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Air India Gets Insurance Cover Renewed For $26.75 m As Premium
[Posted by: InsuringIndia News on Sunday, September 28, 2014 12:00 AM]
The national carrier Air India has managed to get insurance cover renewed with 15 per cent rise in premium. Following some major airlines tragedies this year, it has become tough for airlines to get insured.

Before the airlines sought for the renewal, the demand from the insurers was about 25 per cent hike over the existing premium but finally insurers came down to 15 per cent. The airline will be paying $26.75 million to a consortium of public sector insurers led by New India Assurance as premium amount to cover its 132-aircraft fleet.

While the insurance cover will be provided by a New India Assurance-led consortium of public sector insurers, the re-insurance cover is being renewed by a couple of Lloyd's syndicate.

As per the source, the insurance policy which is expiring on September 30, will be renewed soon, and it can keep flying from October 1.

United India Insurance Considers Re-Entering Overseas Markets
[Posted by: InsuringIndia News on Sunday, September 28, 2014 12:00 AM]
United India Insurance, a public sector general insurance company, has said that it is looking to re-enter the overseas markets. The company will soon carry out a feasibility study to assess the business potential, it said.

The insurer was present in Hong Kong, but had shut it down in year 2002.

According to Mr. Milind Kharat, Chairman-cum-Managing Director, United India Insurance, the company is exploring business potential in overseas markets. Also, the company is studying the regulatory frameworks in some of the target markets in this regard.

The company may look at markets of the Middle East and Sri Lanka to begin with, as these markets offer good business potential, Mr. Kharat said.

"Many business houses from Tamil Nadu have commercial and business interest in Sri Lanka. So it is a natural extension for us. In the Middle East, there is considerable expansion in infrastructure, oil and energy and other sectors which again offers huge potential for us”, he added.

Further, he said that there is a great growth potential in Gulf countries, as they have announced large projects like airports, smart cities etc.

New India Assurance, the largest general insurance company of India, is present in 22 countries.

Health Insurers Eye Smaller Markets
[Posted by: InsuringIndia News on Thursday, September 25, 2014 12:00 AM]
Inspired by the success of government-run social security scheme RSBY (Rashtriya Swasthya Bima Yojana), health insurers have started looking at smaller markets for business expansion.

Star Health, a private sector health insurance firm has piloted a small-sized health insurance product across a few districts in Tamil Nadu and Kerala. The sum insured is Rs 1 lac with meagre premium of Rs 1,000 per annum.

According to Mr. V. Jagannathan, CMD, Star Health and Allied Insurance, the increased penetration of healthcare facilities has resulted in lesser movement of patients to metros at least for routine procedures. If a person having small-sized policy gets a procedure done in a metro, the entire sum insured is wiped out very soon. But, the same policy can be better utilised if the policyholder gets treated at his/her home town.

As per experts, a differentiated product offering may help insurers get volumes initially. The growing population and demand for quality health care is pushing insurers to look at such markets. With banks allowed to tie up with one standalone health insurer, penetration is expected to rise.

Today, customers from smaller towns and cities want an open product with minimal exclusions with many not minding to pay additional premium for the same, a senior official at Bajaj Allianz General Insurance said.

Insurance Cos To Fast-Track Claim Settlement Process In Flood-Hit J&K
[Posted by: InsuringIndia News on Wednesday, September 24, 2014 12:00 AM]
With a view to provide quick relief to worst-ever flood afflicted people of Jammu and Kashmir, life insurance companies are fast-tracking claim settlement process.

Leading private sector life insurers Aviva Life and HDFC Life have relaxed their claim settlement process exclusively for victims of Jammu and Kashmir. The insurers have relaxed documentation in terms of minimising the need for relevant papers to facilitate prompt intimation and settlement of death, survival and maturity claims.

According a senior official at Aviva Life Insurance, the insurer has waived off late-fee and revival-fee for lapsed policies for one year (until September 30, 2015.)

This waiver will be valid not only for the local residents but also for those who had been travelling to the affected areas and got stranded due to the floods, the official added.

