Reduce tariff barriers, FDI curbs to fix infrastructure: Gary Locke

India must reduce its tariff and non-tariff barriers and consider lifting restrictions on foreign direct investment (FDI) in several areas to help it secure funds to help fix its infrastructure, U.S. Commerce Secretary Gary Locke said here on Friday. Addressing a media roundtable here, Mr. Locke said that allowing more FDI in sectors like infrastructure, banking and insurance and even the retail sector would greatly help these sectors get access to more funds and lower their costs. “Only 2 per cent of the roads are paved in India. It is estimated that India requires up to $1.2 trillion between now and 2030 to repair and upgrade its infrastructure which involves an eight-fold increase in per capita spending. That is clearly beyond the capability of India and that is where FDI will help.''

Although India has made progress in opening its markets to U.S. companies, a lot more remains to be done in this direction.

Speaking on the hike in the U.S. visa fee, Mr. Locke insisted that it was a temporary measure which applied to only certain size of business. “It is mainly targeted at technology companies with more than half their workers on H1 visas. It is however, only temporary and will expire automatically by 2015.''

Health insurers fear misuse of portability

 The insurance regulator's fiat giving unhappy health insurance customers the option to switch insurers evoked mixed response from the companies. The Insurance Regulatory and Development Authority (IRDA) on Thursday allowed policy holders to change their existing insurer without any change in the premium outgo.

Some insurers believe that the guidelines may have some adverse impact on the sector. "Portability can be genesis to various frauds and misuses. We need to evaluate the pros and cons of the move but we are confident that in the long run, it would be the company with the better services and integrity that would stand to gain in the market dynamics," Antony Jacob, CEO of Apollo Munich Health Insurance, said. A CEO of a south-based health insurance company said that in the absence of standardisation of products in India, the switching of insurers can leading to misunderstanding.
As per the guidelines, in case of a switch, the old health insurance company will have to share the details of policy in seven days. However, industry people believe that there can be logistic issues there as all health insurance companies do not have a centralised data processing facility.  Some industry experts believe that new system will require strong underwriting and selection process by the companies as there may be some misuse by policyholders.

http://timesofindia.indiatimes.com/business/india-business/Health-insurers-fear-misuse-of-portability/articleshow/7478066.cms#ixzz1Djd0Oxpm

Max India expects to turn profit on consol basis in FY11

NEW DELHI: Insurer and hospital operator Max India Ltd expects to be in the black in 2010/11 on a consolidated basis as its life insurance business turns around, a top executive said on Friday. A combination of change in product mix, volume and cost rationalisation had made the life insurance business profitable in Oct-Dec, Mohit Talwar, Director-Corporate Development, told Reuters by telephone.

He said Jan-March performance should be good enough to wipe out the company's losses during nine-month period ending Dec 2010.

Max India, which gets about 85 per cent of its revenue from life insurance business, has a 74:26 joint venture with New York Life International.

IRDA releases norms for merger of general insurance cos

 More than 10 years after opening up of the insurance sector, regulator Irda today proposed to allow mergers and acquisitions in the general insurance business that requires consolidation among the 24 industry players, most of which are loss-making.

To protect the interest of policyholders, they must be given right to exit from the insurer, which is on the block for acquisition, Irda said in its draft guidelines. An acquirer will need approvals from Irda, the Reserve Bank and the finance ministry, in case it has foreign direct investment.

Most of the 22 players in the private sector have foreign investment, which is capped at 26 per cent. Irda has also said that the intent of the acquirer should be clearly spelt out. The regulator has retained with itself the power to vet the valuations arrived at by the companies involved in M&As.

According to industry players, most of the private sector general insurance companies require fresh infusion of capital which may come from foreign partners, who have been constrained by the FDI cap. The Bill to raise the FDI ceiling is pending in Parliament.

The general insurance business has remained loss making for want of capital, which is constrained due cap on foreign capital infusion.

At present, the Insurance Act provides for the M&As only for life insurance companies.

The fast growing general insurance space has many entities looking for M&A opportunities. There have been reports of Reliance General Insurance looking to buy majority stake in its rival Royal Sundaram.

http://economictimes.indiatimes.com/personal-finance/insurance/insurance-news/irda-releases-norms-for-merger-of-general-insurance-cos/articleshow/7477713.cms

Men oin blue insured fo Rs.2.3 crore each for world cup.

The Indian cricket board has taken a personal accident policy worth $500,000 per player who is a part of the national team that will play in the World Cup. The BCCI has also taken another insurance policy to the tune of Rs 130 crore, which will shield it from financial losses in the event of a match being affected by bad weather.

