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Ensure anti-theft devices to insure vehicles

 Source: Economic Times

Installation of anti-theft devices in motor vehicles and two-wheelers may soon be made mandatory. The General Insurance Council and the transport ministry are jointly working on introduction of a specific rule that will make installation of such devices compulsory for all vehicles, including two-wheelers. This may be made applicable for all vehicle owners, both existing and new.



General Insurance Council is the representative body of non-life insurers, both public and private sector. “Theft is turning out to be a menace for car insurers as well as owners. General insurers lose Rs 1,000 crore every year. As much as 15% of all motor vehicles claims are for theft. Claims paid every year for theft is collected from vehicle owners in the form of increased premium. In the process customers lose. This is a risk-mitigation measure for benefit of owners,” he said.



“We recently made recommendations to the transport ministry in favour of introduction of a rule so that all vehicles including two-wheelers are fitted with anti-theft devices. The ministry has taken up the idea favourably. Currently, we are jointly working with the ministry on introduction of a rule under which all vehicles owners will have to install these devices,” General Insurance Council secretary general K N Bhandari told ET.



“The rule will not require any amendment of the Motor Vehicles Act 1988 and it can be issued in the form of a notification as was done in the case of anti-pollution equipment,” he added.



Speaking to ET, Society of Indian Automobile Manufacturers (Siam) director-general Dilip Chenoy said, “For starters, the government may introduce the rule for two-wheelers from April 2008. Rules for four-wheelers will be issued subsequently.”



Mr Chenoy pointed out that sports utility vehicles (SUV) and popular models of four-wheelers and two-wheelers are frequently stolen. “Siam has joined hands with General Insurance Council to tackle this problem. Siam has also urged car manufacturers to install anti-theft devices to arrest incidents of car theft. For instance, Maruti Suzuki India has started equipping its cars with immobiliser — an anti-theft device. Immobiliser are electronic systems that works on digitally encrypted codes with a car key fob. The car starts only after the codes on the fob matches with the corresponding code on the electronic control unit of the car. Prices of immobilisers vary between Rs 1,000 and Rs 4,300 (ex-showroom, Delhi) for various Maruti models.”



According to National Crime Records Bureau (NCRB) as many as 66,000 two-wheelers and 14,000 cars were stolen in 2005. Highest incidences of theft were reported in Delhi, followed by Mumbai and Bangalore both for two-wheelers and passenger cars.



Additionally, Siam and the council has decided to share data on stolen vehicles. Service centres will also be kept informed on chassis and engine numbers of the stolen cars, so that it becomes easier to track it down whenever it comes to these centres for servicing.



Sources close to the development said automobile associations have been working on the issue of theft of two-wheelers as a specific brand of motor cycles gets stolen and are subsequently exported to Bangladesh and Nepal where its engines are used for generate power.



“Anti-theft devices includes warning equipment like audible alarm, wheel/brake pedal locks, wheel locks, steering wheel locks. Immobilising devices include smart keys, fuse cut-offs, kill switches, starter, ignition and fuel disabler and wireless ignition authentication systems. The latest in terms of technology are computerised tracking systems,” Mr Bhandari said.



“Currently, insurers offer a flat discount of Rs 400 if anti-theft devices are installed. This may rise to about 10% of premiums paid after the general insurance industry is detariffed,” ICICI Lombard head (motor insurance) Eshwar Natarajan said.
 
Ensure anti-theft devices to insure vehicles

Installation of anti-theft devices in motor vehicles and two-wheelers may soon be made mandatory. The General Insurance Council and the transport ministry are jointly working on introduction of a specific rule that will make installation of such devices compulsory for all vehicles, including two-wheelers. This may be made applicable for all vehicle owners, both existing and new.



General Insurance Council is the representative body of non-life insurers, both public and private sector. “Theft is turning out to be a menace for car insurers as well as owners. General insurers lose Rs 1,000 crore every year. As much as 15% of all motor vehicles claims are for theft. Claims paid every year for theft is collected from vehicle owners in the form of increased premium. In the process customers lose. This is a risk-mitigation measure for benefit of owners,” he said.



“We recently made recommendations to the transport ministry in favour of introduction of a rule so that all vehicles including two-wheelers are fitted with anti-theft devices. The ministry has taken up the idea favourably. Currently, we are jointly working with the ministry on introduction of a rule under which all vehicles owners will have to install these devices,” General Insurance Council secretary general K N Bhandari told ET.



“The rule will not require any amendment of the Motor Vehicles Act 1988 and it can be issued in the form of a notification as was done in the case of anti-pollution equipment,” he added.



Speaking to ET, Society of Indian Automobile Manufacturers (Siam) director-general Dilip Chenoy said, “For starters, the government may introduce the rule for two-wheelers from April 2008. Rules for four-wheelers will be issued subsequently.”



