New guidelines hit ULIP sales

THE recently issued guidelines to regulate the unit linked insurance policies (ULIPs) are expected to slowdown its sales and impact the overall insurance sector’s growth during the current financial year 2010-11, according to Insurance Regulatory and Development Authority (IRDA).

The industry grew at about 23 per cent during the financial year 2009-10.

ULIPs contribute about 80 per cent of the total premium collections made by private insurance firms. According to the data compiled by IRDA, first-year premium income of life insurance companies fell 20.4 per cent on year to `97.09 billion in December, 2010. While private life insurance companies’ collections fell 21.7 per cent, public sector Life Insurance Corporation of India’s collections declined 19.7 per cent.

First year premium collections indicate the quantum of new business generated by hte insurance companies. In September, 2010 the insurance regulator issued guidelines and asked private players to redesign products besides reducing costs.

Another year before insurance cos stabilise: Irda

The growth rate of insurance companies may come down this fiscal and it will take a year before they stabilise, the Insurance Regulatory and Development Authority (Irda) said today. Irda Chairman J Hari Narayan stated this when asked about the impact of new Ulip norms announced by the regulator last year. The new norms came in to affect from September 1, 2010.

He said growth may be affected not only due to the developments within the industry but also overall economy. Insurance companies are of the opinion that certain provisions of new ULIP norms like capping of surrender charges and the even distribution of charges over the lock-in period of five years will adversely impact the profitability of companies. Ulip sales will also be adversely affected as agents may be unwilling to sell products at lower commissions.

Replying to a question, the regulator said the insurance companies expressed concern over norms

on pension products. He said the draft guidelines of IPO norms for life insurance companies will be issued next month and refused to divulge further details.

Govt public debt in Q3 up 4% at Rs 28,62,624cr

The total public debt of the Government increased by 4 per cent to Rs 28,62,624 crore during the third quarter of the current financial year from Rs 27,53,378 crore in the previous quarter.

The Government's debt constitutes both internal and external debt.

While the Government's papers of various maturities period, including the securities issued to international financial institutions, are classified as internal debt, the external debt are that from multilateral and bilateral agencies, including IMF . Internal debt in Q3 constituted 89.6 per cent of public debt, compared to 89.2 per cent at end of the second quarter.

The outstanding internal debt of the Government stood at Rs 25,64,983 crore in Q3, thereby constituting 36.6 per cent of GDP ( Gross Domestic Product )) compared with 35 per cent in the previous quarter.

The report further said all the key deficit indicators of the central Government during April-November 2010, as per centage of budget estimates (BE), were lower than their levels during the corresponding period of the previous year on account of higher revenue collections. On the foreign capital inflows, the report said, the inflows on account of foreign investment were considerably higher during the months of September and October 2010 mainly on account of increase in portfolio investment by FIIs.

The rupee appreciated during the quarter from Rs 44.93 per USD at end-Sep 2010 to Rs 44.81 per USD at end-December 2010, the report said.

AP plans suicide cover, wants MFIs to foot the bill

The Andhra Pradesh government is planning a legislation that would make it mandatory for microfinance companies to pay a compensation of Rs 5 lakh to families of borrowers who commit suicide because of debt burden.
This would raise the liabilities of microfinance companies and compound their problems which they already face in slowing loan repayments after curbs on loans and recovery.

Andhra Pradesh, which accounts for nearly a third of the industry, triggered a debate on how microfinance has to be regulated when it enacted recovery and lending rules last October following suicides and unethical practices by lenders. The Reserve Bank of India appointed a committee under YH Malegam to suggest regulations, whose report was made public last week. The sector is on the verge of collapse due to wilful defaults, which the industry blames on the AP Act.

The state government was under pressure from opposition parties to offer compensation to suicide victims. The latest proposal is expected to help it pass the buck without any pressure on the exchequer, which is already finding it difficult to finance various welfare schemes. 

PRAGYAAN Quiz (PRELIMS) RESULTS & ANSWERS.

