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	Mar 10, 2010 Prudential cant add Tata AIG stake, rules IRDA The insurance regulator told Hindustan Times on Wednesday that if Britain's Prudential Plc's purchase of the Asian operations of bankrupt US-based American International Group (AIG) included the Indian stake in Tata AIG, it would amount to a regulatory violation. That might force a sell-back to the Tatas. J. Harinarayan, chairman of the Insurance Regulatory and Development Authority (IRDA) said the Tata venture will not get special treatment as the same partner cannot hold stakes in two local ventures at the same time. Pru, as Prudential is called, has a thriving life insurance venture with ICICI. However, the question may not arise because the Pru's buyout of the Asian business may not include the Indian operations. The picture is not clear yet. "As far as the Indian regulator is concerned, if AIG's stake is bought out by Prudential, we will not permit it to hold stakes in two companies at the same time. Whatever is the course of action, it has to be decided by AIG, Tata Group and the prospective buyer," Harinarayan said. He confirmed that officials of Tata-AIG Life had met him on Tuesday to apprise him of the developments. + More - Our Bureau
	Mar 10, 2010 India difficult market for foreign insurance cos British insurer Llyod's chairman Lord Levene considers India a "very difficult market" for foreign insurance companies. "India is the one place I would complain about. India is a very, very difficult market," Levene said in an interview to the Financial Times. "It's one of the few places in the world where I blame regulation (for keeping foreign insurance companies out)," the Chairman added. "It would be nice, in 10 years' time if we had 15 per cent in Asia," Levene said. Lloyd's expects moderate growth in Japan, one of its top 10 markets, and China, where it opened an office two years ago. The company has failed even to obtain a licence in India. + More - Our Bureau
	Mar 10, 2010 General insurers face higher liabilities For the first time, global reinsurers have turned their back on primary general insurers in the country by under-subscribing treaty obligations. That means general insurance companies in India will have to absorb liabilities themselves and will require more capital. Highly placed officials said that the under-subscriptions were mostly in marine hull, marine cargo and miscellaneous accidents categories. This business accounts for almost 20 per cent of India's general insurance. Reinsurer under-subscription, the officials said, is largely on account of low risk premiums quoted by domestic general insurers. Since deregulation, the domestic general insurance markets have witnessed steep undercutting of risk premiums, going down by as much as 80 per cent since 2007. + More - Our Bureau
	Mar 10, 2010 External audit of TPAs likely to check delay in settling claims The government may ask third party administrators (TPA) that provide cashless medical insurance service to undergo external audit following complaints of delays in settling claims. “We have received number of complaints over delayed settlement of claims. There is also an issue of one TPA working for more than one insurance firm, leading to delay in processing,” said an official who did not wish to be named. The government opines that audit of TPAs by an external auditor will help to identify the reason for delay and separate the performing companies from non-performing ones. Incidentally, the proportion of claims settled on cashless basis has increased steadily and is about 50% of the total claims handled by TPAs, according to a report by insurance regulator IRDA. + More - Our Bureau
	Mar 10, 2010 Insurance cos popularity depends on customer service Popularity of an insurance firm in India depends more on its customer service as compared to the products it sells, as per a report by advisory firm Grant Thornton. While people do take quality of a product into account while making a purchase, the customer service provided before, during and after the purchase is critical for consumers to choose an insurance firm in the country, says the report. Grant Thornton surveyed 20 life insurance and 16 non-life insurance companies in the country on various parameters. On the product side it considered pricing, cover and other benefits, and judged customer service in terms of waiting time to speak to an agent, the agent’s knowledge of the products besides adherence to commitments made while selling products. + More - Our Bureau