Mr Chenoy pointed out that sports utility vehicles (SUV) and popular models of four-wheelers and two-wheelers are frequently stolen. “Siam has joined hands with General Insurance Council to tackle this problem. Siam has also urged car manufacturers to install anti-theft devices to arrest incidents of car theft. For instance, Maruti Suzuki India has started equipping its cars with immobiliser — an anti-theft device. Immobiliser are electronic systems that works on digitally encrypted codes with a car key fob. The car starts only after the codes on the fob matches with the corresponding code on the electronic control unit of the car. Prices of immobilisers vary between Rs 1,000 and Rs 4,300 (ex-showroom, Delhi) for various Maruti models.”



According to National Crime Records Bureau (NCRB) as many as 66,000 two-wheelers and 14,000 cars were stolen in 2005. Highest incidences of theft were reported in Delhi, followed by Mumbai and Bangalore both for two-wheelers and passenger cars.



Additionally, Siam and the council has decided to share data on stolen vehicles. Service centres will also be kept informed on chassis and engine numbers of the stolen cars, so that it becomes easier to track it down whenever it comes to these centres for servicing.



Sources close to the development said automobile associations have been working on the issue of theft of two-wheelers as a specific brand of motor cycles gets stolen and are subsequently exported to Bangladesh and Nepal where its engines are used for generate power.



“Anti-theft devices includes warning equipment like audible alarm, wheel/brake pedal locks, wheel locks, steering wheel locks. Immobilising devices include smart keys, fuse cut-offs, kill switches, starter, ignition and fuel disabler and wireless ignition authentication systems. The latest in terms of technology are computerised tracking systems,” Mr Bhandari said.



“Currently, insurers offer a flat discount of Rs 400 if anti-theft devices are installed. This may rise to about 10% of premiums paid after the general insurance industry is detariffed,” ICICI Lombard head (motor insurance) Eshwar Natarajan said.

source-economics times
 
Centre asks for motor insurance data bank



Don’t be surprised if a local transport official calls on you soon for not buying a mandatory third party insurance cover, reports Financial Express.

It will now be easy for government bodies like the regional transport offices (RTOs) to catch motor insurance defaulters as the Centre is taking an initiative to create a data bank of motor insurance customers.

About 40% of general insurance premium of Rs 20,000 crore come from motor insurance. After some strong lobbying by the industry, the ministry of surface transport has asked departments concerned at the state level to coordinate with general insurers to create a data bank of customers who have bought third party policies.

Speaking to FE, KN Bhandari, secretary general, General Insurance Council, confirmed the ministry had asked states to set up such a data bank. “The idea is to detect those who don’t have motor policies and a list of insurance buyers will be available with RTOs,” he said.

The four state-owned general insurers —New India Assurance, Oriental Insurance, United India Insurance and National Insurance—will be the coordinating bodies for providing data to RTOs. “We are in the process of compiling data from all the domestic general insurers and this will be passed on to the RTOs,” Bhandari said.

Though auto sales are growing at a compounded annual growth rate of 20%, the motor portfolio is not growing that much. But rising claims—pegged at 180%—are eating into their bottom lines.

souces-moneycontrol.com
 
LIC agents will don a new look soon

Source: Business Standard



The agent from India’s largest life insurance company, the Life Insurance Corporation of India (LIC) will soon don a new look as the insurance company is now focusing on changing its government company image from a modern corporate image.



Kannan M, senior divisional manager, LIC, Ahmedabad, told Business Standard Gujarat will soon have about 1,000 Customer Relation Manager (CRM) donned as a corporate executive.



The insurance company is emphasising on changing the image of its agents due to increasing competition from private insurance companies. LIC had observed that the private insurance company’s agents are better equipped with laptops, and provide power point presentations to its prospective customers and are dressed in an executive style.



Now, even LIC agent too will get a makeover. They will be designated — ‘Customer Relation Manager’, instead of the age-old designation of ‘LIC Agent’.



They will storm the insurance market with a better image of the company.



The major focus will on improving the lethargic government image of LIC into a modern and corporate image.



“Last year we had identified 10 people for training as CRM and this year we will have another 110 people trained as CRM,” informs Kannan.



It is a one week training provided by the LIC at its Pune facility. “We are in process of conducting interview and selecting another 1,000 people that will be designated as CRM,” said Kannan. The customer relation manager will also be provided with premium collection electronic device.
 
Don't take this risk with insurance

Insurance is a risk cover – don’t risk the nomination part



Most people name their beneficiaries when they buy the policy, and then never give the subject another thought. That could be a mistake. Good consultants recommend that you take the time to review your policies' beneficiary designations periodically (annually or whenever there is a birth, death, graduation, divorce, etc.) and make sure they reflect your current needs, goals and circumstances.

Here are some things to consider: In India in most forms, you can name the nominee and mention the designation.



Indicating individuals by name

”Padmini, my wife, whose date of birth is 12 July 1977 and the address is Plot 12, street 14, Guntur, and my children Ram, and Suresh”. The advantages of such phraseology are that it is simple, clear, and leaves no room for misunderstanding about whom you wish to nominate and give the monies to.