Other insurer HDFC Life said that the company doesn't insist on death certificate for submitting claims from its policyholders in case the person's name was already registered in Government record as victims. Also, the insurer doesn't ask for policy documents in such cases.

Contract For Air India’s Insurance Renewal Up On October 1
[Posted by: InsuringIndia News on Monday, September 22, 2014 12:00 AM]
The race for getting national carrier Air India's insurance renewal deal has begun between public and private sector general insurers. A New India Assurance-led consortium of public sector insurers has emerged as the frontrunner, while the private sector has rallied behind a group led by ICICI Lombard General Insurance.

The insurance contract for Air India's 105-strong fleet comes up for renewal on October 1 at an estimated premium of about $25 million.

The New India Assurance-led consortium has United India Insurance, Oriental Insurance and National Insurance as co-insurers. While, ICICI Lombard General Insurance-led group has HDFC Ergo and Reliance General as co-insurers.

Following recent rise in aviation mishaps such as a series of Malaysian Airlines tragedy, premiums have increased, pushing up the bill for insurers.

Air India's current insurance policy, issued by New India Assurance, includes a $9.5-billion hull cover and a combined single liability of $1.5 billion.

Surveyors Oppose Proposed Amendments To Insurance Bill
[Posted by: InsuringIndia News on Friday, September 19, 2014 12:00 AM]
The most awaited Insurance Laws (Amendment) Bill-2008, is now being opposed by members of the Indian Institute of Insurance Surveyors and Loss Assessors (IIISLA).

Opposing the proposed amendments to Section 64UM of the Insurance Act and the Insurance Laws (Amendment) Bill- 2008, leader of the surveyors, Mr. Bharat Dharmashi told reporters that this will promote unhealthy practices in the industry.

Mr. Dharmashi explained that if an insured property suffers losses of more than Rs 20,000, it needs to be surveyed by an independent surveyor licenced by the Insurance Regulatory and Development Authority (IRDA).

But, private insurers without bothering regulator’s regulations, hire unqualified agents, he added.

Furthermore, he argued that an unqualified agent prepares survey reports in favour of such companies and do injustice to property owners. "The proposed insurance bill will allow 49% of foreign direct investment (FDI) and injustices to people will mount."

Another surveyor, Mr. M.N. Hegde, said if the proposed insurance bill is passed, it would affect about 80,000 qualified surveyors across the country.

LIC Takes Bullish View Of New Government
[Posted by: InsuringIndia News on Thursday, September 18, 2014 12:00 AM]
Country's largest investor the Life Insurance Corporation (LIC) of India is quite optimistic of Narendra Modi-led pro-business government.

Speaking during an interview inside his office in Mumbai, LIC Chairman Mr. S. K. Roy said he saw few red flags ahead, betting on a long-term rally for the country's stock market under a new pro-business government.

India's equity market has outperformed emerging market rivals this year, thanks to overseas fund interest fuelled by Prime Minister Narendra Modi, who came to power in May with a pledge to boost growth and revive investment. After months of caution, domestic investors are now also growing more confident.

Mr. Roy was ‘very bullish’ about the banking, pharmaceutical, metals and IT outsourcing sectors because of expectations of a cyclical recovery and a stabilising rupee currency.

“I see few warning signs for markets, thanks to the government's commitment to contain the fiscal deficit and receding concerns about lower rainfalls in the monsoon period”, he added.

Competition Commission Rejects Complaint Against IRDA
[Posted by: InsuringIndia News on Wednesday, September 17, 2014 12:00 AM]
Competition Commission of India (CCI), the fair trade watchdog in India has rejected that insurance regulator’s rules, which grant of corporate agency licence to banks to sell insurance products, are anti-competitive.

A complaint had filed with the Competition Commission of India alleging that banks in insurance retailing sector were imposing unfair and discriminatory conditions on financed clients to purchase insurance product from them, indulging in predatory pricing, restricting and denying market access to independent insurance agents, among others.