Hi Friends,

Congratulations to all the finalists of PRAGYAAN Quiz(PRELIMS) round . Names of the finalists are as follows:

Answers of the quiz:

1) C. TAAL

2) 43 Runs

3) UID- AADHAR

4) SHERA

5) APOLLO MUNICH

6) Dr. UDAYA KUMAR

7) C.AZURE

8) C.D. DESHMUKH

9) SHRI RAM LIFE INSURANCE

10) C.

11) AMITABH BACHCHAN

12) DHONI EFFECT

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14) D. TTK HEALTHCARE

15) DIGITAL VERSATILE DISK

16) B.ASEAN

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18) A. MUNDAKA UPANISHAD

19) THEODORE LEVITT

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24) TOBEY MAGUIRE, SPIDERMAN

25) BUGATTI VEYRON- MANSORY LINEA VINCERO

26) FRANK WILLIAM ABAGNALE, JR.

27) SIDNEY SHELDON

28) VIJAYALAKSHMI PANDIT

29) ROBERT BOB DUDLEY

30) A.HARD



IPO guidelines for life insurers to be ready this fiscal: IRDA

 Insurance watchdog Irda today said the guidelines for public float of life insurance companies will be ready this fiscal, while the non-life may take more time. In October last year, market regulator Sebi had approved life insurance companies to issue IPOs.

As per the draft guideline compiled by Irda, insurance companies that are in operation for the last 10 years would only be eligible for coming out with IPOs.

Also, the present IPO guidelines of Sebi requires a three years track record of profit for a company to float a public issue.

However, the non-life insurance companies will have to wait a few months to hit the capital market as Irda is in the process of making a formal proposal to Sebi.

Several private sector insurers, including Reliance Life and HDFC Standard Life, have already shown interest in tapping the capital market to augment their resource base.

Though HDFC Standard Life has completed 10 years of operations, Reliance Life does not meet this criteria.

As per the disclosure norms in offer document mandated by Sebi, the insurers would have to come up with disclosure of risk factors specific to the companies.

Also the offer document would have a glossary of terms used in the insurance sector.

Currently, most of the 22 private life insurers and 17 non-life players have foreign partners. The Insurance Act caps foreign direct investment at 26 per cent.

Govt plans insurance cover for HIV-infected

India is set to have the first, government-run policy to provide health and life insurance covers for People Living with HIV (PLHIV).Sources in the National Aids Control Organisation (NACO) confirmed that a meeting had been finalised between key stakeholders, including insurance companies, economists and international and national healthcare experts, to work out a sustainable model for the policy.

The meeting, scheduled for February 3 and 4, will see delegates of various countries where successful insurance policies have been implemented for PLHIVs. The aim is for experts to study the models of these countries to arrive at a structure suitable for India.

According to a senior NACO official, though providing insurance cover to PLHIVs was outlined as an important agenda in the ongoing National AIDS Control Programme-3, cohesive action was being taken only now.

“Representatives from South Africa, the US, the Philippines and Namibia have confirmed their participation. The conference will also see a strong representation from the insurance sector. Officials from the Insurance Regulatory and Development Authority will also be present,” the official said.The government is seeking the help of NGO Population Services International (PSI),which has implemented a micro-level insurance programme for HIV-affected persons in high-risk states such as Karnataka, Andhra Pradesh and some districts of Maharashtra. According to Ravi Subbaiah, PSI project in-charge, “Our existing programme only provides for a cover up to Rs 30,000 for patients with CD 4 count up to 300 (CD4 cells or T-helper cells are a type of white blood cells that fight infection and their count indicates the stage of HIV or AIDS in a patient). We are now looking at a pan-Indian project for a much greater premium, with importance on accessibility of services to patients.”

He added that where the PSI programme only provides health insurance, brainstorming sessions with NACO had focused on a complete life insurance cover.

The PSI’s existing initiative ‘Connect’ is supported by the United States Agency for International Development (USAID), and provides patients cashless facilities at hospitals enlisted in the network.

For a premium of Rs 1,511, the patient has to pay Rs 750, and the rest is subsidised by the PSI. Patients can avail of Rs 15,000 on hospitalisation at the onset of AIDS, and the other half for treatment of co-infections associated with AIDS.

Source:

http://www.indianexpress.com