However, like all simple things, it has some problems. One, it is rigid. If you identify your current children by name, and then have a third child later, that child will not share in the policy. Unless you revise your beneficiary designations, this youngest child will not share in the life insurance proceeds.



Also, if a named beneficiary dies before you, the beneficiary’s heirs may be cut off from receiving proceeds. Take a case where all your three children are married, and have children. In case one of your children should pass before you, the spouse and kids of that child of yours will receive nothing.



So if you have a married child, ensure that the beneficiary designation is now changed to reflect his spouse, kids by name and designation. “Mr Suresh, my son, his spouse Mrs Lalitha Suresh and their daughter Ms Anuradha.” This has more clarity than saying only “Mr Suresh”


Naming beneficiaries by the class or group

While making a will, you can use better language that will ensure omitting unintended beneficiaries by name. If beneficiaries are designated to be "all children of the insured," future children will automatically be included.



This can also be arranged so that proceeds are distributed as either per capita (based on a portion for each individual) or as a percentage per person.



Provided beneficiary designations are clearly identified, this maybe the simplest, most effective method for naming beneficiaries.



However, there can be disadvantages. Things can become complicated if you have a complicated marriage. If you and your spouse have more than one marriage and children form both the marriages, you might have to be far more careful while naming the beneficiaries.
 
IRDA to look into fee system of insurers

Source: EconomicTimes 29Sep2007

The Insurance Regulatory Development Authority (IRDA) has decided to conduct a detailed examination of remuneration, expenses reimbursement systems and incentive schemes adopted by insurers for corporate agents, micro-insurance agents, bancassurance channels and referral modes, to ascertain if they are in conformity with provisions of the Insurance Act.

It will also examine the existing commission structure for alternate channels, additional payments made to intermediaries and their justification levels and fairness. If required, IRDA may modify the present structure.

“Some practices that have crept into this system requires a detailed examination to ascertain whether they are in conformity with the provisions of the Insurance Acts and their impact of acquisition cost,” IRDA chairman CS Rao said.

“We have also decided to review the system of payouts made to distribution channels and the administrator of group businesses. IRDA will also consider any other relevant aspects to rationalise payments made to agents, corporate agents, micro-insurance agents and referral providers,” said Mr Rao.

The regulator has further decided to review the licensing system for corporate agents and may subsequently suggest a revised criteria for their selection. Additionally, it will consider advisability of permitting several corporate agencies within the same group and the current practice of insurance companies also acting as its corporate agents.

“In a bid to increase penetration of insurance, the regulator has enlarged the scope of intermediaries structures. We have allowed introduction of a number of alternate channels including the on-line mode for selling insurance.

These systems have been in place for some time now while some of these are in vogue for the last eight years. IRDA has now decided to find out the effectiveness of these alternate channels as it is time to take a close look and suggest any modifications if required,” Mr Rao said, when asked about the rationale of conducting the study.

“The Authority feels that there is a need to study and ascertain the manner in which these channels have been functioning, their efficacy, their cost effectiveness, their weaknesses and also make recommendations on the changes required to make them effective, professional and accountable and serve the interests of the insured and facilitate provision of services all over the country in a cost-effective manner even for low-priced insurance,” Mr Rao said.

Interestingly, IRDA has decided to set up a 10-member committee with representatives from the insurance industry to look into these aspects. The panel will be headed by former LIC chairman NM Govardhan. The terms of reference includes examining requirement for a system of referral providers and norms in force.

This committee will look into the scope of direct marketing, e-marketing, web-enabled sales points and other innovations and recommend terms and conditions for each mode of direct marketing, including the remuneration structure.

Examination of the scope of existing micro-insurance agency system and its remuneration, modifications if required and enlargement if necessary, also includes part of terms of reference of the committee.

-- MauLiN
 
Insurance offshoring business to touch $1b by 2010

source:economic times

KOLKATA: Revenues from offshore insurance business process outsourcing (BPO) services in India are slated to touch $2 billion while the employee base of insurance BPO firms is expected to exceed one lakh by calendar 2010, notes a recent KPMG publication.

“The sector currently has 41,600 people on its payrolls and generates an estimated revenue of $790 million,” KPMG global head of sourcing advisory Pradeep Udhas told ET.

Traditionally, insurance companies have been among the slowest to adopt outsourcing/offshoring . But in the past few years, market dynamics have changed as a result of shrinking margins, higher claims disbursement and increasing competition, especially since September 11, 2001. India is likely to be one of the major beneficiaries.

According to the KPMG publication, christened ‘Frontiers in finance: Financial services for decision makers in financial services’ , a large number of Indian vendors are expected to evolve into mature , end-to-end service providers, competing with multinational outsourcing companies by 2010.

Currently, players like Aviva, Prudential Inc and AXA are among the larger players operating in India. “However, players like Genpact, WNS and EXL Services, as well as BPO offshoots of IT companies such as IBM, TCS, Infosys (Progeon) and Wipro are expected to emerge as competitive global players in the segment,” KPMG India executive director Sanjay Aggarwal said.