In its order, the commission said, “The issue of abuse of dominance by the insurance regulator does not arise and no case of contravention of the provisions of the (Competition) Act is made out against IRDA and the information is ordered to be closed forthwith.”

The complainant had asked the commission to pass directions to insurance regulator to repeal the regulation.

The commission observed that in the case that IRDA was discharging its regulatory and statutory mandate and did not fall within the purview of Competition norms.

"Regulatory actions are not as such amenable to the jurisdiction of the Commission," the CCI said in the order.

Under the IRDA norm, banks have been granted corporate agency license to operate in insurance retailing.

Exide Life Launches ‘Assured Gain Plus’, A Protection-Cum-Investment Plan
[Posted by: InsuringIndia News on Tuesday, September 16, 2014 12:00 AM]
Private sector insurance player Exide Life Insurance Company has launched a traditional with insurance-cum-investment profits plan, named -Assured Gain Plus, aims at to provide guaranteed returns on investment with life cover.

In a release, Exide Life Insurance Chief Financial Officer Mr. Uco Vegter said, “This is a momentous occasion for us as this our maiden product after we rechristened ourselves with a new identity. We have designed this product based on an inherent need where people are looking at a superior quality of life and securing their future at the same time.”

In May this year, the ING Vysya Life Insurance changed its name to Exide Life insurance after being totally owned by the Raheja Group through leading battery maker Exide Industries.

Exide Life Assured Gain Plus is a perfect investment solution for people looking for attractive tax-free returns with capital guarantee and life cover to ensure the best lives for their families.

Under the plan, the policyholder needs to pay for 5 years only, while the benefits continue for the full policy term. The policy term can be opted from 10, 12 or 15 years.

This plan guarantees a life cover of at least 10-folds the annual premium of the full policy term.

People between the age group of 3 years to 60 years, can have the benefits of this plan.

General Insurance Cos To Work On Insurance Plan For Reactors
[Posted by: InsuringIndia News on Monday, September 15, 2014 12:00 AM]
With a view to solve the liability issue plaguing nuclear reactors, the Government of India has asked General Insurance Companies (GIC) to work on a model that could be applied to insure such facilities in the country.

“This is preliminary work. We have asked GIC to prepare a product that can be used for the nuclear industry,” said a senior government official.

As per the sources, this decision was taken at a meeting between the ministry of finance and the department of atomic energy earlier this month.

The proposed insurance plan would have to look into the capacity of a reactor and the liability and then work out the premium for insuring it.

Mr. Ratan Kumar Sinha, Secretary, Department of Atomic Energy said, “The work is in progress. We are interacting with the Indian industry as well as Indian insurance companies. I am sure there will be a good solution available.”

Under the Civil Liability for Nuclear Damage Act, 2010, the operator, which is the Nuclear Power Cor. of India Ltd (NPCIL), has to pay Rs.1,500 crore to affected parties in case of an accident. However, it can invoke the ‘right to recourse´, which has been objected to by several international players and domestic suppliers.

Under this, NPCIL can seek damages from the suppliers. “This means liability can be fixed on the suppliers. But a nuclear reactor may have several components from different suppliers. In case of an accident in one part, the supplier of another component cannot be held responsible.This has been one of the major grouses of suppliers.

Health Insurance TPA Gets Licence
[Posted by: InsuringIndia News on Friday, September 12, 2014 12:00 AM]
The Health Insurance TPA (third-party administrator) of India which has been set up to settle health insurance claims of state-owned general insurance companies has got necessary license from insurance regulator in India the Insurance Regulatory and Development Authority (IRDA).

A licence is valid for 3 years from the date of issue. Further, it can be renewed for next 3 years, subject to regulatory satisfaction.

The Health Insurance TPA of India would start operations by April 2015. However, external TPAs will continue serving public sector general insurers and that about 50-55 per cent business would be there would remain with them, an official said.

This common TPA will serve claim settlements of National Insurance Company, New India Assurance Company, United Insurance Company, Oriental Insurance Company and General Insurance Corporation of India as stakeholders. The first four insurers have 23.75 per cent stake each and GIC has five per cent.