	Mar 10, 2010 SEBI studying responses sent by life insurance cos Capital markets regulator, SEBI has said that it is studying the replies sent by the life insurance companies in response to its show-cause notice on the unit-linked products. “We will consider the replies sent by them. And when we take any action that will be made public….presently, their replies are under our consideration,” said Mr C.B Bhave, Chairman, SEBI, at a press meet held here on Saturday. ULIPs have been a bone of contention between IRDA and SEBI for some time now with the market regulator feeling that they are being pushed by insurance companies more as an investment tool, rather than an insurance, product. The matter is likely to be taken up in the high-level coordination committee to be held this month. + More - Our Bureau
	Mar 10, 2010 LIC Wealth Plus — Plan for debt-related returns Insurance companies have traditionally offered guarantees on their products through bonuses or loyalty additions. But the market correction of 2008 has opened the gateway for “guaranteed NAV” products under unit-linked insurance plans. These plans typically guarantee the investor the highest NAV (the guarantee is not on returns) on the fund in the initial seven to eight years and manage to deliver this through a hybrid structure that uses debt and equity investments. LIC's Wealth Plus is the latest entrant to this genre. It guarantees the highest NAV over the first seven years or the NAV at maturity, whichever is higher. The policy term is eight years; life cover to the investor is available for another two years after completion of this term. This plan has a term of eight years compared with the existing products' 10 years. The plan's mandate allows it to invest between 0 and 100 of its portfolio in debt and equity investments, based on market conditions. + More - Our Bureau
	Mar 10, 2010 Financial Stability Council to be set up by end-April The Indian government will set up by the end of next month the Financial Stability and Development Council (FSDC), an apex body to bring about more co-ordination among various regulators of the financial sector to enhance speedy action, reports the Press Trust of India. The structure of the Council, which was announced by Finance Minister Pranab Mukherjee in his Budget speech on 26 February, will be finalised soon. The panel, which would comprise all the financial regulators including the insurance watchdog, the Insurance and Regulatory Development Authority (IRDA), is expected to be headed by the Finance Minister. Its secretariat is expected to be based in New Delhi. The role of the new council includes giving institutions a heads up on alarming financial trends so that necessary precautionary steps can be taken well in advance. The panel will collect data from all the financial regulators and study them on regular basis to detect trends. + More - Our Bureau
	Mar 6, 2010 Tatas studying AIGs Asia ops sale to Prudential The Tata Group today said it is studying the decision of its insurance partner AIG to sell the Asian operations to British insurance major Prudential. The Tata Group has a joint venture with the now bankrupt American Insurance Group (AIG) for both life as well as non-life insurance businesses, in which AIG holds 26 per cent stake. As per the norms, an insurance player cannot hold stakes in two insurance firms in the country. Therefore, Prudential cannot have stake in Tata AIG Life. However, it is not yet clear whether or not the deal includes the Indian operations of AIG. Yesterday, Prudential snapped up AIA for $35.5 billion in a cash-stock deal. + More - Our Bureau
	Mar 6, 2010 Prudential Undecided on buying AIGs Stake in Tata Life JV U.K. insurer Prudential PLC (PUK) will take a decision in "due course" on whether to acquire American International Group Inc.'s (AIG) 26% stake in an Indian life insurance joint venture with Tata Group, a senior Prudential executive said. "Whether AIG's stake in its joint ventures with Tata would be acquired by Prudential as part of its proposed acquisition of AIA is as yet undecided," Barry Stowe, chief executive of Prudential's Asian business, told Dow Jones Newswires in response to an emailed query. Stowe said the issue of AIG's stake in its Indian insurance ventures will be decided in "due course," adding Prudential "cannot and would not wish to participate in two different joint ventures" in India's life insurance space. "Prudential remains committed to its partnership with ICICI Bank and the ICICI Prudential joint venture in India," Stowe said. A senior executive at Tata AIG Life Insurance Ltd.--AIG's life insurance joint venture with Tata Group--said the company was still studying the deal's impact at the local level. + More - Our Bureau