As insurance services mature and more highend processes like analytics, actuarial and underwriting services move to India, the BPO industry is expected to grow further, the study suggests. “Another growth area is claims and policy administration. Providers include large, mid-size and small service companies. The larger BPO companies are likely to continue dominating the landscape in the next two to three years,” said Mr Aggarwal.

The size of the US insurance industry, with over 1,500 property and casualty insurance companies and 1,300 health cover entities in the US alone, makes insurance outsourcing an attractive market.

To cash in on the growth potential, several niche providers with relevant expertise are investing and encouraging insurance companies to outsource more value-added services. Some of the key drivers of insurance offshoring are stringent insurance regulation and statutory documentation in the US along with deregulation of insurance markets in America.
 
Insurance licence only if banks qualify for Basel II

source: economic times

HYDERABAD: Banks planning to venture into the insurance sector will be given licences only if they establish that they have adequate resources to meet the Basel II capital requirements, to be implemented from 2008. The IRDA has decided to make this mandatory for banks applying for insurance licences.

“Any bank’s application for an insurance venture will be considered only if they are able to first show that they have enough funds to meet the Basel II norms. This will be the first priority, before they explain how they would inject funds for their insurance business,” said CS Rao, chairman IRDA. Earlier this year, the Reserve Bank of India too had reportedly asked banks seeking to enter into the insurance business to explain how they would organise capital to meet Basel II norms and for the insurance venture.

Basel II is the new international framework on capital adequacy norms for banks. The new norms require most banks to set aside more capital for the present level of business. Earlier, RBI had decided to ask banks with sizeable international business to adopt the Basel II framework in March 2008, a year earlier than others. Now, banks with insurance ambitions will have to prepare themselves early.

Over the past one year or so, nearly five joint ventures have been signed between Indian banks and foreign insurers, involving ten Indian banks. The existing regulations allow a foreign partner to hold up to 26% equity stake in the venture. Banks that are planning to have an insurance arm include Canara Bank and OBC with HSBC. Mumbai-based Bank of India and Union Bank have recently entered into an agreement for a life venture with Dai Ichi of Japan.

From the public sector, Bank of Baroda and Andhra Bank have entered into an agreement with Legal & General of UK to set up a life insurance company. Punjab National Bank and Vijaya Bank are also looking at a life venture with Principal Financial of the US.

With the JV agreements and business plans in place, quite a few banks are preparing their applications for an insurance licence. If all the banks are required to be ready for Basel II early, they would have to retain more profits or raise fresh capital to prevent their CAR from dropping. Although, the minimum capital requirement for an insurance venture is Rs 100 crore. The experience of existing players has shown that investments can run up to over Rs 500 crore before break-even comes within sight.

The banking sector, according to one estimate, will need around Rs 50,000 crore to meet the Basel II norms. The huge capital requirement is being cited as one of the major reasons for ICICI bank to float a holding company. The bank’s insurance and mutual fund business will be transferred to a wholly-owned company, ICICI Financial Services. It subsequently plans to divest 24% in ICICI financial services to foreign investors.

But the proposal is now stuck with the Foreign Investment Promotion Board (FIPB), despite the IRDA giving its nod to the proposal. The SBI too has plans to set up a holding company to transfer its shareholding in its insurance and asset management subsidiaries. It also plans to list the holding company in order to meet the capital requirements of the insurance and AMC business.
 
Young, rushed and no time to invest? Experts advise

Source : Moneycontrol.com

Are you a professional who works hard to earn your money, but sometimes are confused about your investments?

Three of the most eminent people from the world of management today have got together to advice people like you. Puneet Nanda, Chief Investment Officer at ICICI Prudential Life Insurance, Raamdeo Agrawal, Managing Director of Motilal Oswal Securities, but better known as one of the Wizards of Dalal Street, and N Sethuram Iyer, Chief Investment Officer, Shinsei Invest India.

In conversation with Puneet Nanda, Raamdeo Agrawal and N Sethuram Iyer:

Q: Professionals, who have got their own line of working life, are not necessarily salaried employees, which means more money, but also means lesser amount of time available to them. For this category of people, what should be the investment strategy, should that be any different or should it be long-term wealth building just like it would be for anyone else?

Puneet Nanda: It is very important for anyone of them to plan for uncertainties that can happen in life, it could do with life, it could do with health. Hence, it will be very important for them to not only invest in a disciplined way regularly in order to save for their retirement, but also to take care of their own life and their dependants.

Raamdeo Agarwal: One of the things that goes with professionals is that their tax rates are very high, so whatever they save must be planned in such a way as to be able to reduce the tax rate.

They can use the power of compounding and the tax break, which long-term investing gives them. That should be used very judiciously by them, because in their own profession they do not have tax savings and if their investments are unplanned, the tax rate might be very high. So that is one aspect very unique to professionals. That must be kept in mind while planning for a longer term investing for their savings.

