Life Insurers cautioned against misleading public

IRDA has asked life insurers to desist from promising high returns and guaranteed benefits at the end of specific periods for the unit linked insurance plans. IRDA has also advised public not to get carried away by such unapproved presentations. According to guidelines of Life Insurance Council insurers are required to project their rate of returns between 6% and 10% only. They are also required to state that the returns are not guaranteed. This caution advise is necessitated because IRDA has come to know of the literature distributed by development officers promising returns as high as 3.38 crore rupees at the end of 20 years for an investment of Rs.100000/- over a period of 3 years.

Reference AMLP program guidelines

As it was reported by life insurance companies that collection of photographs for all new life insurance contracts was found very difficult in addition to adding to costs especially for low value products, the IRDA have decided to provide exemption in this regard as under. All the life insurance policies held by a single individual with a total annual premium of Rs.10000/- are exempted from the requirement of recent photograph and proof of residence.

MetLife announces two new ULIPS

MetLife India Insurance Company Private Ltd has brought up two unit linked insurance plans Met Smart Plus and Met Smart Premier single pay. The products can be purchased by a one-time payment. The minimum single premium is Rs.50000. Individuals upto 55 years can buy the policies. The minimum sum assured is 1.25 times the premium while the maximum sum assured is five times the premium.

Easing of investment avenues for insurers

Fresh guidelines from IRDA are on the anvil, which may ease the norms for investments by insurers. The move, which may permit flexibility for insurers when investing in corporate bonds and mortgage-based securities would allow them to enjoy higher yields. They would be permitted to invest in all corporate insurances with AA+ and above ratings. Further mortgaged securities would be categorized as approved investments. In addition detailed guidelines are also expected to be announced for investing in equity and debt derivatives.

Bajaj Allianz ties up with LVB for banc assurance.

CEO of Bajaj Allianz General Insurance Company Ltd., Mr.Ramesh Goyal and CEO of Lakshmi Vilas Bank Ltd., have signed the memorandum of understanding for the banc assurance partnership. This arrangement makes the LVB, as the twenty first partner of Bajaj Allianz. After signing they said that the partnership would be mutually beneficial. On the occasion Mr.Goyal said that the company had earned gross premium of Rs.1474.27 crores upto January end during the year, which is 38% more than last year. In 2005-06 the company had earned a net profit after tax of Rs.51.6 crores on a gross premium of Rs.1284.6 crores.

Insurance as savings

By clubbing Sec80C for life cover and Sec 80D for health cover it is possible to save upto Rs.37000 as against Rs.33000 earlier for a person with an income Rs.1000000/ Insurance companies are therefore offering many combined products this year

Kotak life to enhance its capital by 150 crore rupees.

Targeting a cent percent growth during the current fiscal Kotak Life Insurance infuses Rs.150 crores more to its capital. ED of the JV, Mr.Pankaj Desai told that the firm is looking at total premium collection of about Rs.1000/-crore for the year ending this month. This includes a first year premium of Rs.600 crores. Mr.Desai told that they are targeting a first year premium of Rs.1200 crores in the next financial year. Its branch network in India would go up to 83 in 56 locations by March end, he said.

BOB finalizes its JV partner.

Bank of Baroda has finalized its life insurance partner. It is understood that they have short listed German Insurer ERGO and UK insurer Legal and General. The long delay for their foray was due to the bank.aspxiring to hold 74% stake in the subsidiary, whereas they are permitted to hold only less than 50%. They have sought special permission quoting the case of SBI where SBI holds 74% in its JV with Cardiff of France.

ERGO Insurance group is a leading European Insurer with total premium of euro 16.7 billion and is the second in German primary insurance market. They have presence in India through health insurance partnership with Apollo.

Legal and General is a top 50 FTSE British companies. It has over 5 million customers employing 8000 staff. It has an investment of 211 billion pounds on behalf of investors.

RELIANCE Life gets ISO certification

Reliance Life Insurance Company has been accorded ISO 9001-2000 certificate for its best in class management system in quality, customer & process orientation. This is the second life insurance company in India to get the certificate covering all functional areas. The certificate issued by Bureau Verities for a period up to 2010 subject to periodical verification covers the whole gamut of business processes. Mr. Nandagopal, CEO Reliance Life said that the certification ‘is a significant milestone in our quest to offer innovative products, outstanding services and improved customer satisfaction and that their processes and performance measures are in line with best in the industry’.

HSBC Insurance

HSBC Insurance Asia a wholly owned subsidiary of HSBC has associated with Canara Bank and Oriental Bank Of COMMERCE to float their insurance schemes in India. They plan to sell their insurance products only through banks without engaging agents. It is also planned to form a joint venture with Canara Bank holding majority share of 51% and Oriental Bank holding 23% with the remaining 26% held by HSBC Insurance. Mr. Harpal Karlcut, CEO of the proposed JV said ‘ the idea is to house product creation in the new venture, which in turn will have distributor agreements with the three banks. That way, products can be sold thro’ the combined network of around 3600 branches and a total customer base of over 40 million’. This model has worked for HSBC worldwide and it believes that it will work in India also. However in India whether this model of cross selling will work is yet to be seen. Mr. Karl believes that this model will work because the distributors also have a stake in the business venture and are not mere sellers. Mr.M.B.N. Rao Chairman of Canara bank says that they will appoint special cadre of executives to sell insurance products.

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