	Mar 6, 2010 GIC plans to tighten re-insurance norms In order to restrict the undisclosed exposure of non-life insurers, General Insurance Corporation of India (GIC), the national reinsurer, is planning to control the risk reinsured through facultative reinsurance arrangements. “GIC is getting very little share of the facultative reinsurance (fac re) pie. It is mostly done by insurers among themselves and (they) rate the risks inappropriately. In order to avoid low pricing and deductibles, we are going to discourage fac re by insurers,” said a senior GIC executive. GIC’s move will deter companies from opting to price risks cheap through facultative arrangements as they will have to disclose the parameters of the treaty signed to the national reinsurer. Accepting or rejecting the treaty based on the underwriting scope will be at the discretion of GIC. At present, they are offering high discounts to grab the market share. + More - Our Bureau
	Mar 6, 2010 Mixed bag for non-life cos It has been a mixed bag for non-life insurance companies in the budget. While the government has rolled back its decision to tax unrealized gains on investments it has decided to impose withholding tax on all cross border payments. “The appreciation in the value of investments, being in the nature of unrealised gain is not taken into account for determining profit or loss of non-life insurance business as per the IRDA regulations. It is, therefore, proposed that the unrealised gains due to appreciation in the value of investments will not be included in the total income” according to the budget documents. This amendment is proposed to take effect from 1st April, 2011 and will, accordingly, apply in relation to the assessment year 2011-12 and subsequent years. + More - Our Bureau
	Mar 6, 2010 US court orders Mumbai firm to pay Rs 38.5 cr Indian chemical manufacturer Gharda Chemicals has been ordered to pay around Rs 38.50 crore ($8.37 million) as damages by a US court for negligence that caused a fire at the warehouse and offices of Control Solutions Inc, a US-based maker of pesticides and other agro-chemical products, at Pasadena in Houston, the US. The fire was allegedly caused by a chemical product supplied by the Indian company six years ago. Evidence at the trial showed Gharda Chemicals sold Control Solutions contaminated drums of Chlorpyrifos Technical, according to a prepared statement issued after the verdict by the law firm that represented the Houston company that won the damages. Investigations following the fire showed the chemicals were contaminated with a flammable solvent. Shortly before the blaze, 32 drums of Chlorpyrifos were placed in a "hot box" in the Houston company's Pasadena warehouse for melting, based on procedures provided by the manufacturer, the statement said. During the melting process, the contaminated chemicals exploded and caught fire. The panel concluded the fire occurred because the warning or instructions were "inadequate," court documents show. However, Gharda has decided to challenge the verdict of the Harris County jury in Texas, the US, in a higher court. “We will go for an appeal after studying the judgement. We are sure about the quality of our product — Chlorpyrifos Technical, which is used to make pesticides — supplied by us. It's one of the best available in the market,” said a spokeperson of the Rs 1,000 crore company in Mumbai. + More - Our Bureau
	Mar 6, 2010 Insurance cos can sue carrier for deficiency of services: SC The Supreme Court has held that an insurance company and the consignor (assured) can jointly sue a transporter or carrier for compensation towards deficiency of service. A five-judge Constitution bench headed by Chief Justice K G Balakrishnan, ruled the insurance company cannot be precluded from recovering the compensation from carrier as long as the complaint was jointly filed or under the power of attorney granted by the assured (consignor). The bench was constituted in 2000 to examine the nuances of the Consumer Protection Act and the Carriers Act on a special leave petition filed by the carrier Economic Transport Organization challenging the concurrent findings of the district forumer, Dindigul, Tamil Nadu state Consumer Commission and the National Consumer Disputes Redressal Commission(NCDRC). + More - Our Bureau