Q: You have just joined the new avatar, you have built a lot of successful funds when you were at SBI Mutual Fund. Have the rules remained the same even in these volatile times? That is important from a point of view of a professional as Raamdeo said, who do not necessarily have the time to put your money in periodically, systematically as Puneet just mentioned?

N Sethuram Iyer: Yes, the rules are basically the same. Today you must understand one thing that opportunities for investments are huge. You have so many more revenues, which have opened up for investments. For example, today one can invest into global equity markets, which was just not available to Indian investors, maybe a year back it was not available at all. So the opportunities are huge and I do not think individuals have the capability of gaining that much expertise to invest gainfully into each of these opportunities. So one absolutely requires professional support when it comes to investments and that is where the mutual funds come in.
 
Gunning for cover

If you have a raging romance with Walther P99s, Beretta AR-70 /90s, Smith & Wesson .357s and the likes, go ahead and take aim. But before you get trigger-happy, spare a thought — does your prized possession have an appropriate cover?

For those not in the know, gun insurance is a policy which takes care of not only your guns, air pistols and other firearms but also provides protection against other liabilities arising due to some mishap with the weapon. Today, all public sector insurance companies such as Oriental Insurance, New India Assurance and National Insurance have this policy in their portfolio.

Gun Insurance is very popular in the West considering that the rules to posses a firearm there are more lenient when compared to India. However, it holds the same significance across the globe. “This policy is one of the oldest and is part of the portfolio of public sector general insurance companies since 1972 when General Insurance Business (Nationalisation) Act (GIBNA) was enacted,” says an official of New India Assurance.

The policy not only cover the risks such as the cost of the gun and accessories, but it also provides protection in case of legal liability of the insured arising out of the use of the gun for personal injury or damage to a third party. “Currently, only motor insurance is mandatory in India. A rationale approach on the government part would be to make this policy compulsory for those buying gun or pistol for their personal use. It would take care of third party liability, damages, if any, to the property due to accidental firing as well as safety issues,” says a National Insurance official. The company till date has issued the policy to only a few individuals and some corporate groups. “Generally, we get enquiries from bankers or jewellers,” he adds.

A gun insurance policy has various facets to it. The policy provides cover against the risks of fire, burglary, house-breaking, theft or any accident or misfortune within the Indian sub-continent, besides the legal liability for third party property damage or third party personal injury up to Rs 50,000 for any one accident or any one year of insurance. This limit can be increased up to Rs 1 lakh on payment of additional premium.

“Unfortunately, the awareness about the product is low and that’s why this policy hasn’t really picked up. It is an important policy — especially for safety purposes. In India, we have seen number of cases where accidental firing has led to huge damages,” says an Oriental insurance official.

Almost all the companies charge the premium amount at around 4% to 5% of the sum insured. “The policy is also available with some private sector insurance companies. This is not offered on a standalone basis but can be clubbed with your house insurance policy. They charge around 10% of the sum insured as a premium for one year,” says Ashish Kapur, CEO, Invest Shoppe.

If you want to apply for a gun insurance cover, furnishing the required documents such as licence copy, permit copy and cash memo along with duly-filled proposal form can make the task easier. When filing for claims, having documents such as a copy of FIR (first information report) in case of an accident or burglary and other policy details can expedite the process.

However, taking a gun insurance policy doesn’t mean that you’ve got the infamous ‘licence to kill’. The policy is held nullified if the insured person has committed an act for intentional damage or under the influence of alcohol or drugs. Consequential loss, depreciation or contractual liability also don’t fall under the gambit of the gun insurance policy. Loss or damage while cleaning or repairing is also excluded.

So, if you haven’t yet insured your prized possession, it’s time to go ahead and do it. After all, it is ideas which pull the trigger; instincts only load the gun.
 
Common man's insurance scheme launched

SHIMLA: The common man's insurance, dubbed "Aam Aadmi Bima Yojana", was formally launched in Shimla on Tuesday by Finance Minister P. Chidambaram.

"'Aam Aadmi Bima Yojana' is a social security scheme which shall cover head of the family or one earning member in a family in rural landless households, who should be aged between 18 and 59," said Chidambaram.

"This scheme provides a cover of Rs.30,000 to members. It also provides a cover of Rs.75,000 on death due to accident or permanent total disability due to accident. There is also a cover of Rs.37,500 for partial disability due to accident," he added.

Chidambaram said annual premium for the scheme would be Rs.200. The central government will subsidise half of the amount from a fund created for this purpose and respective state governments would contribute the remaining.

The scheme will have a simple claim procedure. The beneficiary will just be required to furnish the original death certificate and identity card issued by Life Insurance Corp (LIC) of India.

An added feature of the scheme is that it would provide a scholarship of Rs.300 every three months to two children studying between 9th to 12th classes, LIC officials said.

"Himachal Pradesh has become the first state to adopt the common man's insurance scheme," said LIC chairman T.S. Vijayan.
 