Reena Bhatnagar, deputy general manager, Oriental Insurance Company, said, "The BCCI has bought the group personal accident policy from OIC. Each player can expect a financial benefit of up to Rs 2.3 crore under this policy."

The group insurance policy will be in force for two months between February 10 and April 9. "The policy can be invoked in case of death or total disability, permanent partial disability and temporary total disability to a player or a support staff member. The policy holders will be paid the monetary compensation for injuries that are sustained on and off the field during this 2-month period," said Leander Dias, an official from OIC.

The policy can also be invoked if a player or support staff member becomes a victim or sustains injury due a terror attack. An overseas mediclaim policy has also been bought for the team. "The board can expect reimbursement of hospitalization expenses on the treatment of players," Dias said

http://timesofindia.indiatimes.com/sports/cricket/world-cup-2011/news/Men-in-Blue-insured-for-Rs-23-crore-each-for-World-Cup/articleshow/7479334.cms

IRDA releases norms for merger of general insurance cos.

More than 10 years after opening up of the insurance sector, regulator Irda today proposed to allow mergers and acquisitions in the general insurance business that requires consolidation among the 24 industry players, most of which are loss-making. To protect the interest of policyholders, they must be given right to exit from the insurer, which is on the block for acquisition, Irda said in its draft guidelines.

"The transacting parties shall ensure that policyholders of the transferor entity are migrated in a manner which ensures that their existing policies are continued to be serviced by the transferee entity on terms and conditions no less favourable than those existing prior to the merger," Irda said. An acquirer will need approvals from Irda, the Reserve Bank and the finance ministry, in case it has foreign direct investment. Most of the 22 players in the private sector have foreign investment, which is capped at 26 per cent. Irda has also said that the intent of the acquirer should be clearly spelt out. The regulator has retained with itself the power to vet the valuations arrived at by the companies involved in M&As.

"The Authority reserves the right to appoint an independent actuarial consultant to carry out actuarial valuation of the insurance business of the proposed transacting parties, the guidelines said. According to industry players, most of the private sector general insurance companies require fresh infusion of capital which may come from foreign partners, who have been constrained by the FDI cap. The Bill to raise the FDI ceiling is pending in Parliament. The general insurance business has remained loss making for want of capital, which is constrained due cap on foreign capital infusion.

"There are as many players in the general insurance space as in other markets. This guideline will play a part as the industry matures. The industry has been there for 10 years and this would give opportunity for old players," Sanjay Datta, head of health at ICICI Lombard General Insurance said. Irda has invited comments on the draft exposure guidelines by February 22. At present, the Insurance Act provides for the M&As only for life insurance companies. The fast growing general insurance space has many entities looking for M&A opportunities. There have been reports of Reliance General Insurance looking to buy majority stake in its rival Royal Sundaram.

source: http://economictimes.indiatimes.com/personal-finance/insurance/insurance-news/irda-releases-norms-for-merger-of-general-insurance-cos/articleshow/7477713.cms

‘Irda’s new guidelines have slowed down business tremendously’

Kamalji Sahay, CEO, Star Union Dai-Ichi, speaks to DNA about how insurance will always remain a push product.

http://www.dnaindia.com/money/interview_irdas-new-guidelines-have-slowed-down-business-tremendously_1506102

Health insurance policy portability from July 1

In a big relief to dissatisfied health insurance policyholders, Insurance Regulatory and Development Authority (IRDA) on Thursday allowed them portability — shifting policies from one insurer to another on same terms — from July 1.

“The authority has examined various issues involved in the portability of the health insurance plan and has issued the necessary orders for effecting portability which will be implemented from July 1,” IRDA says in a statement. The portability facility will allow policyholders to switch over to another insurance company with the same conditions.

“The accepting insurer shall provide cover, at least up to the sum assured in the previous insurance policy,” the regulator said. The new facility will help those policy holders who stick to one insurer throughout life for fear of losing the cover for Pre Existing Diseases (PED).

http://www.hindu.com/2011/02/11/stories/2011021160362000.htm

Fidelity, First American, eye India entry

Land titles in India are nothing but ambiguous, but American land title insurers are keen on entering this market. In a step towards this, Fidelity National Financial (FNF), the US-based insurer’s India arm has already undertaken pilot projects with the governments of Chhattisgarh andDelhi.

Sameer Dhanrajani, country head- India, Fidelity National Financial India, said, “We are conducting a pilot project for Chhattisgarh chief minister Raman Singh’s local constituency Rajnandgaon. We have finished mapping the land. In New Delhi we started the pilot four months ago in East Delhi, which has a population of 4 million. We have completed the mapping of East Delhi, digitising would happen next. If we get the Title Law cleared, we would be in a position to launch in six months.”