	Mar 6, 2010 Birla Sun Life Insurance receives BS 25999 Certification Birla Sun Life Insurance Company (BSLI), one of India's leading life insurance companies, has achieved the distinction of being the first and only Indian life insurance firm to receive a BS 25999 certification for its business continuity management system. The certificate has been awarded by British Standard Institute (BSI), a leading certification body for BS25999 certification". Speaking on the occasion, Mayank Bathwal, Chief Financial Officer, Birla Sun Life Insurance said "Business Continuity Management has always been an integral part of BSLI's business strategy towards helping the company meet its strategic, operational, contractual, legal and client commitments. The company has always laid significant emphasis on building these robust processes towards creating an organisation that is equipped to meet customers' long-term financial needs, with us". + More - Our Bureau
	Mar 6, 2010 INTERNATIONAL - AIA deal shifts Asian Landscape Prudential PLC's planned purchase of the Asian life-insurance operations of American International Group Inc. would dramatically alter the industry in Asia, instantly making the British insurer the leading player in a market that has become vital to the future of the global insurance industry. At the same time, the merger could face regulatory concerns in markets such as India or mainland China, where AIA is the only foreign insurer permitted to operate a fully owned entity. Prudential would control a merged entity that would be the largest insurer in at least seven Asian markets, including Hong Kong, Singapore, Malaysia, Indonesia and the Philippines, adding AIG's agency force of 250,000 to Prudential's network of about 420,000 agents in Asia. Prudential's bet would position it to benefit from Asia's growing demand for insurance, as consumers shift savings from cash to insurance and investment products. McKinsey & Co. predicts 40% of the growth in the global life-insurance industry over the next five years will come from Asia, with gross premiums growing to as much as $950 billion by 2012, 50% more than in 2007, according to the consulting firm. + More - Our Bureau
	Mar 6, 2010 INTERNATIONAL - Chile quake claims may reach $8 billion: EQECAT The earthquake in Chile that has claimed at least 723 lives and caused widespread damage will leave insurers with claims of as much as $8 billion, catastrophe modeling company EQECAT Inc. projects. Insured losses from the magnitude 8.8 quake that struck off the coast of Chile on Feb. 27 are likely to amount to around 25% of the economic losses, which EQECAT says are expected to range from $15 billion to $30 billion. + More - Our Bureau
	Mar 1, 2010 Union Budget 2010: Health insurance costs set to go up Health insurance costs are set to soar with the government deciding to impose service tax on payments made by insurance companies to hospitals in settlement of claims where policyholders had received cashless service. Each year the non-life industry pays around Rs 6,000 cr by way of claims to the healthcare sector. Over half of the payments are by way of settlement of claims for cashless treatment. “The proposal to impose service tax on payments made to hospitals under health insurance schemes, which could push up costs for end customers.” Bhargav Dasgupta, MD & CEO, ICICI Lombard GIC. Insurance companies are however hopeful that they will get some offset benefit on account the service tax that is paid on premium collected. “Since the claims are being out of premium that has already been collected. We are hopeful that there will be some offset benefit” said the CEO of non-life insurance company. + More - Our Bureau
	Mar 1, 2010 Union Budget 2010: Hidden gems for policyholders, insurance agents There are hidden gems for policyholders and insurance agents in the union budget. Last year a provision to impose service tax on all charges levied by life insurers on ulip policyholders has been reworked so that service tax is now applied only on fund management charges. Life insurance agents too can rejoice as the government has now raised the limit for exemption from tax deduction at source to Rs 20,000 from Rs 5,000 earlier. Insurers say that agents will have to bring in insurance premium of over Rs 1,00,000 in a year to come under the TDS. Under the revised limit more than half the life insurance agents will be exempt from tax deducted at source. + More - Our Bureau
	Mar 1, 2010 Union Budget 2010: Non-life insurance cos benefit Non-life insurance companies can heave a sigh of relief with the government roling back their decision to tax unrealised gains on their investment “The appreciation in the value of investments, being in the nature of unreal-ized gain is not taken into account for determining profit or loss of non-life insurance business as per the IRDA regulations. It is, therefore, proposed that the unrealized gains due to appreciation in the value of investments will not be included in the total income” according to a the budget documents. However, the budget has also said that since income from unrealized gains is not being reckoned for purpose of taxation, companies cannot claim tax breaks for provision toward depreciation in market value of securities unless they sell the instruments at a loss. + More - Our Bureau