Health insurance scheme for BPL families launched

NEW DELHI: The government on Monday formally launched a health insurance scheme for families in the unorganised sector living Below Poverty Line (BPL).

Announcing the launch of the Rashtriya Swasthya Bima Yojana, Finance Minister P Chidambaram and Labour Minister Oscar Fernandes said at a press conference that all the 30 crore BPL families would be covered in the next five years.

They said the Centre would contribute 75 per cent of the annual premium and the rest would be borne by the state governments.

The beneficiary family, with up to five members, would be issued Smart Cards and the total sum insured would be Rs 30,000 per family per annum.

The cashless transaction would cover all pre-existing diseases and hospitalisation expenses, taking care of most of the illnesses. Transportation cost of Rs 100 per visit would be met with an overall limit of Rs 1,000 per annum, as per the highlights of the scheme.

Replying to a question, Chidambaram said Rs 751.50 crore would be spent on covering 1.2 crore families in 2008-09.

The launch of the scheme on the eve of Gandhi Jayanti fulfils the promise made by Prime Minister Manmohan Singh in his Independence Day address and it is in consonance with the commitment made in the National Common Minimum Programme.

The Prime Minister had announced from the ramparts of the Red Fort on August 15, "We are working on a health insurance model so that our poor do not have to bear the high cost of medical care".
 
New India Insurance Company officials arrested for corruption


JABALPUR: Three officials of New India Insurance Company were arrested by the CBI on corruption charges.

According to CBI Superintendent R Raju, the company's divisional manager Kuntal Chakraborty and branch manager Anand Bihari Jha demanded money from one Sanjay Sharma to settle his claim.

However, when Sharma complained against them to the insurance company, its vigilance officer R K Dixit exerted pressure on him to withdraw the complaint following which he approached the CBI.

The trio was arrested after the complainant reached the company's office along with the documents for compromise in the case.
 
SBI Life launches group insurance scheme

BANGALORE: SBI Life Insurance (SBI Life) announced the launch of its Super Suraksha Group Insurance Scheme for deposit account holders of the State Bank of Mysore (SBM) on Friday.

Under this scheme, SBI Life will provide life insurance protection to SBM's MYBANK SURAKSHANA deposit holders.

Talking to the press, U S Roy MD and CEO, SBI Life said, "The innovative product introduction is a demonstration of 'Integrated Bancassurance' approach adopted by SBI Life. This is a step towards developing Life Insurance solutions complimenting banking products enabling ease of sales to our business partners and convenience to customers".

Speaking on the occasion, P P Pattanayak, Managing Director, State Bank of Mysore, said, "The unique product initiative is a value addition to our customers in the form of free protection. In case of any unforeseen circumstances our depositor's nominee will not only receive the fixed deposit amount but also receive the Sum Assured amount under this scheme".

All individual depositors within the age 18-55 years are eligible for "MYBANK SURAKSHANA".
 
Medical insurance policies may cover pre-existing diseases

KOLKATA: Medical insurance policyholders can now rejoice. Insurance companies are reviewing claims settlement norms in case of pre-existing diseases. This means, insurers may soon no longer deprive mediclaim holders of claims under the clause of “non-disclosure of diseases”.

Accordingly, policyholders who never underwent treatment nor showed symptoms of a disease before signing a policy document are likely to get the medical policy benefits in future.

At present, insurance companies often decline to settle insurance claims in case policyholders are diagnosed with having contracted the disease prior to the signing the mediclaim policy.

This is likely to change. The General Insurance Council of India — an association of non-life insurers — in consultation with all insurance players, is working on the appropriate definition of pre-existing diseases.

“Policyholders who did not undergo any diagnosis or treatment or show indications of a disease prior to the signing of a contract should not be considered in the know of having any pre-existing disease,” said BD Banerjee, a member of the committee formed by Insurance Regulatory and Development Authority (IRDA) to examine issues related to health insurance for senior citizens.

The insurance regulator formed the committee in May this year in the wake of a over 200% hike in premium for medical insurance policies after September 2006. The insurers increased the premium for senior citizens ignoring the regulator’s advice not to hike it more than 70%.

Mr Banerjee said, “Most private insurers turn down health policies to people aged above 60. Among the public sector insurers, only Oriental Insurance, as of now, does not offer health insurance policies to senior citizens. It has, however, applied for a policy for senior citizens to IRDA.”

Issues relating to health insurance for the elderly need special focus, as they are more vulnerable and fall in a higher risk category.
 
Good health is Shobana Kamineni's priority

There are high expectations from Apollo DKV Health Insurance, the joint venture between the Apollo group and DKV — a group company of the German reinsurance giant Munich Re. The public interest in Apollo DKV’s health products is second only to the interest in LIC’s products though IRDA is yet to give its nod for the products to be launched by either of them.

However, Apollo DKV has a three-fold advantage over other general insurers. Firstly, it is promoted by the Apollo group that has decades of experience in understanding healthcare costs and the incidence of various ailments among Indians. Secondly, its joint venture partner Munich Re also has a wealth of data on health insurance across the world. Thirdly, the company would have access to the experience of other health insurance products as well since Munich Re is a stake-holder in Paramount Healthcare Services — one of the largest and oldest third-party administrators in the country.