The dubiousness of the land title market can be understood from the first phase results of the land mapping done by Fidelity National Financial India. The titles of every 1 in 12 properties in East Delhi are illegal, which is a whopping 3,33,333 titles.

According to FNF they dominate 45% market share in the US title insurance market, followed by First American Title Insurance Company at 22%.

At present, the government does not allow title insurance products to be sold in the country, but that will change with the Land Titling Bill, which is waiting in the Parliament for a nod from law makers. The Centre has already sanctioned `50,000 crore for digitising land records. The government of New Delhi, Chhattisgarh, Rajasthan, Gujarat, Madhya Pradesh and Karnataka are keen to utilise this fund and set up their digitised land record format.

Though these insurers would bring in their technology, the government does not allow any international insurance firm to hold majority stake, which is acting as a deterrent for these players. Dhanrajani said, “We would be comfortable if it is a 51:49 model, where we get the majority holding.We are also talking to private banks for a tie-up, which would help in distribution channels and getting access to work force.”

If we get the permission to operate pan India, the premium collection we expect will be around $5-8 billion in the first year itself.”

In the United States, 80% of the population opts for title insurance. Fidelity, which faces claims of 5-6% in the US expects it to be in the range of 10-15% in India

FGIW creates Guinness World Record

Future Generali India, the insurance joint venture between India's Future Group and Generali of Italy, has set a new Guinness World Record with its initiative - Future Generali Insurance Week (FGIW). FGIW was observed between January 29 - February 6 that was conducted across 103 Future Group retail outlets across the country and over 190 Future Generali branches.

FGIW marked its successful culmination by gaining entry to the Guinness Book of World Records for the longest balloon chain in the world.

This 20 km. long chain formed by balloons signed by people, who committed to getting adequately insured and thereby ensuring the security of their loved ones, through the FGIW.

Balloons collected till the end of the FGIW campaign were filled to form the longest balloon chain in the world, earning Future Generali and Big Bazaar, a place in the book of world records.

“The fact that we rank a lowly 12th In Asia is alarming, considering that we are amongst the fastest growing economies. With such a sad state of affairs, the so called young India we celebrate and talk about will probably be a middle aged/old India just 15 to 20 years down the line, with little or no Insurance,” said a company spokesperson.

All through the Future Generali Insurance Week (FGIW), customers and prospects at 103 Big Bazaar outlets & over 190 Future Generali branch offices across the country were engaged to sign a white balloon as a symbol of their pledging to ensure the protection of their loved ones with adequate Insurance.

By the end of the week, Future Generali has received over ten lakh signed balloons, displaying a tremendous response from people across age groups.

http://www.indiablooms.com/BusinessDetailsPage/businessDetails090211g.php



Magma JV for general insurance hits regulatory hurdle

Kolkata-based non banking finance company (NBFC) Magma FinCorp attempt to get a licence to enter into the general insurance sector has hit the regulatory road block.

The insurance regulator Irda after finding some problems in the financial condition of the company has written to the Reserve Bank of India(RBI) for clarifications.

"Magma FinCorp is an NBFC regulated by RBI. We have written to RBI for some clarification on the financial condition of the company. We are awaiting for their reply,'' said top official of Irda.

However, V Lakshmi Narasimhan, CFO, Magma FinCorp, told FE, "We have already applied before Irda for our proposed foray into non-life insurance in partnership with HDI of Germany. We have already got approval for the same from RBI as early as in 2009." I don't know what was going on between the RBI and Irda on the topic, added Narasimhan.

Magma had formed a joint venture (JV) with HDI Gerling International Holding AG, Germany and had prepared plans to invest Rs 250 crore in the proposed JV . Magma Fincorp Limited and its promoters had signed a joint venture agreement with HDI-Gerling International Holding AG, Germany on July 28, 2009 to enter into the general insurance sector in India. HDI-Gerling International is part of the Talanx-Group, 3rd biggest insurance Group in Germany. The Joint Venture head-quartered at Kolkata will leverage on the strengths of the two companies to offer general insurance products through the existing strong distribution and service network of Magma with deep penetration in rural India.

Insurers want separate tax deduction limit

With the Budget just round the corner, insurance companies have suggested a separate limit for deductions under Section 80C of the Income Tax Act, for long-term saving instruments like life insurance and exempt exempt exempt (EEE) treatment on the maturity proceeds of products. While insurers feel the direct tax code is going to change the way individuals invest, they want a separate limit for life insurance. Currently, the limit stands at Rs 50,000, including tuition fee and health insurance.