	Mar 1, 2010 Metlife India Insurance on massive branch expansion pan-India MetLife India Insurance plans to aggressively embark on a branch expansion programme and is eyeing a 275-strong network pan-India by end-march, a top company official said. "The insurance market continues to be severely under-penetrated in India and we need to leverage this opportunity. We plan to increase our number of branches from the present 195 to 275 by March 2010," MetLife India Insurance's Managing Director, Rajesh Relan, told reporters here. + More - Our Bureau
	Mar 1, 2010 New India moots cheapest health insurance policy Public sector general insurance company, New India Assurance (NIA), is looking to launch one of the cheapest health insurance policy, with the yearly insurance premium for a minimum Rs 1 lakh sum assured for less than Rs 1,000. “By restricting the choice of the insured, we will see how the premium could be brought down. We can also look at sum insured at more than Rs 1 lakh. We hope to file the application with the regulator in the next one month,” said M Ramadoss, chairman-cum-managing director, New India Assurance. + More - Our Bureau
	Mar 1, 2010 LIC misses REC bus LIC, which had applied for shares worth Rs 3,000 crore in the Rs 4,000-crore Rural Electrification Corporation follow-on public offer (REC FPO), will not be getting any allotment of shares as its bid price is much lower, said an REC official. The French auction route for public offerings essentially operates on the principle of highest bidder wins. In this route, there is no upper limit to the bid price and the highest bidder will secure the largest share of allotment. The official said that LIC had to revise its bid before 5 p.m. on Wednesday which it did not do. “Even on a pro-rata basis LIC will not be allotted any shares,” said the official. + More - Our Bureau
	Mar 1, 2010 Hero Honda takes Rs 8 crore cover for hockey world cup Title sponsor Hero Honda is leaving no room for losses from the Hockey World Cup. The 14-day event, to be held in New Delhi from February 28 to March 13, has been covered for adverse weather and terrorist acts leading to cancellation of the matches. Hero Honda has also taken insurance against the cancellation of the event from Oriental Insurance. The cup has been insured for Rs 7.99 crore. The event is called Hero Honda International Hockey Federation (FIH) World Cup. The world’s top 12 teams, including India, Pakistan, Australia, the Netherlands, Germany, Spain and England, will play a total of 38 matches. The policy also covers postponement or abandonment due to religious mourning, breakout of communicable diseases and natural calamities such as floods. + More - Our Bureau
	Mar 1, 2010 Survey favours introducing catastrophe bonds The Economic Survey 2009-10 has suggested the introduction of catastrophe bonds in the Indian market, to transfer insurance risk arising out of natural calamities such as earthquakes, hurricanes and floods, to the capital markets. Catastrophe bonds (commonly known as Cat bonds) are widely used in advanced countries, and there is scope for introducing it in countries such as India to provide insurance against contingencies, the Survey said. Cat bonds are popular in some of the markets abroad, especially in the United States and Europe. "Cat bonds can be issued by the Government or financial institutions. Investors can get a slightly higher return when compared to other securities and it also offers them an opportunity to diversify their investments. But if the catastrophe is of huge proportions, then investors can lose the capital. + More - Our Bureau