From the Apollo, which holds 74%, the venture is driven by Shobana Kamineni. Ms Kamineni is the third of Dr Reddy’s daughters and also first among her siblings to join her father in the family business. The vice-chairman of the Apollo Group of Hospitals, she has over two decades of experience in the health care industry. Top on her agenda now is to ensure the success of the Apollo-DKV insurance venture, the second standalone health insurance in India. Ms Kamineni hopes to fight competition as she reckons that the group is better placed to understand the dynamics of medical insurance claims.

But those looking for cheap health insurance from the country’s largest corporate healthcare provider are likely to be disappointed. Ms Kamineni has made it clear that pricing will be on par with other players. Where she plans to make a difference is by introducing more value added service in the health insurance product and giving true ‘value for money’ for buyers.

Her employees say she is passionate about her work that rubs on them as well. But she is a hard task-master. She’s upbeat on the venture and hopes to have a market share of at least 10-12% over the next five to seven years. As director of new initiatives, Ms Kamineni is currently involved with pharmaceutical retailing — 500 pharmacies, SCM Clinical Trials, Research, apart from the Apollo DKV Health Insurance Venture. Ms Kamineni is also vice-chairperson of the KEI group, promoted by her industrialist husband Anil Kamineni.

KEI is involved with developing leisure facilities and theme parks (TRAC India), port management services (KEI_RSOS), power projects (KEI Energy and Apollo Energy) Pharma GPO and Exchange. An active member of industry associations, Ms Kamineni was the chairman of CII (Souther Region). An avid sportsperson, Ms Kamineni was a national level Squash player. Her other interests include social development for women. She is also involved with restoration of her father’s fort and temple. Kamineni is not so much a Page 3 person, but has no qualms about one of her daughters featuring regularly in those columns.
 
Insurance policies discounting rebate cap to face recall

NEW DELHI: The General Insurance Council (GIC), a self-regulatory organisation of the general insurance industry, and the insurance regulator have said the policies that have not complied with the limits on discounts offered may have to be recalled. While the insurance regulator had stipulated caps on discounts that could be made available to consumers, insurance companies offered much higher discounts than those prescribed. It is not clear, industry sources said, how policies that have been issued can be recalled.

At a GIC meeting earlier this month, it is understood that all CEOs agreed to comply with the guidelines with immediate effect. “All such cases where we have allowed higher discounts, we may need to recall our quotes as instructed by the Irda officials in the aforesaid meeting,” a letter from an underwriting head at an insurance company to the marketing department stated.

After slashing premium by as much as 70% over the original rates in the free-pricing regime that kicked off earlier this year, insurers have now been instructed by the Insurance Regulatory & Development Authority (Irda) to abide by the caps on discounts specified by it. Pending approval from Irda for revised rates for new policies, all firms have been advised not to allow discounts in excess of 51.25% in respect of individually-rated risks and 43.25% in respect of class-rated risks as per guidelines.

“GIC is a self-regulatory organisation though it has representation from Irda. While there is no communiqué from Irda to the industry at this stage, the guidelines issued earlier in the year on capping discounts stands,” Irda chairman C S Rao said.

GIC secretary-general K N Bhandari said, “There have been complaints about the violation of Irda-prescribed caps on discounts. At a meeting earlier this month, insurance companies said Irda-prescribed guidelines will be complied with. While it is not mandatory for companies to recall quotes where higher discounts were stated, they are free to do so.”

Violations on the prescribed cap on discounts have been witnessed in large accounts while insuring industrial risks since the groups could have considerable bargaining power and can shop for the lowest premium, a source said.

Prudent Insurance Brokers V-P Pavanjit Singh Dhingra said, “Driven by the fear that prices lower than those mandated by Irda may not be processed, customers are now insisting they should not be offered discounts more than the prescribed limits imposed by the regulator. Customers are getting cautious and are willing to pay the right amount to ensure that all risks are covered.”

On January 1, general insurers were given the freedom to price their policies. In a bid to control a price war in the market, Irda had capped the discounts that insurers could offer policyholders in the free-pricing regime, reducing chances of undercutting. A six-month lock-in period was brought in to prevent companies from changing premium rates frequently. Irda monitors every insurance company once in two months.

If companies do not follow prudent underwriting standards, they run the risk of falling short of solvency margin requirements. Already, the regulator is keeping tabs on underwriting practices of companies before allowing them complete free-pricing in April 2008 — when they will be allowed greater leeway in product innovation, apart from competing on price. The general insurance industry is pegged at Rs 22,000 crore.
 
Now, roadside services from motor insurers


MUMBAI: Insurance companies will soon be able to offer value-added services such as roadside assistance to motor insurance policyholders. Spain’s Mapfre Group, which provides infrastructure support to insurers providing motor assist programmes worldwide, is setting up shop in India.

