through electronic funds transfer for policy-holders.

According to the agreement, the bank will provide e-payment services to the LIC via National Electronic Funds Transfer system to deposit funds in the policy-holders` accounts.

Besides customers of Dhanlaxmi Bank, this association will also benefit LIC policyholders which are customers of other banks.

Sidhartha Routray, head, cash management service sales group of Dhanlaxmi Bank said, “LIC`s decision to tie-up with Dhanlaxmi Bank highlights the bank`s advancement in terms of technology, transaction processing systems and its superior delivery mechanisms. With this tie-up, LIC policyholders can expect immediate disbursal of payments in a convenient and secure environment.”

Terrorism insurance rates may go down as terror pool puffs up
[Posted by: InsuringIndia News on Tuesday, December 06, 2011 11:05 AM]

Terror insurance premium rates may soon come down as the terror pool corpus established for this function has expended and it has received very few claims after its foundation. This terror pool is handled by GIC of India.

All insurance claims originating from terrorist activities are settled through this terror insurance corpus established by general insurance companies in year 2002.

Presently, the terror pool has around Rs. 2000 crore in its coffers, even after a loss of Rs. 400 crore on account of 26/11 attack.

There are developments to revise the pool rates by the underwriting committee since the premium rates in India are much higher than international rates.

There are three broad categories of terror risk and all three have separate premium rating structure. These are residential, non-industrial and industrial risks. For residential, the premium is 10 paisa per Rs. 1000, non-industrial it is 20 paisa, and for industrial, it is 30 paisa.

Clinical trial participants to be covered by insurance
[Posted by: InsuringIndia News on Monday, December 05, 2011 12:43 PM]

The Indian Council of Medical Research (ICMR) has put in a proposal wherein all volunteers taking part in clinical trials will be covered by insurance and in case the anything goes wrong, they will be compensated.

ICMR has now proposed to make compensation mandatory for volunteers if they suffer any harm in the trials. The compensation amount has yet to be worked out.

The ICMR with Forum for Ethics Committees have formulated draft guidelines for research linked injury compensation.

The new guidelines will be applicable to all clinical research, including trials by government, pharmaceutical companies, academia and individual researchers.

The need for remuneration for clinic trials volunteer was felt after a number of pharmaceutical companies violated ethical guidelines and used illiterate people as Guinea pigs.

The participants would get the compensation if they are temporary or permanent injured on account of participation in the research.

Bank of India all set to buy 51 percent stake in Bharti AXA Mutual Fund
[Posted by: InsuringIndia News on Sunday, December 04, 2011 12:40 PM]

Public sector bank- Bank of India has agreed to purchase 51% stake in Bharti AXA Mutual Fund. With this move, Bharti Enterprises will no longer be in the asset management business.

The companies issued a joint statement, “Bank of India and AXA Investment Managers Asia Holdings (a subsidiary of Axa Investment Managers, part of the AXA Group) have agreed to enter into a joint venture in asset management business carried on by Bharti AXA Investment Managers.”

After the necessary approval from regulatory bodies, Bank of India will acquire 26 percent from the AXA Investment Managers Asia Holdings and 25 percent stake from Bharti Enterprises.

After the completion of the deal, the fund house will be renamed ‘Bank of India AXA Investment Managers’.

LICI to provide micro-insurance to customers of SPBD in Fiji
[Posted by: InsuringIndia News on Saturday, December 03, 2011 11:36 AM]

On Friday, the Life Insurance Corporation of India (LICI) and South Pacific Business Development (SPBD) signed a memorandum of understanding (MoU) in which LICI would provide micro-insurance to customers of SPBD.

SPBD is a group of micro-finance organizations based in Fiji, Tonga and Samoa which is dedicated to eradicate poverty by providing poor women in villages with the opportunity to grow and maintain sustainable income.

In its first year of operations, the group has provided opportunities to 3000 women in Lami, Suva, Nausori, Tailevu and Navua.

Now with the assistance of LICI, the company will provide low-cost insurance benefits to poor households.

SPBD’s clients will get a $5000 life insurance cover and an additional death cover of $5000 at a premium of less than $2 per week for people in the age group of 18 to 65 years.

IRDA issues IPO guidelines for life insuring companies
[Posted by: InsuringIndia News on Friday, December 02, 2011 10:40 AM]

On Thursday, IRDA notified guidelines for life insuring companies to raise capital through IPO.

As per the IRDA notifications, only those insurers having a 10 years track record can raise the capital but the companies must first receive IRDA's approval and after that they have to seek the approval of SEBI.

The IRDA's approval will be effectual for one year and insuring companies will be required to file their papers for IPO within that period with SEBI.

Besides having a track record of 10 years, IRDA will also assess the applicants on certain other criteria such as the company’s financial strength, history of compliance with regulative requirements, corporate governance and solvency margin.

Although the regulations have not defined the limit below which domestic promoters of the insuring firms cannot dilute their stake, the IRDA has held back its discretional powers to determine how much, the promoters can dilute their shareholding.

Presently, FDI is allowed up to 26% in a life insurance company. So, a domestic promoter can have equal to 74% stake in a life insurance venture.

Thomas Cook partners with Bajaj Allianz to sell its insurance products
[Posted by: InsuringIndia News on Thursday, December 01, 2011 11:57 AM]

Leading travel services company, Thomas Cook has partnered with Bajaj Allianz General Insurance Company Ltd. as its corporate agent through its subsidiary 'Thomas Cook Insurance Services (India) Ltd'. This business relationship will allow Thomas Cook to provide general insurance products and travel insurance from Bajaj Allianz to its customers all across India.

MD of Thomas Cook India Ltd, Madhavan Menon said, “"We are proud to be associated with Bajaj Allianz, and our tie up will enable us offer a truly diverse range of customer-centric insurance products—customised and bundled travel insurance, motor insurance, health insurance and other general insurance products (both retail and corporate) to our customers countrywide. This association also gives our customers access to superior customer and claim settlement service that Bajaj Allianz is known for."

Tapan Singhel, CMO of Bajaj Allianz General Insurance said, "It is a matter of great privilege to be associated with Thomas Cook, one of the leading travel and travel related financial services company. This association will enable us to reach out to a wider customer base besides offering them protection beyond travel insurance."

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