IRDA Disapproves Shah Rouf's Appointment As Tata AIA Life’s MD & CEO
[Posted by: InsuringIndia News on Thursday, September 11, 2014 12:00 AM]
The insurance watchdog in India Insurance Regulatory and Development Authority has rejected the appointment of Mr. Shah Rauf as Managing Director and Chief Executive Officer of insurance joint venture Tata AIA Life Insurance, citing his accounting and governance failures at Aviva in Romania as the head.

The regulator rejected the appointment after it came to know about his failure. The insurer did not mention it in its filing for approval. However, a Tata AIA Life spokesperson, said "All information pertaining to the appointment was completely disclosed to the regulator."

According to a person close to the development, said that Mr. Rouf 's candidature was rejected after the regulator learnt that the regulator in Romania had barred him from insurance industry on governance and accounting failures.

  It’s a big blow for the already struggling insurer. Despite, overall life insurance industry witnessed 11.56 per cent growth in new business premium for the fiscal year which ended on March 31, 2014, Tata AIA Life registered 22.7 per cent year-on-year drop.

Tata AIA Life brought Mr. Rauf as CEO designate, after Mr. M. Suresh quit the firm as Managing Director and CEO in March. Before this, Mr. Rauf was the Chief Executive Officer of AIA Sri Lanka.

Tata AIA Life Insurance Company is a joint venture between Tata Sons and AIA International. Tata Sons holds 74 per cent stake in the JV, while AIA International holds the rest 26 per cent.

Rash Driving Could Cost You Higher Insurance Premium
[Posted by: InsuringIndia News on Wednesday, September 10, 2014 12:00 AM]
Vehicle owners having habit of rash driving could end up paying higher insurance premium for their vehicles; this is one of the key reforms being incorporated in the new Motor Vehicle & Traffic Safety law.

At present, insurance premium for vehicle is determined on the basis of vehicles only; but now, if the new law is implemented, it will be linked both to vehicle and record of its drivers.

As per the law proposed, over the next 1-2 years, data relating to drivers (whether it’s driven by hired driver or the owner itself) and their offences would be recorded and available online through a centralised database. This will help vehicle owners verifying the credentials of a driver and get his driving record. In addition, it would also help insures determine premium at the time of renewal.

"So, at the time of paying annual premium, the vehicle owner has to pay higher premium for errant driving. It is the responsibility of the owner to employ a good driver," said an official.  The changes in the new Motor Vehicle & Traffic Safety law is mooted because in most of accidents, drivers are found to be responsible and there are numerous examples from different cities where the same driver is found guilty of repeat offences. The proposed law will provide for higher penalty and negative points for repeat offenders. This move could help curbing rash and negligent driving.

Non-Life Insurers Expect 15% Premium Growth In FY 2014-15
[Posted by: InsuringIndia News on Tuesday, September 09, 2014 12:00 AM]
Non-life insurance players in India, despite the continuous slowdown, expecting a growth in gross premium collection in the current fiscal year ending on March 31, 2015. The estimated growth is 15 per cent, 3 per cent higher than the previous fiscal that ended on March 31, 2014.

The industry has witnessed gradual slowdown in previous years due to lower economic growth, reduced car sales, and lower hiring by companies which drive the corporate health insurance business. The non-life insurance sector registered 12 per cent growth in fiscal year 2013-14. In fiscal year 2011-12, it was 23 per cent, and 19 per cent in fiscal year 2012-13.

“The growth momentum is likely to pick up in the second half of this year since the economic slowdown has bottomed out last year,” ICICI Lombard General Insurance MD & CEO Mr Bhargav Dasgupta told reporters.

“I expect the growth of the non-life insurance sector to be around 15% in the current year driven by improvement in economic growth,” he added.

“The non-life sector would grow by 15% in 2014-15 driven purely by health and motor insurance businesses”, a senior official at Oriental Insurance company said.