Mapfre is seeing a big opportunity in India after insurers get complete freedom to design insurance policies from April ‘09. At present, insurers cannot provide wider than the standard motor insurance cover although they are free to set prices. “We are in advanced stages of talks with various insurers and corporates, and will be announcing our partnerships within the next two weeks,” said Mapfre Asistencia chairman Rafael Senen Garcia.

Globally, the firm has tie-ups with insurance firms like Allianz, AIG, AXA, Royal & Sunalliance and Genrali, all of which have non-life insurance operations in India.

At present, Mapfre Asistencia is present in the country in the form of a fully-owned subsidiary — India Assistance. “We have already developed a network of more than 1,000 service points in 36 major cities,” remarked India Assistance general manager Jose Luis Ortiz Castello.

The company has invested $3 million to set up its operations here.

India Assistance will launch itself with roadside assistance services, under which they will provide services for any kind of breakdown or accident. Customers need to dial the call centre numbers and report the problem, following which a suitable vendor will be notified and sent to the spot, to either fix it or to tow the car away. In case of a serious problem, the company will even provide the customer with a replacement car.

The company will take care of all the relevant processes while the claims will be taken care of by the concerned insurer, Mr Garcia explained.

India Assistance aims to tie up with more than 3,000 service providers for its roadside assistance services. The company will offer these services to insurers, who have the option of coupling it with their motor-insurance products as a value add. The services will also be offered to other corporates who wish to offer it to their employees as well as automobile companies.

“As we are entering the detariffed and deregulated environment, insurance companies will be able to offer more value adds to their customers, apart from a wider range of cover,” added Mr Garcia. According to him, such services will enable the insurer to stay in touch with the client on a more regular basis while the customer will profit from round-the-clock assistance.

Though Mr Garcia made it clear that Mapfre had no plans of entering India as an insurer just yet, he did not rule out the possibility of setting up shop here at a later date. “Mapfre has always worked as a majority partner, and the regulatory environments in India does not help much,” he said.
 
Petrol pumps, malls may sell insurance too


KOLKATA: Your neighbourhood petrol pumps, vehicle pollution control centres and hyper marts may soon sell motor insurance, simple travel covers and even householder policies. Until now, these were specifically sold by licenced agents and brokers.

The Govardhan Committee, which was formed by Insurance Regulatory & Development Authority (IRDA) to review the functioning of various insurance channels, is in the process of recommending liberalised selling of simple non-life insurance covers that have achieved low penetration levels till now.

That means more channels will be made available to the general public for buying simple, easy to understand covers. And what could be a better place than your local petrol station to buy car covers or a hypermart to buy a householders policy, or for that matter, a your nearby travel agency to buy travel covers.

"The industry has achieved barely 20% penetration even for mandatory covers like liability motor-vehicle covers, not to speak of insurance products like householder policy, travel insurance or simple health insurance covers. It calls for inclusion of more channels for increasing sale and penetration of insurance," an industry official said.

The Govardhan Committee is likely to submit its report towards the beginning of 2008 and has decided to encourage more stakeholders to participate in selling small-sized and simple policies. The committee has already prepared its draft recommendations and is finetuning these in consultation with various stakeholders.

"In a bid to increase penetration of insurance, the regulator has enlarged the scope of intermediary structures and has allowed introduction of a number of alternate channels, including the online mode, for selling insurance. These systems have been in place for some time now. IRDA has decided to find out the effectiveness of these alternate channels and suggest any modifications if required," an IRDA official said.

"The authority feels there is a need to study and ascertain the manner in which these channels have been functioning, their efficacy, their cost effectiveness, their weaknesses and make recommendations on the changes required to make them effective and facilitate provision of services all over the country in a cost effective manner, even for low-priced insurance," he said.
 
Insurance sector to touch Rs 2,00,000 cr by 2010: Assocham


NEW DELHI: Riding on the back of new players and increasing penetration, the insurance sector is expected to cross the Rs 2,00,000 crore mark in business by 2010, a study by industry body Assocham said on Monday.

At present, size of the insurance sector is estimated at Rs 50,000 crore, which has seen a Compound Annual Growth Rate (CAGR) of around 175 per cent in the last few years, the study named 'Insurance in Next Two Years' stated.

The insurance sector, both life and non-life, is likely to grow by over 200 per cent, and private insurers are expected to achieve a growth rate of 140 per cent as a result of aggressive marketing technique, it said.

The growth of state-owned insurance companies is likely to be 35-40 per cent.

"On account of intense marketing strategies adopted by private insurance players, the market share of state-owned insurance companies like GIC, LIC and others has come down to 70 per cent in last 4-5 years from over 97 per cent," Assocham President Venugopal Dhoot said.

The study said private insurance companies would further adopt aggressive marketing techniques. Despite regulation, the private players are offering 35 per cent rate of return to its policy holders against 20 per cent by public-sector insurers.

This factor is mainly responsible for a hike in private insurance market share that will grow further, it said.
 
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