Experts feel it is the tenure of investments that should be incentivised and not the instrument. “It may be long-term insurance products, mutual funds or provident funds. The core competency of India is the saving habits of individuals and the government should incentivise the same in the long-term,” said P Nandagopal, managing director and CEO, IndiaFirst Life Insurance.

Last year, the government had absolved all charges, except the fund management charges, under the unit-linked insurance products from service tax.

“Life insurance and pension are the only segments of financial services that address the needs of individuals in the long-term. The government should encourage people to save for the long-term by providing a separate limit for long-term savings,” said T R Ramachandran, managing director and chief executive officer, Aviva Life Insurance. Currently, the deduction under Section 80C also includes short-term saving instruments like some mutual funds and fixed deposits.

Taxing the maturity proceeds would impact the life insurance business and the industry adversely, executives say.

The industry is also demanding a carry-forward of losses. For the last few years, industry players have been asking the government for permission to carry forward the losses to 12 years, as against 8 years at present. They say most insurers do not make profit even in the 10 year.

http://www.business-standard.com/india/news/insurers-want-separate-tax-deduction-limit/424466/

Lloyd’s to get a warm welcome

The government is planning a red carpet welcome for the world’s biggest insurer Lloyd’s to set shop in India. It is considering amending the Insurance Act to remove the legal hurdles that prevent the India foray of the London-based society of underwriters that handled gross premiums worth over £21.97 billion in 2009.

Currently, for an insurer to do business in India, it has either to be an Indian insurance company itself or a foreign company in joint venture with an Indian firm, subject to the 26% FDI cap in the sector. Lloyd’s could not use this route to enter India as it is not a company but a society of underwriters. Sources said the current provision in the Insurance Act which defines a “foreign company” as one that is not a “domestic company” would be changed to “a company or body established or incorporated under a law of any country outside India.” This would facilitate Lloyd’s entry.

Tata AIG, Max New York, Max Bupa, Bajaj Allianz are the insurance firms in India in which foreign players are involved.Sources added the government was also considering permitting overseas re-insurance companies to open branch offices in India with a minimum net worth of Rs 5,000 crore.

“Heath Insurance” would also be included in the Act and the minimum capital requirement for an exclusive health insurer would be pegged at Rs 50 crore. The proposals were discussed at a meeting between commerce and industry minister Anand Sharma and US commerce secretary Gary Locke on Monday. Locke wants the Indian government to take more steps to open its economy, particularly in dealing with trade barriers.

http://www.financialexpress.com/news/lloyds-to-get-a-warm-welcome/747770/0

Budget 2011: Health Insurance premium deduction should be increased to 25000

Industry body ASSOCHAM, said Association of Health Insurance premium deduction under section 80 D should be increased to Rs 25000 from Rs 15000. The Associated Chambers of Commerce and Industry of India (ASSOCHAM) in its pre-budget memorandum recommended that the deduction (under section 80D) in respect of medical insurance premium of an individual or his family should be raised to Rs 25,000 from Rs 15,000.

The rationale given by ASSOCHAM is "In the context of the sharply increasing medical expenses, medical insurance premiums are escalating every year. Also, there is need to increase the penetration ratio of insurance by providing encouragement through tax reliefs for opting for medical insurance."

'Insurance Week Mein Sign Karo, Mukti Paao!'

The campaign, launched with the tagline 'Insurance Week Mein Sign Karo, Mukti Paao!', asked consumers to sign the white balloon, signifying 'mukti' or peace of mind.

Future Generali, the insurance joint venture between the Future Group of India and the Generali Group of Italy, launched a unique promotional initiative - Sign Karo Mukti Paao - aimed at attracting new customers.  The insight behind the campaign was the low penetration of insurance in India. As per the data provided by Future Generali, insurance penetration in the country is only 4.6 per cent in life insurance and 0.61 per cent in non-life insurance.

With this insight, the company rolled a television-led campaign to break the procrastination barrier in insurance planning. The insight behind the whole initiative was to talk to the 'Karta' (doer) of the family about the importance of insuring himself.

The TVCs, conceptualised by Ogilvy India, feature a 'Karta' (Mr Shrivastava), who has not done his duty of taking an insurance and is not at peace even after he dies. "We wanted to do it in a way that delivers the message without losing the edge, but in a manner light-hearted enough for the consumers to accept it," says Abraham Alapatt, head, brand and corporate communications, Future Generali India Insurance.

To associate an action with the message, the company launched an on-ground activity called the Insurance Week (during January 29-February 6) to ensure accessibility to end consumers. For this initiative, the company tied up with Future Group's large format retail store, Big Bazaar, in order to standardise delivery and maximise reach. The on-ground activation was managed by Grey's activation arm, G2rams.