Leading the non-life insurance sector, the motor insurance business for fiscal year 2013-14, accounted to 46 per cent of total gross premiums. While, the health insurance business contributed 26 per cent, to be the second largest in the non-life segment.

Private sector players saw business growing at a faster rate than for public sector insurers.

AV Birla Group In Talks With Mometum Group For Health Insurance JV
[Posted by: InsuringIndia News on Monday, September 08, 2014 12:00 AM]
Kumar Mangalam Birla-led diversified business conglomerate Aditya Birla Group and South Africa’s third largest insurer Momentum Group, a subsidiary of Momentum Holdings are in talks to form a standalone health insurance joint venture in India.

“We are in discussions with Momentum Group),” Chief Executive for financial services at the Aditya Birla Group, Ajay Srinivasan confirmed the development.

As per the sources, the AV Birla Group would have 74 per cent stake while Momentum will own the remaining 26 per cent, the maximum as per current FDI (foreign direct investment) ceiling.

AV Birla Group is present in the life insurance segment through Birla Sun Life Insurance,a joint venture with Canada's Sun Life. Birla Sun Life sells a range of life insurance products, including unit-linked and traditional products.

Health insurance sector in India is growing very fast. The health insurance business in India accounts to Rs 12,606-crore, about a quarter of the total non-life insurance business. Penetration of the insurance industry has grown at a steady pace since the market was opened for private players in year 2000.

Competition Commission Probes State-Owned General Insurers For Alleged Unfair Business Practices
[Posted by: InsuringIndia News on Saturday, September 06, 2014 12:00 AM]
Competition watchdog, Competition Commission of India (CCI) has initiated a probe against various public sector general insurers and their association, for alleged anti- competitive practices with regard to third-party administrators (TPAs) in health insurance.

CCI recently ordered an investigation by its Director General-Investigation, against public sector general insurance firms-New India Insurance, Oriental Insurance, United India Insurance and National Insurance, as well as their combine, the General Insurers’ (Public Sector) Association of India (GIPSA).

In its probe order, the CCI has alleged that the four state-run general insurance companies dealing in health insurance business were not allowing third-party administrators to function independently and have created in-house TPAs to settle claims.

The conduct in which insurers do not allow TPAs to work independently is against the prevailing worldwide practice to keep TPAs independent from insurance companies, CCI said in its latest newsletter, referring to the order.

The Competition Commission has also alleged that GIPSA, an ad-hoc and unregistered body, was providing a platform to the companies to share sensitive information with each other. This affects competition in the market and also provides space to them for exchanging information regarding claims ratios, marketing efforts and terms and condition of TPAs, among others.

According to an official, the in-house third-party administrator is yet to start its operations, which would take at least one-to-two years. Further, all TPA business will not be transferred to this new company and external TPAs will still be engaged.

Sanlam To Invest $52 Million To Raise Stake In Shriram Insurance
[Posted by: InsuringIndia News on Friday, September 05, 2014 12:00 AM]
South Africa’s insurance giant, Sanlam Ltd considers investing up to 550 million South African Rand (about 52 million US Dollar), to increase its stake 49 per cent in the insurance arm of Shriram Group, one of the India’s largest financial services conglomerates.

Sanlam Chief Executive Johan van Zyl said, “The company, which has a 3.3 billion rand warchest for expansion in its Indian and African operations, is also scouring Ghana and Kenya for possible acquisitions.

"The key is to build our footprint in Africa. In India we have seen some movement toward lifting the foreign direct investment limit of 26 per cent to 49 per cent," he said.

The company has already spent another 1.5 billion rand on expansion since January.

Pradhan Mantri Jan Dhan Yojana: LIC Seeks Clarity On Insurance
[Posted by: InsuringIndia News on Thursday, September 04, 2014 12:00 AM]
The much hyped Pradhan Mantri Jan Dhan Yojna (PMJDY), a financial inclusion scheme launched recently by Prime Minister Narendra Modi, has some modalities to be worked out on the premium payment and claims payment. The state-run insurance firm Life Insurance Corporation (LIC) of India, which will be offering Rs 30,000 protection cover to all those who open zero balance bank account under the financial inclusion scheme by January 26, 2015.