	Mar 1, 2010 Largest life insurer eyes US$38 bln in premiums for FY09/10 The Chairman of India's largest life insurer, the Life Insurance Corporation of India (LIC) has said that the company is on track to meet its target of Rs1.76 trillion (US$38 billion) in premiums for the fiscal year ending 31 March, despite new rules governing unit-linked insurance products that came into effect on 1 January. In an exclusive interview with CNBC-TV18, Mr TS Vijayan, LIC Chairman, said: "We have set a target of Rs176,000 crore (Rs1.76 trillion) for the entire year. We are on path, we have collected nearly Rs130,000 crore till January end. With the new premium also it is quite good, around Rs49,000 crore has come from new premium till January." For the month of January alone, however, the state-owned life insurer posted a 53.5% fall in new premium income at Rs48.4 billion as against Rs104 billion in the corresponding month last year. Sales were affected by the implementation at the start of the year of a cap on overall charges on unit-linked insurance plans. LIC's performance contributed to an overall fall in premium revenue for the country's life insurance sector. The industry reported a fall of 40.28% in sales at Rs77.9 billion last month, compared to Rs130.4 billion for the same month a year ago. However, private life insurance companies witnessed good growth in new income and posted an 11.6% increase to Rs29.5 billion in January. Some of the players like SBI Life and HDFC Standard Life even logged growth in January of 45.4% and 41.7%respectively. "We were fairly nimble footed to the changes that the insurance regulator had prescribed from January. We had trained our sales force and had disseminated information in December," HDFC Standard Life's chief financial officer Vibha Padalkar told the Business Standard. + More - Our Bureau
	Feb 22, 2010 ECGC settles Sasken insurance claim Sasken Communication Technologies Ltd received its credit risk insurance (CRI) claim from the Export Credit Guarantee Corporation of India on Wednesday. CRI provides insurance cover to suppliers against payment defaults from buyers. Sasken is the single largest IT claim settlement for ECGC and the settlement amounted to Rs 6.63 crore. Top ECGC officials said that the claim settlement was for partly compensating Sasken's losses as a result of the bankruptcy of its major customer Nortel Networks. "We received our money today and got almost every thing," said Ms Neeta Revankar, Chief Financial Officer at the Bangalore-based Sasken. The claim was in settlement of Sasken's CRI cover taken in November 2008 to protect its outstanding receivables to the tune of Rs 7.23 crore from the Canadian telecom equipment maker. + More - Our Bureau
	Feb 22, 2010 Max Bupa receives final approval from IRDA Max Bupa Health Insurance Company Limited, the stand-alone health insurance company set-up as a joint venture between Max India Limited and Bupa Group received the R3 license from Insurance Regulatory and Development Association (IRDA) on Monday. Announcing this development, Dr. Damien Marmion, Chief Executive Officer, Max Bupa Health Insurance Company Limited said, "We have received the mandatory clearance from IRDA and are all geared up to launch Max Bupa operations in India. Supported with strong corporate heritage and market leadership of our parent companies across health and service, we are looking forward to making a substantial difference in the Indian health insurance market." + More - Our Bureau
	Feb 22, 2010 TDS haze could raise your health cover cost Health insurance premiums could soar if the forthcoming Budget does not clarify on the issue of tax deduction at source for non-life insurance companies. Insurance companies are in a tizzy after the revenue-hungry income tax department asked for tax deduction at source to be imposed on most of the insurance transactions. This included payments made by insurers to foreign reinsurance companies and also payments made on behalf of insurance companies to hospitals in settlement of 'cashless' claims. According to insurers, since neither hospitals nor reinsurance companies will bear the tax burden, the tax will have to be passed on to the policyholder, er premium. "We are hoping that the Budget will correct these anomalies" said SL Mohan, chief executive of General Insurance Council - the association of life insurance companies. + More - Our Bureau
	Feb 22, 2010 Irda hits back at Sebi on Ulips The Insurance Regulatory and Development Authority (Irda) has said the Securities and Exchange Board of India's (Sebi) notice to insurance companies on unit-linked insurance plans (Ulips) sold by them was "misconceived on conceptual, legal and structural grounds". Irda's letter to the market regulator comes after the latter's showcause notice to insurance companies last month, asking why they had not taken Sebi's approval to sell Ulips. Following the Sebi showcause notice on January 15, life insurers had approached Irda. "While there is an element of market exposure, the insurance component is much higher. The rules are fairly clear and investor interest is clearly protected," said the CEO of one of the largest life insurance companies. For some private players, Ulips account for close to 90 per cent of new business. + More - Our Bureau