Future Generali India Insurance has spent about Rs 8 crore on ATL (above-the-line) promotion and Rs 1 crore on BTL (below-the-line) activities.

"Being the 19th player in a 24-player market, you clearly have to grapple with the issue of market share in a small segment in terms of penetration of the category. So, I think the battle is for the market to expand, which will make it easier for the new players to break ground. The existing customer will not necessarily go to the new players and buy new policies. So, if we have to acquire new customers, we have to create new customers," says Alapatt.

The campaign, which was launched with the tagline 'Insurance Week Mein Sign Karo, Mukti Paao!', asked consumers to sign the white balloon - signifying 'mukti' or peace of mind - and take a pledge to re-evaluate their insurance covers.

The company reached out to more than 100 Big Bazaar outlets in about 57 cities and collected more than 10 lakh signatures on balloons and pledge cards.

It plans to celebrate this period every year as the Insurance Week. "As it is, this period sees a surge in insurance. So, instead of reinventing the wheel, we want to go at a time when they are looking for it," adds Alapatt.

The January-March quarter is a very lucrative period for insurance providers, which is evident from the spends during this time. In the last quarter of the financial year, most insurance companies spend 40-70 per cent of their total ad budgets.

Courtesy-afaqs.com

http://www.afaqs.com/news/story.html?sid=29633_Future+Generali:+Offering+peace

Irda scans pension liabilities of life insurance companies

After a notional loss of Rs 1,400 crore was reported in three pension schemes of the country’s largest insurance company, Life Insurance Corporation of India (LIC), the Insurance Regulatory and Development Authority (Irda) has examined the pension liabilities of all life insurance companies. “We want to ensure that life insurance companies have provided enough resources to take care of their long-term liabilities. So, we investigated pension liabilities of all insurance companies,” said a senior Irda official. However, the regulator found that all insurers had provided enough resources for their pension products.

P Nandagopal, CEO, Reliance Life, said it was a usual inspection, as India First Life Insurance had been in the business for one year and did not have long-term liabilities.

Generally, Irda examines investments of insurance companies every year. It is a week-long procedure. A five-six member team from Irda visits companies and carries out the inspection. LIC had formed a sub-committee after the deficit was reported. The three-member panel has finalised the report and may submit it any time.

“The sub-committee will submit the report to the chairman. It will also be made available to various departments such as audit, investment, etc,” said a senior LIC executive. The losses had occurred in three guaranteed-return annuity policies — Jeevan Dhara, Jeevan Suraksha and Jeevan Akshay — launched in 1980 and 1990 with an assured return of 11-12 per cent. Irda had clarified that it was a notional loss.

Pranab pill for insurance growth

According to Finance minister Pranab Mukherjee, public-private partnerships in general insurance were necessary to promote this sector. The Union government is keen to expand crop insurance and medical insurance through such partnerships.  “Unlike other nations, we are very backward when it comes to general insurance. Only 8 to 10 per cent people reap the benefits of general insurance. We have very good presence in the life insurance sector and we want to replicate it in general insurance as well.”

“General insurance can benefit not only farm workers, but also small and medium business owners,” he said. Only 8 to 10 per cent of the 16 to 18 per cent people insured in the country buy general insurance and it is much lower compared to other countries.

Mukherjee was speaking at the launch of an insurance agent training facility of Universal Sompo General Life Insurance at his home constituency. N. Singh, chairman and managing director of Universal Sompo, said, “Our objective is to create awareness about the benefits of insurance and agents from our training centres would be capable of doing that.”

Singh was also upbeat that Universal Sompo would be able to generate Rs 300 crore in revenues at the end of this fiscal and may even launch 75 general insurance products at the end of the same. Even as 53 per cent of Universal Sompo’s business comes from the automobile market and 12 per cent from the health market, Singh said they were planning to focus on the heath sector to increase the business to 25 per cent.

Universal Sompo is a joint venture between Allahabad Bank, Indian Overseas Bank, Dabur Investment and Sompo Insurance (Japan). It is the first public-private joint venture in general insurance and started its operations in November 2008.

Pragyaan Quiz I Finals Results

Hi Friends,

Congratulations to the Winners of PRAGYAAN Quiz(Finals) round . Names of the top three teams are as follows:

           Winners : Team - Ecstacy
                            Team Members - Vidit Shah & Yogesh Vij

 1st Runner up : Team - Baba Ka Bulawa
                            Team Members - Nitin Kumar & Siddarth Satpathy

2nd Runner up : Team - Quizzaholic
                            Team Members - Aayush Mangalum & Sanjay