The insurer had a meeting with officials from the ministry of finance to get clarity on the collection of premiums and administration of the scheme.

As per the sources, there have been talks of having a minimal payment for this scheme by the individuals. The process of claim settlement could be done through the Aam Aadmi Bima Yojana (AABY), a social security scheme administered by LIC. AABY members are between 18 years and 59 years. Here, the member should be the head of the family or one earning member of the below poverty line family or marginally above the poverty line under identified vocational group/rural landless household.

The premium to be charged initially under the scheme is Rs 200 a year per member for a cover of Rs 30,000, out of which 50 per cent is subsidised from the Social Security Fund . In case of Rural Landless Household, the remaining 50 per cent premium is borne by the state government or Union territory; in case of other occupational group, the remaining 50 per cent premium is borne by the nodal agency and / or member and / or state government / Union territory.

Along with protection cover of Rs 30,000, PMJDY will also provide personal accident cover of rupees one lac to all individual, for which the National Payments Corporation of India (NPCI) has signed a three-year agreement with private general insurer HDFC Ergo.

Account holders under the scheme would get a RuPay debit card launched by NPCI. Cardholders would also get an overdraft facility of up to Rs 5,000.

Consumer Forum Directed Insurance Firm To Pay Insurance Amount To Farmers
[Posted by: InsuringIndia News on Wednesday, September 03, 2014 12:00 AM]
The Central Mumbai district consumer dispute redressal forum on Monday directed private sector insurance firm Future Generali India Insurance to pay insurance amount of Rs 1 lac each to the families of four farmers who were covered under government-run 'Shetkari Apghat Vima Yojana'.

According to the complainants, four farmers from Raigad - Balaram Rakhade's son, Anant Bait, Ramesh Nawle, and Nagesh Khaire had got enrolled under government-run social security scheme 'Shetkari Apghat Vima Yojana', which provided an insurance cover of Rs1 lac to a farmer's family in case of his death.

As per the complaint, all four farmers died between the period of 2009-2010. All four had accidental deaths, they fulfilled the criteria of the government scheme, and, hence, their families immediately approached their tehsildar's office for the insured amount. But the insurer Future Generali repudiated the claim on the ground that the families did not submit the required documents in the right time frame.

Then, the complainants moved to consumer forum, where the forum, after going through the evidence, said, “The complainant(s) has complied (with) all the formalities as required under agreement and Government Resolution. Thus, the claim is wrongly repudiated by the opponent."

The forum directed the insurer to pay insurance amount of Rs 1 lac each to family with interest at 12 per cent from the date of the death of each farmer. It also asked the insurer to pay an additional amount of Rs3,000 each for the mental agony caused to the complainants.

Reliance Capital, Nippon Life To Jointly Start A Bank In India
[Posted by: InsuringIndia News on Tuesday, September 02, 2014 12:00 AM]
The Anil Ambani-led Reliance Capital has partnered with world’s 2nd largest private life insurer Nippon Life Insurance Group to start a commercial bank in India subject to the necessary approval. The duos, on Monday, also announced two funds for Japanese investors in the Indian equity and bond markets.

This announcement came during Indian Prime Minister Mr. Narendra Modi's visit to Japan, which aims at strengthening bilateral economic ties between the countries.

The two funds - Short Term Indian Bond Fund and India Equity Selection Fund will enable Japanese retail investors to be part of the India’s growth story.

"Reliance Capital is planning to set up its own bank, which will cater to the individual customer and small-and-medium enterprises all over India”, Nippon Life President Mr. Yoshinobu Tsutsui said.

“With a view to improve the financial infrastructure of India, Nippon Life Insurance is participating in this bank project as part of strategic business alliance”, he added.

The Japanese financial services giant Nippon Life holds a 26 per cent, the maximum permissible stake in the Reliance Capital Asset Management Company (RCAM).


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